U.S. Electronics Submits 'Open Device' Condition

U.S. Electronics Submits 'Open Device' Condition

As support for condition grows, U.S. Electronics supplies FCC with specifics

NEW YORK, May 27 /PRNewswire-USNewswire/ -- U.S. Electronics submitted a detailed proposal on Friday, outlining how the Federal Communications Commission should protect consumers' access to satellite radio networks in the event the agency approves the merger between Sirius Satellite Radio and XM Satellite Radio.

The 'open device' condition would require the newly merged company to adopt certain requirements enabling consumers to chose whichever device they prefer to connect to satellite radio networks. The condition has gained widespread and growing support from key Federal legislators, public interest groups, businesses in the industry, as well as from media editorial boards and bloggers.*

The condition proposed by U.S. Electronics is similar to one recently imposed by the Commission on a key portion of the Upper 700 MHz "C Block" spectrum, which was purchased by Verizon Wireless at auction this year for $4.75 billion. The Commission included this condition because, through 'open device' competition, consumers benefit from better service, greater innovation, lower cost and higher quality products - all of which suffer without competitive market forces.

As proposed by U.S. Electronics, this condition (available at: http://fjallfoss.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_document= 6520011050) would:

-- Allow the public free and unfettered use of any device to access the
satellite radio network, as long as the device does no harm to the
network, which would be established by independent testing labs;
-- Open up access to retail and automotive markets for competitive
designers, manufacturers and distributors of satellite radio
receivers, allowing these competitive and innovative companies access
to all necessary technical requirements, specification and chipsets to
produce new radios;
-- Maintain product quality and integrity, and compliance with necessary
'do no harm' standards through the creation of independent testing
facilities, funded by the companies seeking entrance into the market;
-- Block the merged company from adversely influencing the price of
satellite radio receivers, and from entering into non-competitive
exclusive agreements, by barring the company's direct or indirect
involvement in the design, manufacture or distribution of satellite
radio devices; and
-- Ensure compliance with FCC rules and regulations through creation of
an independent monitor.

"We believe that this condition will benefit consumers by allowing openness, competition and innovation in the design, manufacture and distribution of satellite radio hardware," said Kathy Wallman, spokesperson for U.S. Electronics. "Consumers will benefit from greater choice, lower prices and better products and service, while the satellite radio network will benefit from more paying subscribers."

'Open device' policy is firmly rooted in precedent setting decisions such as Hush-A-Phone (http://en.wikipedia.org/wiki/Hush-a-Phone_v._FCC) and Carterfone (http://en.wikipedia.org/wiki/Carterfone). These decisions found that AT&T's monopolistic practices in the 1950's, blocking consumers from using devices on the network that were not owned by the company, were not in the best interest of consumers.

By opening access to the AT&T network, the FCC allowed for great advances in telecommunications technology that have benefited consumers. In fact, according to FCC Commissioner Michael Copps, "fax machines and computer modems are direct descendants of [the 'open device'] principle."

Wallman noted that in the future, 'open device' policies could lead to consumers being able to pick up satellite radio on their iPods and other devices, leading to satellite radio companies' reaping greater numbers of subscribers to their networks.

"While beneficial to outside manufacturers and consumers, 'open device' practices also benefits the satellite radio network by making network access more attractive to more subscribers," added Wallman.

FCC Chairman Kevin Martin has previously noted the advantages of 'open device', stating that, "Competition in the manufacturing and distribution of consumer devices has always led to innovation, lower price and higher quality."

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* - Supporters of 'open device':

Elected Officials:
-- House Commerce Committee Chairman John Dingell (D-MI)
-- House Subcommittee on Telecommunications and the Internet Chairman
Edward Markey (D-MA)
(http://energycommerce.house.gov/Press_110/110-ltr.050108.FCC.XMRadio.pdf)
-- Senate Small Business Committee Ranking Member Olympia Snowe (R-ME)
-- Senate Commerce Committee Member Claire McCaskill (D-MO)
(http://www.orbitcast.com/archives/SnoweMcCaskill_XM-Sirius.pdf)

Public Interest Groups:
-- Public Knowledge
(http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_

document=6519817283)
-- Media Access Project
(http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_

document=6519838104)
-- New America Foundation
(http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_

document=6519838104)
-- National Association of Telecommunications Officers and Advisors
(http://fjallfoss.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_

document=6519846179)
-- National Hispanic Media Coalition
(http://fjallfoss.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_

document=6520009086)

Businesses:
-- iBiquity
(http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_

document=6519836637)
-- HD Radio Alliance
(http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_

document=6519837359)

Media:
-- The Los Angeles Times Editorial Board
(http://www.latimes.com/news/opinion/la-ed-xm31mar31,0,4846171.story)
-- Orbitcast

(http://www.orbitcast.com/archives/open-device-debate-extends-to-sirius-xm .html)

-- SiriusBuzz
(http://siriusbuzz.com/open-access-what-it-means-to-the-merger.php)

Contact:
Kathy Wallman
202-641-5387

Taj Meadows
202-478-3697

First Call Analyst:
FCMN Contact:

Source: U.S. Electronics

CONTACT: Kathy Wallman, +1-202-641-5387, or Taj Meadows,
+1-202-478-3697, both of U.S. Electronics

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