In conjunction with its ongoing deliberations on the proposed merger of XM and Sirius Satellite Radio, the FCC has opened rulemaking proceedings to determine whether language, contained within a 1997 report and order, that seemingly prohibits one satellite digital audio radio service (SDARS) licensee from acquiring the other SDARS licensee constitutes a “binding Commission rule.” The FCC’s 1997 order establishing the SDARS service states the following: “even after [SDARS] licenses are granted, one licensee will not be permitted to acquire control of the other remaining [SDARS] licensee.” The $13 billion merger of XM and Sirius would combine the sole providers of SDARS services to the U.S. market. In merger documents filed with the FCC, XM and Sirius argue that the clause constitutes a policy statement under the Administrative Procedure Act rather than a binding FCC rule because that clause was never added to the Code of Federal Regulations. The rulemaking notice seeks comment on that contention. Should the FCC determine ultimately that the prohibition against an SDARS merger is binding, comment is also sought on the extent to which the agency should waive or modify the prohibition to allow a merger that would otherwise serve the public interest. Describing the notice as the next step toward a grant of their merger request, XM and Sirius, in a joint statement, said: “this action puts all of the FCC decisions regarding approval of the merger on track.” Meanwhile, a report issued by Harold Furchtgott-Roth, an economist and former FCC commissioner, asserts that FCC approval of the XM-Sirius deal is warranted as the two SDARS providers compete not only against each other but against “terrestrial radio, pre-recorded music devices, mobile phones, and fixed and mobile Internet services.” Questioning the extent to which satellite radio is a market unto itself, Furchtgott-Roth cites the variety of fixed and mobile audio alternatives—including many of the 237 million mobile phones currently in use that support music downloads—in support of his conclusion that “satellite radio has a small presence in comparison to other comparable communications services.”