Thursday, January 17, 2013
The FCC has issued an order, dated January 3, 2013, allowing Liberty Media to obtain control of Sirius XM. Here's an excerpt of the agency's ruling.
Pursuant to Section 310(d) of the Communications Act, n29 we must determine whether the applicants have demonstrated that the proposed transfer of control will serve the public interest, convenience, and necessity. In making this determination, we first assess whether the proposed transaction complies with the specific provisions of the Communications Act, other applicable statutes, and the Commission's rules. If the proposed transaction would not violate a statute or rule, we next consider whether it could result in public interest harms by substantially frustrating or impairing the objectives or implementation of the Communications Act or related statutes. We then employ a balancing test weighing any potential public interest harms of the proposed transaction against any potential public interest benefits. The Applicants bear the burden of proving, by a preponderance of the evidence, that the proposed transaction, on balance, will serve the public interest. Our public interest evaluation necessarily encompasses the "broad aims of the Communications Act," which include, among other things, a deeply rooted preference for preserving and enhancing competition in relevant markets, accelerating private sector deployment of advanced services, ensuring a diversity of license holdings, and generally managing spectrum in the public interest. Our public interest analysis may also entail assessing whether the merger will affect the quality of communications services or will result in the provision of new or additional services to consumers. Our competitive analysis, which forms an important part of the public interest evaluation, is informed by, but not limited to, traditional antitrust principles. The Commission considers whether a transaction will enhance, rather than merely preserve, existing competition, and examines potential and future competition and its impact on the relevant market.
Liberty Media does not currently provide any media distribution services that directly compete with the satellite radio services offered by Sirius, and thus the proposed transfer of de jure control to Liberty Media does not present any horizontal competition issues. To the extent that Liberty Media provides programming to terrestrial radio, for example, coverage of the Atlanta Braves baseball team, Liberty Media is unlikely to disadvantage terrestrial radio programmers by not providing or delaying Atlanta Braves programming to them given the order of magnitude of programming fees and franchise value at risk that would far outweigh profits that would flow to Liberty Media from increased Sirius subscriptions. Thus, we find that no substantial vertical concerns are raised by Liberty Media's programming interests. The Commission applies a "sliding scale approach" to evaluating public interest benefit claims. Under this approach, where potential harms appear "both substantial and likely, the Applicants' demonstration of claimed benefits also must reveal a higher degree of magnitude and likelihood than we would otherwise demand." On the other hand, where potential harms appear to be less likely or less substantial, as in this case, we will accept a lesser showing. n40 In this case, Liberty Media has not provided any evidence of specific benefits, instead relying upon the general economic benefits accruing from facilitating investment in FCC licensees and permitting investors to realize the full value of their investments. As we do not find substantial public interest harms with this proposed transaction, we find the general benefits that are likely to result from the transfer of control provide a sufficient basis to conclude that the transaction will serve the public interest.
Upon review of the Application and the record in the proceeding, we conclude that consent to the proposed transfer of control is in the public interest.