Sirius, XM and American values
Worried about the proposed merger between the XM and Sirius satellite radio services? So are more than 70 members of Congress, Consumers Union, the Consumer Federation of America and the American Antitrust Institute, among other groups.
On the other hand, the New York State Federation of Hispanic Chambers of Commerce thinks it’s a great idea. “We firmly believe that alternative news sources found in satellite radio have played a role in fueling this economic growth and we strongly urge the merger’s approval,” the group’s president, Alfred Placares, said in a press release earlier this month.
So do three other Latino organizationsthe Hispanic Federation, the Latino Coalition and the League of United Latin American Citizens. Also voicing support are the National Black Chamber of Commerce and the 2nd Episcopal District of the African Methodist Episcopal Church (as well as the NAACP, although its comments have yet to be posted). Ditto a trio of women’s groups: Women Involved in Farm Economics, Women Impacting Public Policy and the National Council of Women’s Organizations. From the heartland, the League of Rural Voters votes “aye” on the merger of the satellite radio giants. So do two conservative Christian groups, American Values and FamilyNet. Oh and yes, don’t forget the liberal National Consumers League and the conservative National Taxpayers Union.
Who knew there was such a variety of stakeholders among the 14 million subscribers in Sirius and XM’s combined user base?
While the names of the groups change from issue to issue, the routine in Washington has been pretty much the same for decades. Whenever policymakers are poised to act on an important and controversial issue, such as a big merger or new regulation, out of the woodwork come a swarm of advocacy groups representing a rainbow array of ethnic groups, regional interests and other constituencies.
Some of them weigh in on their own accord. For example, Consumers Union and Consumer Federation routinely take positions on mergers involving telecommunications services (and, typically, oppose them). But other groups step up to the microphone at the behest of parties most affected by the government’s action. It’s become part of the game: If you want the Federal Communications Commission (FCC) to bless your merger, as XM and Sirius do, you line up as many grass-roots allies as you can. Your opponents do too.
The routine makes perfect sense to former FCC Chairman Dick Wiley, a Washington lobbyist whose clients include Sirius. When he was on the commission in the 1970s, he said, the FCC routinely heard from the Rev. Jesse Jackson and other African American representatives on media issues. “The FCC is naturally going to be interested in what the NAACP thinks about this ... or the Hispanic caucus. That’s part of the whole equation,” Wiley said. And lining up support from those groups “is part of a very legitimate process that goes on to try to persuade five (FCC) commissioners whose obligation is to determine what is the broader public interest.”
Given the stakes involved, it’s not surprising that the process has been abused. Critics coined a term"AstroTurf"to describe supposedly grass-roots groups that turn out to be fronts ginned up by proponents or opponents of a merger, regulation or bill. Another tactic favored by large corporations is to buy goodwill among community groups through charitable donations, then encourage those groups to support the corporations’ agendas in Washington. There’s also the practice of pouring money into supposedly independent research groups, then trotting out studies that, amazingly enough, support their benefactors’ point of view.
It would be a mistake, though, to see advocacy groups as puppets that take positions only on command. There’s a natural symbiosis between these groups and their corporate allies. The groups’ raison d'être is to raise their constituents’ profile and make sure their concerns are heard. Thus, every controversial rulemaking or legislative battle is an opportunity to justify their existence and position themselves as representatives of a slice of the citizenry that shouldn’t be ignored.
Take, for example, Women Impacting Public Policy, a Washington-based group that represents female business owners. “We’ve carved out a niche and space in the telecom area because there is probably no set of issues that affect us more broadly” than the communications and media issues regulated by the FCC, said Barbara Kasoff, the group’s president. “That affects us in terms of our programming, being able to advertise, being able to market, being able to be part of this space.” The group occasionally gets involved on issues at the request of its corporate partners, which include AT&T and Verizon. But it jumped into the fray over the XM-Sirius merger on its own initiative. “We kind of watch what’s happening through the FCC,” Kasoff said. “We felt it’s very critical the commissioners on the FCC understand the perspective of small business owners. And to that end, we want to make sure that we are visible and we provide that perspective.”
The grass-roots groups and individual comments (more than 2,500 of which have been filed with the FCC) have largely repeated the themes advanced by XM and Sirius or their primary opponents, the National Association of Broadcasters. These include the impact on prices, programming diversity and consumer choice. They’ve also helped XM and Sirius advance an argument that the publicly traded services can’t make themselves: that the two companies are too weak to survive as independent entities.
That’s one of the points made by the Minneapolis-based League of Rural Voters, which joined the debate at the behest of XM and Sirius. It released a report last week that argued the merger was fundamentally different from the proposed merger of satellite TV providers DirecTV and EchoStar, which the FCC unanimously rejected in 2002. Niel Ritchie, the league’s executive director, admitted that “the XM guys did this particular study,” but he said he agreed with its conclusions and was happy to put it out under the league’s banner. Satellite radio is valuable to rural areas because they’re frequently underserved by over-the-air broadcasters, Ritchie said, and the merger would be a good thing because it would turn “what we perceive to be two weak companies into a strong company.” He added that rural concerns are too often overlooked by policymakers. “For us, having an opportunity to get involved in regulatory issues that have an impact on our constituency ... is one we take every chance we get.”
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