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Print E-mail del.icio.us 40 comment(s) - last by KristopherKubi.. on Jun 14 at 10:23 AM

This is an excerpt of the FCC's pleading cycle notice, setting a July 9 deadline for public comment on the proposed merger between XM and Sirius.
Consumers invited to sound off on $4.7 billion deal to unite XM and Sirius

The Federal Communications Commission issued a notice (PDF) asking for members of the public to voice their opinions on the merits of combining the nation's two satellite radio broadcasters.

The notice marks the FCC's acceptance of the two companies’ applications to merge. The combined assets of the two media players were valued at approximately $4.7 million when the deal was first announced last February.

The FCC now has less than 180 days to decide whether to approve the proposed merger, placing the deadline sometime in December of this year. The Department of Justice must also add its approval for the deal to proceed. The DOJ is charged with assessing whether the combination of the only two companies broadcasting audio programming via satellite within the United States would constitute an illegal monopoly.

The two original satellite broadcast licenses granted to XM and Sirius by the FCC 10 years ago expressly stipulated that no single licensee would be "permitted to acquire control" of both licenses. However, proponents of the merger have argued that the preponderance of alternative audio devices -- from iPods to music-playing mobile phones -- has substantially altered the marketplace, ensuring that consumers will continue to enjoy a wide variety of competitive offerings.

The deadline for interested parties to file comments, or petitions to deny the merger, is July 9, 2007. Comments can be filed electronically using the FCC's online form.

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Precedence established ultimately by this decision
By Emryse on 6/12/2007 1:14:48 PM , Rating: 4
I have a very real and serious problem with this merger; I can't believe my eyes while reading the responses of the majority of folks posting so far.

How possibly could this be a good thing?

We do not exist in a society where transactions such as this occur exclusively with not outlaying or future ramifications pertaining to other similar (or in many cases not-so-similar) situations.

We do exist in a business-driven economy that seeks to exploit capitalist benefits through monopolistic or exclusivity-controlled means - such is the case here.

The FCC (or any government entity) should not be in the business of bailing out private business; each and every single time we as a government have done this - major problems. (Airline industry, bank and finance industry, etc...)

If either XM or Sirius fails as a business, it's because of their model, their product - or both. Obviously this indicates a lack of interest or demand for their services. However, I don't believe for a second that either company is in anywhere near that desperate of a position... both are incorporated and thus investors are protected; the financial backing for both comes from very deep pockets.

No; what's really happening here (and it's not a conspiracy - it's just business strategy) is that satellite radio cannot stay "commercial free" forever. However, the marketplace for commercial format is extremely competitive. Really, it’s the same as cable television was so many years ago. Now, I can’t tell the difference in volume of commercials from cable TV to free TV. Satellite radio recognizes that their true enemy is RBA and commercial radio – and they don’t want to be competing within their own niche while at the same time competing against free commercial radio.

None of these reasons describe a need to merge that will benefit the consumer. And, even in the event that some of the comments posted here regarding supposed benefits are even somewhat conveyed through the merger – this sets an example and guidance for future business to merge into a single entity within a market niche; and it’s common sense that when a business is in a position to exclusively offer a product that can be acquired nowhere else, then that business is not forced to compete or offer quality. This could set trends for software, automobiles, health services, etc… and it’s already bad enough out there as it is. You won’t be able to vote with your pocket book on the only health care option available (which is where we’ll be in 20 years if we allow such deals as this merger to go through).

Additionally, who is going to regulate or monitor a single entity within a market niche? That’s called government control – we don’t need more of that. Without doubt, the very best outcome in this situation would be for the FCC to NOT allow this merger; it would force these two companies to compete, re-think their business model, re-think what they’re paying their hosts and employees, re-think their cost value and offerings – that sounds like a good deal for the consumer. Necessity is the mother of learning, invention, creativity – success for the satellite radio (and for any other industry) will come no other way. I will definitely be letting the FCC know how I feel on this issue.

Oh, and a final note for those who will say “But FFC denying the merger is government control…” my response is: “True, but they’re not telling these two organizations how to do business – they’re just making sure business is done competitively.” I would rather be told to compete than be told to sell my product for not more than $X amount of profit.




By h0kiez on 6/12/2007 1:34:23 PM , Rating: 3
"The FCC (or any government entity) should not be in the business of bailing out private business"

You mean like how denying this merger would bail out Clear Channel and the rest of the terrestrial radio lobbyists?


By Emryse on 6/12/2007 1:47:15 PM , Rating: 2
Um... no, I don't. Commercial radio is very much alive and kicking, and as I stated in my post, once this venue is exhausted, advertising will move to satellite radio.

Companies will ALWAYS do whatever it takes to expose you to their product - we exist in an age where it is NOT possible to avoid advertising. And trust me; all of those things that you do or purchase to "avoid" advertising; they're working on ways to ensure that you don't have that option for long. That, and/or hike up the fees for advertisement-free content to extremely high premiums.

Just look at all of the non-traditional sources of revenue being explored for advertising; it's even migrating into video games! Nope - I'm sorry, but FCC denial doesn't bail anyone out; it protects the consumer. Approving the merger would protect business - that's not the government's job (well, I guess that's not true considering the number of lobbyists per ear of each congressman) or at least that's not supposed to be the government's job.


By Heinrich on 6/12/2007 11:44:29 PM , Rating: 2
Commercial radio is not 'alive and kicking' in the sense of creativity. The large corporations have sterilized radio to the point that all the repetitive 3:30 songs that all sound the same are no longer interesting to the truly discerning music consumer. This is why satellite radio exists - those of us who truly see through the superficial phony verneer of commercial radio and are repulsed by the monopolistic corporations that attempt to control every last detail of our lives.


By KristopherKubicki (blog) on 6/14/2007 10:22:17 AM , Rating: 2
I sort of agree with H0kiez here. There are very few political things I'll discuss publicly, but I think if there's one thing that's stifled American culture over the last few decades it's been the combination of Clear Channel and Viacomm.

Bringing copious amounts of music to the masses for relatively cheap would be one of worst things that could happen to that racket. XM and Sirius just have to stay alive long enough for something like that to happen.


By h0kiez on 6/12/2007 1:36:44 PM , Rating: 2
"Satellite radio recognizes that their true enemy is RBA and commercial radio – and they don’t want to be competing within their own niche while at the same time competing against free commercial radio."

That's totally true. And if it were my company I wouldn't want to compete in my own niche either, espectially if I had already done it for half a decade and was still bleeding cash at an alarming rate.


By SmokeRngs on 6/12/2007 4:37:57 PM , Rating: 2
quote:
And if it were my company I wouldn't want to compete in my own niche either, espectially if I had already done it for half a decade and was still bleeding cash at an alarming rate.


That sounds like a good reason to block any merger. If neither one can come up with a viable business model, then why should either one survive much less both?

Both companies seriously overbid for everything they acquired the rights for. That's bad business and just flat out stupid. It's one thing to run in the red until you can get a viable setup going. It's another to blow money recklessly on hugely inflated prices for the rights to something and then doing it over and over. Both companies are guilty of this and of running up the price for the rights for everything. They are both responsible for the current situation they find themselves in. Why should they be given a free pass on their lousy business decisions?

Considering the way both companies have been managed, I wouldn't trust either one of them to be viable without some type of subsidy. They promised their listeners the world and the listeners believed. Too bad the listeners weren't told they couldn't have the world unless they start forking out considerably more money in the long run.

Merging the two companies into one will not magically make it a viable business model or give the single company profitability.

Both companies see themselves dying off at the current pace they are going at. They created this problem for themselves and they need to dig themselves out of the hole themselves. If your company or business model can't handle competition, you either need to change to something that can be competitive or quit. It's as simple as that.


By h0kiez on 6/12/2007 1:39:12 PM , Rating: 2
"and it’s common sense that when a business is in a position to exclusively offer a product that can be acquired nowhere else, then that business is not forced to compete or offer quality. This could set trends for software, automobiles, health services, etc…"

Bad analogy. We need autos and health services. Nobody needs Sat. radio. By a show of hands, how many of us would cancel thier satellite radio if they upped the price to $50 a month? I would...and if they did that, they'd be out of business in 6 months.


By Emryse on 6/12/2007 1:58:23 PM , Rating: 2
quote:
Bad analogy. We need autos and health services.


According to whom? Who decides what you need? And more importantly, whose needs come first - those of the consumers or the businesses?

Allowance of this merger is a clear statement that the needs of the business are a priority over those of the consumer.

And with regards to the analogy - it's a great analogy, because even in a non-monopolistic environment like health care industry, HMOs and PPOs try to decide what their consumers "need" on a regular basis. "We're sorry, you don't 'need' that surgery..."

Principles apply to the whole, not the specific; in this case, it may be something as small as a service subscription, however even in a small situation - I still demand choice and competition!

Oh, and consider all of the other "non-essential" goods or services that could be applicably affected by this situation...

Do you really "need" more than one news company, or more than one computer graphics manufacturer, or more than one hardware review forum?


By FITCamaro on 6/12/2007 2:36:36 PM , Rating: 2
Well until someone invents a pill that stops all disease and makes us heal instantly, we all need healthcare no matter what their opinion on the matter.

As far as autos go, I need one. Anyone that doesn't live in an area with reliable public transportation needs one. Unless of course you're so rich that you can have all your groceries delivered, buy all your clothes and other things online and have them delivered, ride a bike to anywhere to meet with your friends or have them pick you up, live close enough to be able to ride a bike and get there in a reasonable amount of time, need I go on?

The majority of people in todays world in a modern country need cars. I like my 8-mile 10-15 minute drive to work. I don't feel like getting up an hour earlier so I can ride a bike to work and arrive all hot and sweaty when its 100 degrees outside or frozen and sick when its 30. Not exactly professional either.


By Oregonian2 on 6/12/2007 3:21:56 PM , Rating: 2
quote:
The FCC (or any government entity) should not be in the business of bailing out private business; each and every single time we as a government have done this - major problems. (Airline industry, bank and finance industry, etc...)


FCC isn't being asked to bail them out. No money is requested to go from the FCC to either of those companies. FCC is only being asked to allow those companies to try and save themselves. The FCC is being asked to "get out of the way" of what private business is trying to do.


By theapparition on 6/13/2007 7:54:27 AM , Rating: 2
While you have a long post, I think your misguided about many points.

quote:
The FCC (or any government entity) should not be in the business of bailing out private business; each and every single time we as a government have done this - major problems.

They are not bailing them out. The government isn't providing them any money, nor any special tax breaks. Surely, you understand the difference.

quote:
If either XM or Sirius fails as a business, it's because of their model, their product - or both. Obviously this indicates a lack of interest or demand for their services.

Agreed. So if their model is to merge, then let them. They still may fail, or succeed, but denying the right to merge has no merit.

quote:
However, I don't believe for a second that either company is in anywhere near that desperate of a position... both are incorporated and thus investors are protected; the financial backing for both comes from very deep pockets.

Stockholders (the owners) would disagree with you. Incorporation does nothing to protect investors. Since both stocks are traded publicly, the only thing that matters for investors is long term finantial health (is this a good investment?).

quote:
Satellite radio recognizes that their true enemy is RBA and commercial radio – and they don’t want to be competing within their own niche while at the same time competing against free commercial radio.

Since you agree that satellites real competition is terrestiral based radio, then why the opposition to the merger? If the merged entity ultimately fails against "free" radio, than so be it, the market has decided. However, having the goverment step in to regulate whether they can merge or not is against your original assertion (that governments should intervene with companies, or "bail them out"). All the FCC has to do here is nothing . Let the market decide whether it is a good move or not.

quote:
None of these reasons describe a need to merge that will benefit the consumer.

Let's see, you'd now be able to listen to programs from both services for a single charge, on a single technology reciever? How can anyone not see the benefit of this???
Dual incompatible services are not adopted by the masses (see BR vs HD-DVD). I submit that sales will go up when there is a universal service.

quote:
And, even in the event that some of the comments posted here regarding supposed benefits are even somewhat conveyed through the merger – this sets an example and guidance for future business to merge into a single entity within a market niche

No this does not set a precident. The FCC only governs radio broadcast companies. If Microsoft and Apple wanted to merge, do you think the FCC would have a say? Sorry, but that is just a dumb assertion.

quote:
and it’s common sense that when a business is in a position to exclusively offer a product that can be acquired nowhere else, then that business is not forced to compete or offer quality.

But once again, you already indicated that they are not exclusive suppliers of "radio". Consumers have the choice to listen to radio, HD-radio, or the myriad of other portable medias available.

quote:
Additionally, who is going to regulate or monitor a single entity within a market niche? That’s called government control – we don’t need more of that. Without doubt, the very best outcome in this situation would be for the FCC to NOT allow this merger;

Government control? Isn't that what you are advocating by wanting the FCC to step in? No regulation or monitoring is required now, why would it need to change?

quote:
I will definitely be letting the FCC know how I feel on this issue.

As will I.

quote:
Oh, and a final note for those who will say “But FFC denying the merger is government control…” my response is: “True, but they’re not telling these two organizations how to do business – they’re just making sure business is done competitively.” I would rather be told to compete than be told to sell my product for not more than $X amount of profit.

They are telling them how to do business, when the business model is to merge with the competition.
How about not telling them how to do business, nor telling them how to make a profit. Let the consumer decide. And let their business model succeed or fail on that. No government intervention is necessary.


Yes do it
By electriple9 on 6/12/2007 7:15:54 AM , Rating: 2
Join up, one service, more channels.
Thanks




RE: Yes do it
By AlexWade on 6/12/2007 8:25:59 AM , Rating: 3
I'm going to tell them to approve the merger because if they raise prices, I'm going to vote with my wallet and leave them. I've got my iPod to keep my tunes going for a long long time.


RE: Yes do it
By AntiM on 6/12/2007 10:03:09 AM , Rating: 2
Without the merger, I doubt either one of them will survive much longer as separate entities. I don't see any harm in it right now. I would like to see satellite radio succeed. Will we regret it in the future ?...possibly.


RE: Yes do it
By knipfty on 6/12/2007 8:38:56 AM , Rating: 3
I currently own my second XM Radio. I love it. My gripe is that I was shopping for a new car and it came with Sirius. I don't want to switch as the programming content is different.

If they were one, it would be a no brainer. It just adds another decision point to the car buying process.

If they raised their prices, I'm sure plenty of people will vote with their pocketbooks and leave. There are so many alternatives.


DOA
By jrb531 on 6/12/2007 9:17:19 AM , Rating: 2
A few years ago Dish And DTV were going to merge. From a technical standpoint this made a hell of alot of sense. It cost the same to transmit to 1 person as it does 100 million people so why have two sets of birds in the sky transmitting duplicate channels? The real competition was, after all, Cable but the FCC did not see it that way and somehow (almost beyond belief!) stated that in areas in which people did not have Cable TV (farms???) then the new Dish would somehow find a way to jack up prices due to no competition in that area.

IE Dish would charge a competative price in cities with cable competition but in the boonies they would charge a different price. Amazing! The speculation was that this was a bought and paid for ruling by the cable industry.

Enter today and replace Dish and DTV with XM and Serious.

How is this any different? How could this be allowed and the Dish/DTV merger not allowed? They "claim" that their new competition would be local radio and even get silly and say that Ipods are the competition. I guess what Dish and DTV should have told the FCC that their real competition is DVD's ROTFL!

So, IMHO, this is dead on arrival. Add to this that the FCC specifically told both companies that they could never merge when they got their license.

Sure one company would same $$$ just like the Dish/DTV would save a ton of money but while the Dish/DTV have "real" and powerful competition in the "huge" Cable TV industry... this proposed merger would result in ZERO compeption.

Conclusion: DOA

-JB




RE: DOA
By geno24 on 6/12/2007 11:24:21 AM , Rating: 2
I agree that it's probably DOA for those reasons, it's just ironic that for years it's been perfectly acceptable to have only one choice for cable TV in a community.


RE: DOA
By Oregonian2 on 6/12/2007 3:46:12 PM , Rating: 2
quote:
How is this any different? How could this be allowed and the Dish/DTV merger not allowed? They "claim" that their new competition would be local radio and even get silly and say that Ipods are the competition. I guess what Dish and DTV should have told the FCC that their real competition is DVD's ROTFL!


There are some major differences.

One is that DirecTV and Dish weren't pretty close to both going under like these two radio sat companies seem to be.

Second one is that DTV and Dish have less competition in that most customers have only ONE cable provider that is the real competition. Radio companies have both local broadcast, the audio channels on DTV, web radio stations (until next month), and as you say ipods, CD's, and CD's filled with MP3's ripped from CDs with the lousy songs left out (wife's car will play those). Audio, unlike video, has been traditionally heavily mobile with recorded music since the original Sony Walkman a zillion years ago. The competition argument is a LOT stronger for audio than video. Although I CAN have a movie on my cell phone, the quality really really sucks (220 x 144 .3GP or some such) while it'll do comparatively high quality stereo music (MP3, AAC, AAC+, AAC enhanced) and even do that stereo over bluetooth. Vide