FCC Adopts Sirius XM Leased Channel Rules

4/17 Deadline

The FCC has adopted implementation details for SIRIUS XM RADIO's leasing of part of its channel capacity to "Qualified Entities."  The new, long-delayed guidelines include the ability of SIRIUS XM to select the lessees and sets an implementation deadline of APRIL 17th.  

Lessees will be restricted to four channels each, with SIRIUS and XM considered as separate entities (a simulcast channel heard on both services would count as two channels).  4% of each of the platforms, SIRIUS and XM, will be set aside for lease with a minimum of six on each.  All leased channels will be available at no charge to SIRIUS and XM subscribers, and will be included in SIRIUS XM programming guides.  Leases will be for a minimum of five years.

The Commission previously defined "Qualified Entity" as "any entity that is majority-owned by persons who are African American, not of Hispanic origin; Asian or Pacific Islanders; American Indians or Alaskan Natives; or Hispanics."  The newly-revised race-neutral definition requires a lessee "(1) not be directly or indirectly owned, in whole or in part, by SIRIUS XM or any affiliate of Sirius XM; (2) not share any common officers, directors, or employees with SIRIUS XM or any affiliate of SIRIUS XM; and (3) not have any existing relationships with SIRIUS XM for the supply of programming during the two years prior to the adoption date of this Order."

The Commission wrote, "(W)e instruct SIRIUS XM to evaluate the pool of Qualified Entities and select as lessees those Qualified Entities that it believes, in good faith, will promote source, viewpoint, and programming diversity.    In evaluating the potential diversity contribution of prospective lessees, we intend that SIRIUS XM consider whether a potential lessee is a new entrant to the mass media industry. We would, for example, consider a source that already has access to a sizable base of listeners or viewers through other media outlets, such as broadcast stations, to promote source diversity less than one with more limited reach."  No specific procedures were prescribed, however, other than the requirement that the Media Bureau be notified of selections before agreements are signed, with the Bureau getting 45 days to respond.

Chairman JULIUS GENACHOWSKI said, "The Commission takes action today to foster the availability of diverse programming to satellite radio subscribers and to promote access to the satellite radio platform for independent programmers and new entrants, including small businesses, women, and minorities. This Order ensures that SIRIUS XM will reserve channels for programmers truly independent of SIRIUS XM, who will be new voices on the satellite radio platform, providing original programming of a type not already available, or service to historically underserved audiences. The Order paves the way for the prompt introduction of these new services, affording smaller, independent programmers a meaningful opportunity to obtain satellite radio distribution."

Commissioner MICHAEL J. COPPS added, "Hopefully the balance struck today can open the door to more diverse voices emanating from the merged entity. The conditions in this Order are fairly rigorous and also appear more likely to withstand legal scrutiny. Certainly a merger of this size and scope requires incentive for the new company to offer an array of program channels that otherwise might not make it to the air in a consolidated market. We have arguably accomplished this here. Hopefully this will pave the road for the delivery of more diverse content to underserved audiences."

Commissioner MIGNON CLYBURN said, "Yes, it has taken a while to finalize the terms of this condition. And No, it is not perfect in my opinion. However, the Order strikes an intelligent and well-crafted balance that defines entities that can qualify for the set aside and establishes procedures and criteria for their selection. The Order wisely involves SIRIUS XM in the process, instructs them on the factors to consider, and permits them to use customary terms in their contracts with the selected entities. I am also pleased that the Commission will play an ongoing role in reviewing SIRIUS XM's implementation of the leasing condition. I look forward to working closely with my colleagues on the Commission and with the Media Bureau as we monitor SIRIUS XM's steps to bring this condition to life."

Commission Denies Mt. Wilson Appeal, Rules Sirius XM Not Subject To Indecency Rules

The Commission also denied MOUNT WILSON FM BROADCASTERS, INC.'s objection to the SIRIUS-XM merger on the basis that the merged entities should have been subjected to indecency regulation.  MOUNT WILSON, headed by SAUL LEVINE, contended that SIRIUS XM's use of terrestrial frequencies meant that it could not be considered a "subscription service" exempt from the indecency law.  The Commission concluded that its prior resolution of the issues raised by MOUNT WILSON were sound and denied the Petition for Reconsideration.

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