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Sirius XM said it would carve out stations for minorities when it merged but 2 years later has failed to do so

As a condition of Sirius satellite radio and XM Satellite radio merger on July 25, 2008, the companies “voluntarily” agreed to spin off 4 % of their channel capacity which back then amounted to 8 Sirius Channels and 8 XM channels to a so-called “qualified entity” or entities.  The companies decided that only African American, Hispanic American, Asian American or Native American run entities would qualify and the purpose of the spin off was to  perpetuate the interest of  diversity among owners of broadcast companies and networks.

Not only has the combined entity not been able to lease not even one station to a “qualified entity”, it has been granted a series of extensions by the FCC to enter into long term leases or some other arrangement.  I think there has been four such extensions granted to date with the latest being issued August 19, 2010  giving the company until November 19, 2010 to meet the merger condition.  At this point, I am not sure SiriusXM even takes the FCC seriously given the agency has been so lenient and willing to let it continue in existence without meeting its merger obligations.

I am at a loss for words as to whether it has even made attempts to do so.  I represented a couple of clients that wanted to take a stab at the job.  Specifically, American Independent Radio  (AIR) would have been a collaboration between a satellite company I represent, AlphaStar, and Malik Shakur, an LA entertainment attorney.  I even attempted to set up meetings with Sirius and XM to start the process but it got no where.

Certainly, it appears as if SiriusXM is looking to punt it back to the FCC to implement this particular condition because it  is reluctant to do so itself and I am not sure why.   However,  the reason the FCC did not take the responsibility in the first place, besides it not necessarily having the expertise to decide who would best program Sirius XM stations, is that without having studies to justify using a race-based classification, the FCC cannot take back the job with the definition of  “qualified” being a person of color.  A Supreme Court decision in the Adarand Construction v. Pena case  held that racial classifications imposed by the federal government must be analyzed under  a standard of “strict scrutiny,” the most stringent level of review which requires that racial classifications be narrowly tailored to further compelling governmental interests.

That being said, I hear rumblings of a move by the FCC to indeed take back the responsibility of implementing the merger condition, not that it doesn’t already have enough on its hands, and maybe changing the definition to be something broader like anyone who has never owned a broadcast station before.

Boy does that open up the field to…I don’t know…the UNIVERSE!!!  If the definition is changed so broadly, what good would it have been to institute a condition to ensure diverse ownership in the first place?   There would be nothing stopping the company, the FCC or a third party from assigning these stations to a non-minority and continue status quo as is.  In the terrestrial radio world, minorities own a tiny fraction of broadcast stations, just over 3 percent of all stations.

For sure, there are other classifications that are less broad that would not implicate or trigger Adarand that would more likely ensure that the pool is ao limited so that minorities have a fair shake to compete.

While it is true that the Internet has opened the door for more minorities to be able to create and produce radio content, me included with my Right of Black show,  the reach and power of Internet radio cannot surpass terrestrial and satellite radio at all.

With November 19, 2010 just around the corner, I am hopeful and optimistic that the FCC will not do anything to compromise and jeopardize the integrity of the basis for its original decision and the original merger condition.

As a disclaimer, I mentioned that I  once represented a collaboration of two companies, AIR,  that was looking to manage the stations.  I no longer represent the endeavor but I see that half of the original entity, Malik Shakur, is still making a run at it.

Good luck, there, feller.

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