FCC Defines Satellite Radio Market As Not Including iPods
The FCC excluded other audio entertainment from a review of competition in satellite radio. But the analysis “may not reflect the appropriate markets to be considered” in a merger review, the Commission said. XM and Sirius have tried to justify their proposed merger based on competition from iPods, HD Radio and other forms of audio entertainment (CD March 21 p2). The satellite competition report was written at Congress’s request.
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The Commission voted on the satellite competition report at its March 22 meeting, (CD March 23 p9) but gave few details. Democrats complained that the report didn’t include information from the merger of Intelsat and PanAmSat. The document says data for the report was collected before the merger closed. The report doesn’t explain why it doesn’t assess the effects of the Intelsat-PanAmSat merger and SES- New Skies mergers, though they were completed the first half of 2006. Privatizing Intelsat has been good for the U.S., the FCC said, giving Intelsat the chance to develop new services for the U.S. market.
The Satellite Industry Assn. submitted a Futron study based on data through 2005 noting that revenue for satellite communications services was 60% of satellite sector revenue, up from 45% in 2000, the FCC said.
The video distribution market is offering point-to-point capacity full time or for occasional use, the FCC said. Variations in the market that affect the buyer-seller relationship include whether someone contracts for full time use or occasional use, and whether the contract is prenegotiated, the FCC said. Satellite participants include Intelsat, SES Americom, Loral and EchoStar, the Commission said. Land-based video distribution is available only where wire, coaxial or fiber is available, the FCC said: “Satellite distribution, in contrast, is potentially available to and from any point within the coverage area of a satellite.”