Communications Daily, 11/19/10

Too Broad
FCC Missed on Sirius XM Order, MMTC Says
The FCC should revise its order on the Sirius XM channel set-aside to more directly promote
the intended diversity of the 2008 order approving the deal, the Minority and Media
Telecommunications Council said in a petition for reconsideration filed Thursday night. The
group has said the recent implementation order undermines FCC Diversity Committee efforts
to come up with a definition that promotes diversity without relying on race classifications.

The diversity committee released its report soon after the latest order came out. MMTC
President David Honig was on that committee. Concerned with constitutional issues, the
commission revised the original condition on XM's purchase by Sirius that had required a set-
aside for minority-owned companies.

It's unclear if the FCC will take up the issue again, which was already long-delayed (CD Oct
20 p6). "It's hard to predict the way FCC will rule," Honig said in an interview. FCC officials
said they hadn't fully reviewed the petition yet. Honig said the agency has hurt the intent of
the condition by widening the scope too much. The order lets Sirius contract with
programmers that don't have an existing "relationship" with the company. Without further
clarification, that could include conglomerates outside the radio business, such as Google,
said Honig: It's "so broad that it's very hard to identify many companies that do not qualify."

The relief the MMTC is asking for is "as narrow as possible," he said. While "nothing in
telecom law is a no-brainer," adjusting the order to use the diversity committee's suggestion
"is low-hanging fruit," he said. The regulator should adopt the diversity committee's
suggestion, which would use three "race-neutral" classifications.

The qualified entity definition should include historically black colleges and universities, and
Hispanic, Asian American and Native American institutions, which are based on mission
rather than race, MMTC said. It said the definition should also include multilingual
programmers, which are classified by language rather than race, and tribal entities, which are
based on "treaty relationships." Honig said his other main concern is that the commission will
use the order as precedent for further mergers, he said. The FCC's assurance that every deal is
different isn't concrete enough to avoid the precedent, Honig said. Companies looking to buy
others will look to this deal in developing business plans, he said.

While the FCC may have misplayed the race issue by broadening the requirement, the agency
got several things right, he said. Honig said he supports the FCC's Adarand analysis and that
was obvious that the original order was flawed and an adjustment was necessary. The
increased role of Sirius in the choosing process of the programmers was "entirely rational,"
he said. The Supreme Court in Adarand ruled that the federal government can't use racial
classifications in making decisions without a compelling government interest. — Tim
Warren