A top telecommunications lawyer has filed papers with the Federal Communications Commission that take the hardest line ever against the proposed merger of Sirius and XM satellite radio. Attorney Julian R. Shepard's heavily redacted statement offers "Highly Confidential Documents," he says, that "call into question the truthfulness and candor of both Sirius and XM with respect to their dealings with the Commission as licensees during this proceeding." Shepard files as counsel for the Consumer Coalition for Competition in Satellite Radio, or "C3SR" as it calls itself for short.

Not surprisingly, the filing urges the FCC to reject Sirius and XM's merger application. But C3SR goes further, suggesting that the companies have been "less than candid" before the government, and that "this conduct raises serious questions that must be investigated." In fact, the agency should consider revoking Sirius and XM's licenses, the 25-page comment concludes.

Shepard is no lone crank, firing a shot in the dark. His résumé includes a term as vice president and general counsel of the Association for Maximum Service Television, senior policy advisor at the National Telecommunications and Information Administration, and attorney for the National Association of Broadcasters (NAB).

But C3SR has its own problems. While the group wants the FCC to investigate Sirius/XM, about half the observers of this proceeding have been investigating C3SR, trying to figure out who is behind the outfit. C3SR's stubborn secrecy has sometimes detracted from its message. But first let's summarize the group's decidedly hardball stance.

The culmination of a coordinated plan...

Like many commenters hostile to the proposed merger, C3SR focuses on Sirius and XM's failure to produce an interoperable radio—that is, a receiver that consumers can use to pick up both services. The FCC originally made this interoperability a condition for XM and Sirius to obtain their Digital Audio Radio Satellite (DARS) licenses. Many filers, from Free Press and the Consumers Union to Clear Channel, have observed that granting Sirius and XM a merger now would reward their dropping the ball on that pledge. So have various members of Congress.

But C3SR goes way beyond this logic, charging that Sirius and XM's refusal to come through on interoperability should be seen as "the culmination of a coordinated plan to restrain trade in contravention of the public interest and in violation of the Commission's rules and policies and of the antitrust laws." Furthermore: "Immediate Commission action is justified in response to such conduct." And Sirius/XM "should be required to make restitution to all parties harmed by such conduct"—although the filing doesn't explain how.

Backing up these hardball statements are excerpts from redacted documents that C3SR says prove that the merger parties repeatedly made promises of progress on the interoperability condition that "lacked candor." The group accuses Sirius and XM of "failing to provide full information" to the Commission, and, after they announced plans to merge, continuing "to withhold information" on the matter. Following another redacted block quote C3SR warns that the alleged fact that Sirius and XM "chose not to reveal this information to the Commission raises a material issue of fact with regard to this merger. The Commission should investigate the apparent lack of candor."

XM and Sirius "have manifested a proclivity to violate the Commission's rules," C3SR concludes, "complying with the rules selectively only when such compliance will not jeopardize their business objectives."

Who are these people?

With the exception of Sirius and XM themselves, few parties have filed with the FCC as often as C3SR on this matter, a total of 70 times since the proceeding began. Who exactly are the members of their "consumer coalition"? Its web site does not say. A press release issued in February of 2007 says that a small group of law students founded C3SR "to counter the potentially dim prospects facing subscribers of satellite radio under a monopoly provider." It credits Chris Reale as one of the group's originators. Reale did not return Ars' phone calls or e-mail inquiries. His e-mail address identifies him as a law student at George Washington University.

The Corporate Crime Reporter interviewed Reale shortly after C3SR went public and peppered him with questions about the National Association of Broadcasters' (NAB) links to C3SR. The investigative sites' unbylined article has Reale admitting that the NAB "supports" C3SR, although how isn't explained. One of the documents offered by an economist working with C3SR again discloses this ambiguous fact. "The Consumer Coalition for Competition in Satellite Radio is a consumer group consisting of Sirius and XM subscribers," declared J. Gregory Spivak of Criterion Economics in March of 2007. "It is supported by the National Association of Broadcasters."

From this one word—"supported"—much of the blogosphere has declared the marriage official. "Busted: C3SR supported by the NAB" ran the satellite radio blog Orbitcast's March 2007 headline, as if what that means is clearer than mud. Does the NAB formally endorse or financially underwrite the group? In fact, there is little evidence to support this inference.

For sure, C3SR has also shown some "lack of candor" about its origins. The Open Secrets database identifies Chris Reale as a lobbyist with the law/PR firm that handles the groups' FCC filings: Williams Mullen, where Julian Shepard is a partner. But the resource offers no evidence that either Williams or Reale have ever lobbied for the NAB (although Williams did lobby for Napster in 2002). And the FCC's filings database indicates that Williams has never done any FCC-related ex parte work for the NAB on this or any other issue.

And why should the NAB covertly rely on C3SR in this instance? The trade association has never hid its passionate opposition to the XM/Sirius union, going so far as to set up a Web site dedicated to its crusade against the proposal, and constantly testifying before the government on the matter. In the end, C3SR seems to be what it looks like: a small group of well-connected lobbyists, lawyers, and consultants opposed to the marriage of XM and Sirius satellite radio.

A good many bloggers (including this one) have noted with appropriate snickering the spectacle of NAB opposing the XM/Sirius merger. Here is an organization that has supported every conceivable relaxation of the FCC's broadcast ownership rules, suddenly railing against media consolidation. NAB and Clear Channel may be hypocrites, but sometimes hypocrites are right, especially when they warn that a merged XM/Sirius will control more spectrum than all of AM and FM radio combined. Maybe we should drop the suspicion, irony, and snark for a moment—taking heed at where even big media fears to tread.

Further reading

C3SR's May 27th filing with the FCC