Dead Air

Dead Air

xmlogoIn early June, Kevin Martin, the chairman of the Federal Communications Commission (FCC) signaled that he would support a merger between XM Satellite Radio and Sirius Satellite Radio, the two entities that dominate the U.S. satellite radio spectrum. However, before the merger is approved, Rep. G.K. Butterfield (D-N.C.) and some members of the Congressional Black Caucus (CBC) want to ensure that minority-owned companies aren’t shut out of satellite radio ventures.

Citing concerns about media consolidation, consumer groups and several lawmakers have openly criticized the idea of a merger between XM and Sirius. “I just have the long-held belief that competition is good for the marketplace,” says Butterfield, leader of the CBC’s working group on satellite radio. “When there is absence of competition bad things happen.” Butterfield, a member of the CBC says that he has been following the details for XM/Sirius merger plan for about a year.

In his response to a number of concerns, Martin issued an order earlier this month containing a number of conditions that both companies would have to meet in order gain approval from the FCC. The conditions would help to determine, among other things, the range of subscription plans and pricing that the new entity would be allowed to offer to the public. Although the order by the FCC chairman has not been officially circulated among the other FCC board members, reports indicate that a varying number of satellite radio channels have been set aside for minorities. The total number of channels would make up just 4% of the spectrum. African Americans would have to compete with other minority groups for a portion of that percentage.

“Four percent [of the spectrum] is completely inadequate,” Butterfield argues. “There is nothing but an opportunity to fail.” Members of the CBC have varied opinions regarding the proposed XM/Sirius merger and as a result the CBC has not taken an official stance on the matter. Ultimately, the decision appears to be in the hands of the five-member FCC board made up of three Republicans and two Democrats. “You’ve got two companies [that] will occupy more space than the AM-FM spectrum combined. It’s a substantial business transaction…I’m in a wait-and-see mode,” Butterfield says.

Last summer, Butterfield and several members of Congress–including Reps. Albert R. Wynn (D-Md.), William Lacy Clay (D-Mo.), Elijah Cumming (D-Md), Bennie Thompson (D-Miss.), and David Scott (D-Ga.)–wrote a letter to the FCC outlining their concerns over the merger. In addition to his feelings about protecting the consumer from a potential media monopoly, Butterfield has questions regarding diversity at the management levels and within the workforces of both companies.

“[I] wanted to see a condition placed on the merger that would require diversity programming and a transfer of 20% of the [satellite] space to minority-owned companies,” Butterfield adds. The transfer of that amount of satellite spectrum space “would allow African Americans to contribute to the satellite radio industry,” Butterfield says, adding that it should take on the form of a