Rehr to FCC: Satcaster Deception Must be Addressed as Part of Merger Review

WASHINGTON, DC -- NAB President and CEO David K. Rehr sent a letter yesterday to FCC General Counsel Matthew Berry urging the Commission to address XM and Sirius’s “lack of candor” as part of the agency’s review of the merger.

Citing reports that FCC’s General Counsel’s office believes that the merger parties’ lack of candor can be addressed separately without further investigation and without transparency, Rehr told Berry, “This position could not be more inaccurate.”

“The simple fact that the applicant is willing to deceive the Commission raises qualification concerns,” Rehr wrote. “Under the Communications Act, the Commission must address as part of the merger proceeding the allegations in the record regarding lack of candor. If it determines that the allegations raise substantial and material questions of fact, it is required by law to designate the applications for a hearing. Either way, the candor issue may not legally be deferred to a subsequent enforcement proceeding.”

Last month, Senator Sam Brownback (R-KS) sent a letter to the Senate Judiciary Committee related to XM and Sirius’s failed promise to the FCC to develop an interoperable radio receiver.

Additionally, Sirius has admitted requesting manufacturers to produce Sirius radios that operate beyond the interference regulations set by the FCC. In Sirius’s annual report (Form 10-K) filed with the Securities and Exchange Commission last year, the company disclosed on page 26 that “certain SIRIUS personnel requested manufacturers to produce SIRIUS radios that were not consistent with the FCC’s rules.” In April 2007, Bloomberg reported that at least one-third of the 800 antennas used by XM were “placed in unapproved locations or emitted signals that were too strong.”

A 2006 study of 17 wireless devices commonly used to transmit audio signals from satellite radio devices and MP3 players to in-dash car radios showed that 13 of the 17 devices exceeded field strength limits set by the FCC. Six of the noncompliant devices exceeded strength limits by 2,000 percent, and one surpassed strength limits by 20,000 percent. The Associated Press reported in 2006 that such interference resulted in some Christian radio listeners being inundated by Howard Stern programming.