the fcc – the failing communications commission

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Common sense has never reigned supreme in the corridors of Washington, D.C. because playing protectionism politics is always more fun. And then there’s the option of making something out of nothing. The folks over at the Federal Communications Commission have proven themselves devoted practitioners of both games.

All because of a couple of radio networks and Janet Jackson’s boobie. Let’s just pause for a moment because I never thought I’d have to write that word (and I can only hope I spelled it right).

XM AND SIRIUS
On February 19, 2007 satellite radio company competitors XM and Sirius announced their intention to merge. The marketplace does not need (at this juncture anyway) two services. There is barely enough audience for one to survive.

The FCC usually takes about 180 days to review such a motion and render its decision. Today, it’s rumored that a commissioner will cast the deciding yes vote to approve the merger…maybe. It’s been over a year since their review started and it’s not done. The National Association of Broadcasters are wetting their pants in fear of the merger and lobbying like heck. Senators and Congressmen who are just now discovering the FM radio band continue to offer their opinion on why it should or should not go through.

By the way, you are paying for all this grandstanding. You sitting there reading…you personally paid for all this baloney.

I’m not naïve to the fact that there are important legal issues at stake in such a merger but that’s what the six month review time is for. The FCC is teeming with lawyers who should have been able to review the pros and cons, bring it to the commissioners, let them review and vote….in the allotted time. No matter what happens with the merger (which I think should be approved) the Federal Communications Commission failed to execute its duties in a timely, professional manner.

JANET JACKSON AND THE CASE OF THE MISBEHAVING BRA
Maybe it was a corset, a tank top or some other thing that I also don’t understand. The point is that it came off during the Super Bowl’s halftime show and was visible to one of the largest TV audiences of the year (including children) for (according to court documents) “nine-sixteenths of one second.” And as far as how close up the shot was on television, maybe 1/16 of the screen.

Now, if you are like me you probably saw the “incident” on You Tube (no I’m not giving you the link…if you need it that bad you go find it yourself) or some such thing and it seemed longer…well that’s what slo-mo instant replay on a loop can do to your memory.

Whether it was a planned mistake by the performers (asking for forgiveness instead of permission) or a performance mistake it was a mistake. I’m a pretty conservative guy on most things but to me it was much ado about nothing. It was the constant replays on the web and on news shows that made it a story and then an issue and then the FCC got involved and botched the whole thing.

Government inquires, depositions, testimony, committee meetings all to fine CBS $500,000. And a Federal Appeals Court just slapped the FCC upside the head, throwing out the fine saying the FCC didn’t follow its own rules properly so their fine was illegal.

Do you want to guess how much money was spent by you and I, our tax dollars from our earnings, on deciding on that fine and then getting it over turned? I don’t know but my low estimate is about 5x the fine amount when you work in the salaries and legal fees.

It seems the FCC is hapless and we as its bankers are helpless. I don’t like that, do you?

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2 Responses to “the fcc – the failing communications commission”

  1. It would seem that there is not enough of an audience for paid satellite radio to support two stations, especially in this economy. However, one must wonder, whether the problems are due to the lack of audience or due to another company paying a celebrity an inordinate amount of money without any proof whatsoever that the audience he had on FM radio would follow him to paid radio. Would the problem be so severe if they had paid more reasonable salaries to their on-air talent? One cannot fault Howard Stern. If a company was willing to throw that kind of money at me, I sure wouldn’t say no.

  2. Hi Arlene!

    You’re right.

    Actually I think the question should be whether accountants charged monies paid to Howard Stern at Sirius to the “salary” column, to the “investor relations” column or to the “publicity and public relations” column.

    My honest opinion is you could make a real case for any or all of the above.

    The first brilliant move Sirius made to trump XM (which I think, pre-Stern, was a bit ahead in the branding game) was to hire Mel Karmazin as CEO. He brought a hugely successful track record in terrestrial radio to the new medium. He also knew how to run a publicly held broadcast company. Mel was also itching to garner a big win to stick it in the eye of Sumner Redstone over at Viacom (CBS).

    The second move was bringing in Stern. Question the content all you want (not you personally, the general “you”) but the man is the biggest name in radio period. Rush Limbaugh is a close second but Howard, in both his mind and in reality, is the king.

    How about all those months of free publicity Howard got on his old radio show prior to the change talking about Sirius. Priceless! Gold!

    XM could never overcome that Stern punch in the nose and for them it was either merge or die. Now, XM will live in a different way but live none the less.

    Thanks so much for visiting!

    Best always,
    – Peter

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