Wednesday, March 21, 2007

FCC Application Filed - What's Next

March 21, 2007

The FCC Application has been filed, and this sets the stage.

The hearings before congressmen and senators was all well and good, but the real meat of Sirius and XM's case was in the FCC Application.

This is where they lay out their argument for the merger.

This is where they outline the competitive landscape.

This is where they speak about regulations, precedence, and case law.

This is where the street, institutions, and investors can view the merger case for themselves and begin to get a feel for the likelihood of passage.

The statements outlined in the application set the agenda going forward.

Opposing organizations such as the NAB now have to respond to the Sirius and XM arguments head to head. A shift has happened, and the NAB and others can no longer selectively put forth arguments that suit their agenda and purpose. Any opposing organization that fails to address the points made by Sirius and XM with compelling debate will begin to lose in the eyes of the public as well as the government officials making the decisions.

In the coming weeks we will begin to see the opponents arguments take shape. If those arguments are not compelling, then the sentiment for approval will begin to increase. As this happens, there could be an impact to the PPS.

To date the NAB has not been very compelling in the debate, and in some respects they are their own worst enemy.

Now that the application has been filed, look for Sirius and XM to begin to shift some focus away from the NAB aspect of this and more towards the other competitors. I-Pods, MP3’s, cell phones and internet radio will be the next topics of discussion on the agenda.

Watch closely as Sirius and XM begin to illustrate just how competitive the landscape is. You will begin to see statistics on internet radio, music downloads, and streaming cell content. The data is all there, it merely needs to be presented in a way that can be easily digested by the street. That happens by addressing these items point by point by point, and that is exactly what we will likely see happen.

The coming months will be very interesting.

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3/21/2007 08:26:00 PM

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