Remarks of Chairman Kevin Martin of the U.S. Federal Communications Commission at the Plenary Session of the OECD Ministerial Meeting on the Future of the Internet Economy
Seoul, Korea
June 17, 2008

Excellencies, distinguished delegates, ladies and gentlemen – it is a privilege for me to address this Plenary Session of the OECD Ministerial Meeting on the Future of the Internet Economy. I am truly honored to speak to the many Communication Ministers who have gathered here today.

I would like especially to thank the Republic of Korea and, in particular, Chairman Choi of the Korean Communications Commission for hosting this exciting event in the city of Seoul. This Ministerial Meeting provides an important forum to discuss policies to foster an enabling environment for the Internet Economy. The Internet has become an increasingly critical driver of both economic growth and social development.

Over the past decade, the Internet has had a powerful impact on the economy and the lives of American citizens. We have witnessed the fruits of increased innovation, entrepreneurship, and competition that this technology has helped deliver.

The testimony of Harold P. Schroer regarding cell phone early termination fees before the Federal Communications Commission's hearing on the matter.
June 12, 2008
FCC DOCKET NO. 05-194

Good morning ladies and gentlemen, my name is Harold P. Schroer. I live in Southampton, New York. I’m retired and a veteran of World War II.

I am here in my capacity as representative claimant in a certified class arbitration vs. Verizon Wireless challenging the legality of their early termination fees. I represent a class of Verizon Wireless Customers in 49 states, who paid or were charged an ETF, or who had an ETF in their subscriber agreement. The class I represent paid roughly $500 million out-of-pocket to Verizon Wireless, and we are seeking a refund of every penny of that money.

In May, 2003 I had been a Verizon Wireless customer for about two and a half years. During this period, at the suggestion of the Verizon representative, I changed my plan several times. When I reviewed the monthly bill from my last plan I found that it not only cost me more, but it provided me with services I did not need or want.

In accordance with Section 1.1206 of the Commission’s rules, 47 C.F.R. § 1.1206, and the Commission’s Public Notice dated March 29, 2007 (DA 07-1435), this letter notifies the Commission that on June 13, 2008, Richard E. Wiley and Gregg Elias of Wiley Rein LLP, counsel for Sirius Satellite Radio Inc. (“Sirius”), Gary Epstein of Latham & Watkins LLP, counsel for XM Satellite Radio Holdings Inc. (“XM”), and Justin Lilley, President of Telemedia Policy Corp. and consultant to XM, met with Catherine Bohigian. In addition to discussing matters already addressed in the above-referenced merger docket, Sirius and XM left a copy of the attached written ex parte presentation addressing voluntary commitments with Ms. Bohigian.

June 13, 2008

The Honorable Kevin J. Martin Chairman Federal Communications Commission 445 12th Street, SW Washington, D.C. 20554

Re: Consolidated Application for Authority to Transfer Control of XM Radio Inc. and Sirius Satellite Radio Inc., MB Docket No. 07-57

Dear Chairman Martin:

The record in the above-referenced proceeding provides clear evidence that the merger of Sirius Satellite Radio Inc. (“Sirius”) and XM Satellite Radio Holdings Inc. (“XM”) will benefit consumers and should therefore be approved promptly and without conditions. Sirius and XM have demonstrated that consumers will benefit substantially and the public interest will be served by approval of this transaction. The Commission should not impose conditions in this proceeding that will have the effect of reducing these public interest benefits.

Nevertheless, this letter is to inform you that, if the merger is approved, the combined company will implement the voluntary commitments listed below. These commitments are being made to further demonstrate that the merger is in the public interest and in the interest of facilitating the speediest possible approval of the merger by the Commission.

Programming.

1. A La Carte Programming: The combined company will offer the following a la carte programming options:

50 Channels will be available for $6.99 a month and will allow consumers to choose either 50 Sirius channels from approximately 100 Sirius channels or 50 XM channels from approximately 100 XM channels. Additional channels can be added for 25 cents each, with premium programming priced at additional cost. However, in no event will a customer subscribing to this a la carte option pay more than $12.95 per month for this programming.

100 Channels will be available on an a la carte basis for $14.99 a month. This a la carte option will allow Sirius customers to choose from the Sirius programming line-up and some of the best of XM’s programming, and XM customers to choose from the XM programming line-up and some of the best of Sirius’ programming.

Within three months of the consummation of the pending merger, the first a la carte-capable radios will be introduced in the retail after-market and the combined company will commence offering a la carte programming.

“Best of Both” Programming: Within three months of the consummation of the pending merger, the combined company will offer customers the ability to receive the best of both Sirius and XM programming. Current XM customers will continue to receive their existing XM service, and be able to obtain select Sirius programming. Likewise, current Sirius customers will continue to receive their existing Sirius service, and be able to obtain select XM programming. This “best of” programming will be the same “best of” programming included as part of the 100 Channel A La Carte offering, and will be available at a monthly cost of $16.99.

Mostly Music or News, Sports and Talk Programming: Within three months of the consummation of the pending merger, customers will have the option of choosing an option of “mostly music” programming. Subscribers will also be able to choose an option of news, sports and talk programming. Each of these programming options will be available on existing satellite radios at a cost of $9.99 per month.

Discounted Family-Friendly Programming: Within three months of the consummation of the pending merger, consumers will be able to purchase a “family-friendly” version of existing Sirius or XM programming at a cost of $11.95 a month, representing a credit of $1.00 per month. Current Sirius customers will also be able to choose a family-friendly version of Sirius programming that includes select XM programming, and current XM customers can choose a family-friendly XM programming option that includes select Sirius programming. This programming will cost $14.99 per month, representing a credit of $2.00 per month from the cost of the “best of” programming.

These programming options were previously described in the companies’ July 24, 2007 joint filing and are subject to individual channel changes in the ordinary course of business and, in the case of certain programming, the consent of third-party programming providers.

Public Interest and Qualified Entity Channels. The combined company will set aside four percent of the full-time audio channels on the Sirius platform and on the XM platform, respectively, which currently represents six channels on the Sirius platform and six channels on the XM platform, for noncommercial, educational and informational programming within the meaning of 47 C.F.R § 25.701(f)(2) of the DBS set aside rules.

Looks like the Federal Communications Commission needs to fill in some spaces it left blank in a recent decision on its minority media ownership rules. Two organizations filed Petitions for Reconsideration earlier this week asking for some pretty basic clarifications. These would include telling broadcast media brokers exactly how to certify that they haven't been discriminating against minorities. And if the FCC wants to give breaks to minority firms seeking to buy radio and television stations, another group asks, why does it define the "eligible entities" that qualify for this help as small businesses (rather than, say, "minority firms")?

We're here to help?

In early March the FCC issued a lengthy Order designed to help woman- and minority-owned businesses buy more broadcast media. It was a hodgepodge of new and revised rules and initiatives. They included making it easier for minority firms to buy a "distress sale" license—a frequency whose owner has to face an FCC revocation hearing, encouraging banks to participate in Small Business Administration (SBA) guaranteed loan programs to help minority companies buy media, and smoothing the path for big companies to sell off to a minority firm pieces of a "grandfathered" cluster of stations—a combination of licenses bought prior to an FCC broadcast ownership rules change.

Six public interest groups have sent amici curae briefs to the United States Supreme Court with one message: Whatever you decide about the Federal Communications Commission's new "fleeting expletive" indecency policy, don't reverse the court's Red Lion decision—a crucial component of FCC public interest authority.

"Of great importance . . . is that, whatever the outcome in this case, the Court continues to recognize the constitutional legitimacy of the FCC’s statutory public interest oversight of television broadcasters," the groups wrote on June 9th, "especially as they apply to promoting mentally healthy children and families." The filers include the American Academy of Pediatrics, the Benton Foundation, Children Now, the National Institute on Media and the Family, the Parent Teacher Association, and the United Church of Christ,

The Supreme Court has agreed to review a circuit court decision striking down the FCC's new policy against dirty words said on the fly—such as Cher's flippant use of the word "fuck" in the 2002 Billboard Music Awards, televised by Fox. The Second Circuit Court of Appeals ruled that the Commission had not adequately explained why it now wants to punish stations for such broadcasts, when in the past it showed leniency towards these slip ups. The high court will hear Fox vs. FCC in the fall.

If the Federal Communications Commission wants to prevail in its crusade to get United States Supreme Court approval of its new "fleeting expletive" policy, it is going to have to convince the High Court of two things. First, the FCC must prove that the broadcasting of dirty words said on the fly somehow actually hurts people, especially children. Second, the agency must demonstrate that it had the legal right to radically alter its policy towards these naughty phrases, which up until the recent past has been relatively benign.The Commission must show that The Law has always granted the agency permission to prosecute abbreviated dirty talk, whether the FCC has historically availed itself of this tacit approval.

Solicitor General Paul Clement's brief to the Supreme Court on behalf of the FCC, submitted on Monday, accomplishes the second task adequately, I think, and the first task not at all. I doubt his arguments will convince many Ars readers. But don't forget: all the DoJ and FCC have to persuade are the Supremes. The Supreme Court will consider the FCC's appeal of a circuit court decision to strike down its recent fleeting expletive rulings this fall. Here's a recap of how we got to this place:

Congratulations to the Journal Broadcasting Group, the latest media company to hop across the Federal Communications Commission's not very deep limits on television duopolies. Journal has won the right to own two TV stations in the Tucson, Arizona market, and to allow one to pretty much operate the other. What's the reason for this particular waiver? The FCC has classified one of the licenses as a "failing station"—that is, a signal that has floundered for "an extended period of time both in terms of its audience share and financial performance." Whoever said that failure isn't an option was wrong, yet again.

The underperforming station in question is Tucson's KWBA, affiliated with the Warner Brothers CW Network. It will now be owned by Journal and more or less overseen by its Tucson sister, ABC affiliate KGUN, also a Journal license.