• by Erik Sass  @eriksass1, May 8, 2008

The proposal to open the satellite radio spectrum up to new competitors, in case of a Sirius-XM merger, appears to be gathering momentum. The latest entrant is Cliff Burnstein, who laid plans to launch a satellite radio broadcasting company some 16 years ago, and now hopes to revive the project.

According to Radio & Records, which first reported the news Wednesday, Burnstein's company, Primosphere Limited Partners, and another hopeful, Digital Satellite Broadcasting Service, paid the Federal Communications Commission $140,000 for satellite radio licenses--but lost out to Sirius and XM when the licensing process became a bidding war. They simply couldn't match the roughly $80 million license fees paid by both companies.

Now that Sirius and XM are proposing to merge, however, Burnstein feels his license has a new lease on life. An FCC rule requires at least two competing entities in the satellite radio market. Burnstein's proposed service could provide that competition.

The new satellite broadcaster would not necessarily have to launch its own satellites--a very expensive undertaking. But it should be possible to piggyback satellite radio signals on communications satellites already in orbit.

Burnstein isn't the only one hoping to jump into satellite radio. An investment group, Georgetown Partners, has also asked the FCC to license a third satcaster if XM and Sirius are allowed to merge.

Although the FCC hasn't commented, there is also a measure of government support for the idea. Several weeks ago, the attorneys general of 10 states signed a letter opposing the merger, with four also arguing that if the merger is allowed to go forward, the FCC should set aside part of the satellite-accessible spectrum for a free service to be started by a new third-party company.