• by Erik Sass  @eriksass1, July 24, 2008

A week after surprising Washington, D.C. with the possibility that he might support the merger of Sirius and XM Satellite Radio, Jonathan Adelstein--one of two Democrats on the Federal Communications Commission--said Wednesday he would vote against the merger since the satcasters balked at several tough conditions he wanted met.

The swing vote now belongs to Republican commissioner Deborah Taylor Tate, the last undeclared vote on the five-person commission.

In a statement explaining his "no" vote, Adelstein said his conditional support was an attempt to "forge a bipartisan solution"--seeming to imply that the satcasters' rejection of his conditions had the support of Republican members of the FCC or Congress, or both. "Instead, it appears they're going to get a monopoly with window dressing," he added.

Adelstein said last week that he would support the merger--provided that the satcasters met several demands, much more stringent than the conditions they agreed to in June.

With Adelstein's "no" vote, following fellow Democrat Michael Copps' "no" vote on Monday, the FCC is now evenly split along partisan lines. The deciding vote belongs to Tate, a Republican who voted in favor of allowing more media consolidation in the past, but has also expressed reservations about the satcaster merger.

Specifically, Tate has said she will not support the merger until they have resolved an FCC enforcement action regarding the companies' illegal use of terrestrial repeater towers that can interfere with wireless connections. If the companies resolve the action by paying a fine, Tate is widely expected to vote yes. Adelstein, by contrast, had offered his support if the XM/Sirius companies would agree to various stipulations. They included a six-year price cap, including any "pass-through programming costs that could be added to a satellite radio subscriber's bill." That would mean the companies would have to absorb the programming costs associated with, for example, recruiting a high-profile personality like Howard Stern or securing the rights to popular sporting events. Last month, the satcasters agreed to a three-year price cap.

He also demanded that the satcasters cede one-quarter of the satellite spectrum--or roughly 75 of 300 channels--to minority broadcasters and a public satellite service. The satcasters had previously agreed to lease 8% of the spectrum, or 24 channels to these alternative services.

Finally, Adelstein said that all new satellite receivers be required to include hardware that makes them compatible with HD digital radio signals from terrestrial broadcasters. The satcasters had already objected to the idea of requiring manufacturers to include HD receivers in satellite radios, with support from manufacturers like Pioneer, and automakers like GM and Toyota.

All the conditions set forth by Adelstein echoed demands made by members of Congress and lobbyists over the last year.