Like any good adventure video game, the end boss is always the hardest. That's where the game throws everything at you but the kitchen sink, making you really earn your eventual victory.
Sirius Satellite Radio (Nasdaq: SIRI ) and XM Satellite Radio (Nasdaq: XMSR ) seem to have reached this climactic stage, as they hope to gain the Federal Communications Commission's approval for their megamerger. The crowd opposing the deal may have thinned, but foes are still frantically tossing any obstacle they can in the satellite radio duo's way.
I already went over a few of the hoops that presented themselves last week. This week finds a Congressman requesting that the interoperable receivers also include the ability to stream terrestrial radio and the resurfacing of network interference concerns with the company's repeaters.
Rep. Edward Markey has been a critic of the deal for some time, but he took the time to write the FCC on Tuesday, suggesting that XM and Sirius should make more concessions to get the deal done. Instead of freezing rates for three years, he would like six. Sirius and XM have been willing to set aside a dozen channels for public service and minority broadcasts, but Markey would like even more. Oh, and he also wants chips supporting Ibiquity's HD Radio platform, to allow the receivers to also function as conventional terrestrial radios with narrowcasting playback.
It's an extreme request, of course. It also undercuts the monopolistic concerns the FCC cited in dragging its feet. If terrestrial radio wants new chips installed in satellite receivers -- and it remains to be seen who will pay for the chips -- it's an admission that satellite and terrestrial radio all compete for the same ears. This either renders the monopoly argument moot, or pushes the argument that terrestrial radios should be required to double as satellite receivers as well.
Earmarking even more stations for non-premium content also seems to make the deal less consumer-friendly. XM and Sirius don't have infinite swaths of spectrum. Adding channels means either eliminating existing programming or degrading audio quality by tightening the compression. Consumers lose either way. You won't be losing Howard Stern, Oprah Winfrey, or Martha Stewart Living Omnimedia's (NYSE: MSO ) namesake star, but you'll still never get subscribers to unanimously agree which existing stations should get the hook.
There's also an RCR Wireless article detailing the old complaint that satellite radio repeaters -- devices set up in metropolitan areas to enhance the satellite signal through heavily populated areas -- could potentially interfere with the 2.3GHZ band planned for wireless Internet functionality.
Fans of the deal should normally applaud the last-minute negativity as desperate moves against a deal that's all but done. However, next week marks the 17-month anniversary of the XM-Sirius merger's initial announcement. The delays -- and the static -- aren't funny anymore.
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