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AT&T and Sirius XM meeting of the minds helped to move broadband adoption along

If AT&T, Inc., and Sirius XM Radio Inc., had any concerns about last week’s Federal Communications Commission Order on Reconsideration, they did not show it in any filings with the U.S. Securities and Exchange Commission. The Order addressed the a revisit to remedies put in place in 2010 to address potential interference issues between Sirius XM’s terrestrial repeaters and AT&T Wireless Communications Services (WCS) base stations and customer premises equipment (CPE).

The highlight of the proceeding was an agreement between AT&T and Sirius to ground power level targets for AT&T’s WCS base and fixed stations. By implementing a self-monitoring mechanism for interference between their devices and components on their networks, both parties, as the FCC acknowledged, have made it easier to deploy mobile broadband services in the WCS spectrum while offsetting potentially harmful interference to Sirius XM’s receivers.

Investors in both companies should not see any negative impact in operations or revenues as a result of the agreement. Consumers of both companies’ services may not see any negative impact either as the agreement again works to ensure uninterrupted services. For the FCC it’s one less headache in their continued quest to identify more spectrum in order to ensure American households have access to mobile broadband services.

It looks like a rare win-win for regulators and industry.

Sirius XM: Should the FCC remove its price cap?

Posted March 1st, 2011 in FCC, Government Regulation, satellite radio and tagged , , , , by Alton Drew

Time flies when you are having fun. The Federal Communications Commission is in the middle of taking comments on whether it should extend the price caps imposed on Sirius XM’s basic subscription radio service or allow them to expire on July 28, 2011. Sirius XM voluntarily accepted the price cap regime in exchange for approval of the merger between Sirius Satellite Radio and XM Satellite Radio.

I don’t even see where the FCC has the statutory authority to regulate satellite radio rates much less impose a price cap. The FCC was concerned about allowing competition to flourish in the radio markets. Their concerns were severely misplaced.

Price caps didn’t create competition in the market for subscriber-based satellite radio service. If the FCC wanted to see competition in that specific niche, it would have allowed Sirius to raise its rates. A rate increase would have signaled potential satellite radio competitors that there was a little extra revenue to grab before all out saturation took place.

Well, in three years, Sirius is facing serious competition not only from old fashioned radio service, but from Internet-based services such as Pandora and Rhapsody. HD radio and old-fashioned iPods provide competition as well in the “I’m sick and tired of commercials” music listening market.

It’s time for the FCC to extend satellite radio some competitive market consideration and not extend price caps for Sirius XM. Let the competition that is emerging determine the true market cap for Sirius’ rates.