Leaders of the Black Congressional Caucus should be embarrassed by the blatant favoritism they've shown to Georgetown Partners LLC, a minority-owned private equity shop that is seeking a cut for itself from the proposed merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc.
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Rep. G.K. Butterfield, D-N.C., chairman of the caucus' working group on satellite radio, and some of his colleagues are up in arms over a condition floated by Federal Communications Commission Chairman Kevin Martin that the companies agreed to in return for commission approval of their $5 billion merger. Over the weekend Martin revealed that the companies accepted a series of concessions he proposed, including one to lease 8% of their capacity, or 24 channels, for programming run by minorities and women.
Even though another leading public advocacy group, Public Knowledge, endorsed Martin's idea, Butterfield told The Washington Post the compromise was "completely unacceptable" and demanded that the FCC designate much more, along the lines of a number suggested by Georgetown Partners earlier this year. Butterfield was backed up by Rep. Elijah Cummings, D-Md., a former chairman of the caucus.
In a proposal to the FCC, Georgetown suggested that 20% of the merged company's satellite capacity be reserved for minority programming. Of course, Georgetown offered to be the designated guardian and operator of that spectrum. Davenport even finagled an endorsement from Rainbow Push Coalition President Jessie Jackson.
Such self-dealing is what gives minority set-asides a bad reputation. Fortunately, despite heavy lobbying, FCC aides said Monday that Georgetown's petition was not a factor in Martin's proposal.
Butterfield maintained that he was not insisting that the set-aside necessarily go to Georgetown Partners but acknowledged he lifted the 20% from the minority company's plan and that he hoped at least some of the spectrum would go to Georgetown. - Bill McConnell
See story about the Black caucus effort from The Washington Post
See related story about FCC approval from TheDeal.com
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