In the midst of all the hype about what the FCC is — or is not — including in its decision on the sat rad merger lies one shareholder who has been doggedly trying to get the two companies to answer questions about interoperability for nearly three years.
I wrote a year ago about the quest of Michael Hartleib, a California real estate broker with some 140,000 shares and 50,000 options in Sirius and “a small number” of XM shares. He had filed a petition for Declaratory Ruling in 2007 asking the FCC to compel XM and Sirius to go public about the interoperable radio issue, saying consumers don’t have access to such radios and shareholders have been kept in the dark about the impact that providing such radios would have had on both companies’ financial performance. That request remains pending.
The satellite companies say they were charged only to design and develop an interoperable sat rad tuner and that they’ve complied. Hartleib says there’s more to the story that should come out before the FCC votes on the deal.
To that end, this week he filed in U.S. District Court in Central California a civil lawsuit against current and former executives of both companies, alleging they’ve defrauded their shareholders.
The companies have 20 days to respond and he’s asked the court to stay any FCC decision until the allegations are addressed. Any decision to fine the companies in the meantime, he said, would ultimately hurt their shareholders by hurting the companies’ bottom line, noting that he’s already lost “hundreds of thousands of dollars” on his shares, initially purchased at around $6 each.
We’ll have to see if interoperability is even mentioned in any conditions the FCC places on the deal, if approved.