Network interference issues could decide XM-Sirius deal

Perhaps lost – but apparently not forgotten in the Federal Communications Commission’s extended consideration of the proposed merger of XM Satellite Radio Holdings Inc. and Sirius Radio Holdings Inc. – are long-standing allegations of illegal operation of terrestrial repeaters by both companies and the absence of clear rules to prevent interference to wireless Internet operations planned in the 2.3 GHz band.
In a deal chock full of controversy, Jessica Zufolo, a telecom analyst at Medley Global Advisors L.L.C., said the repeater issue “has emerged as a key determinant in the merger proceeding, and has become a high priority for all the commissioners, particularly those in the major who have not voted for the pending item.”
Most signs point to Commissioner Deborah Taylor Tate, one of the three Republicans in the FCC majority, as the unlikely swing vote for approval for the XM-Sirius deal. A Tate aide did not return a call for comment.
Repeater and potential inference concerns have been raised by the wireless broadband sector since at least 2001, with no apparent FCC enforcement action taken to date and no clear regulatory path to resolve the interference question.
A group of companies with wireless communications services licenses – AT&T Inc., Comcast Corp., NextWave Broadband Inc., NTELOS Inc., Sprint Nextel Corp., Horizon Wi-Com and WaveTel NC License Corp. – have been pressing the FCC to craft technical rules enabling WCS licensees and satellite radio operations to peacefully co-exist in 2.3 GHz band.
In the past, neither XM nor Sirius has acknowledged any wrongdoing. Satellite radio terrestrial repeaters have been operating for at least six years under special temporary authority, according to Wireless Communications International Inc.
The FCC in 2006, responding to wireless broadband industry complaints, extended network buildout deadline for 2.3 GHz facilities from 2007 to July 2010. Late last year, the commission decided to update the public record as part of an effort to write rules preventing satellite radio terrestrial repeaters from interfering with WiMAX services anticipated in the 2.3 GHz band.
“We believe the chairman is willing to address these issues by taking enforcement action against XM and Sirius for past violations and establish rules for repeater use going forward,” Zufolo stated. “However, as a compromise, the issues may end up getting resolved separately, but quickly, after the item is adopted.”
The FCC, which has been the target of criticism for the current state of U.S. broadband penetration and speed in comparison to other countries, could vote on the XM-Sirius transaction at a scheduled Aug. 1 public meeting.