J. Gregory Sidak and Hal J. Singer have written an anti-satellite radio merger Op-Ed piece for the Washington Times, one that is riddled with rhetoric and hypocrisy.
Entitled "Misunderstanding the XM/Sirius merger," the piece urges conservatives to "reject the idea of taking two unregulated competitors and creating in their place a brand-new regulated monopoly."
The article also criticizes the block-and-rebate plan, that would refund subscribers who choose to opt-out of adult programming. An amazing stance in a world where we are obsessed with violent and adult content in video games and media. But still, Sidak and Singer pull it off:
"...the Family Research Council blessed the merger after XM and Sirius promised to block sexually explicit channels in exchange for a small rebate. Given the sheer popularity of Howard Stern and similar types of edgy content among satellite radio subscribers, this 'phantom rebate' will likely be redeemed by only a handful of subscribers."
I'm sure the Parent Television Council would disagree with you there. It's not about there "sheer number" but the empowering of the consumer. (Newsflash: there are 130 channels other than Howard Stern on Sirius. Yes, shocking, I know.)
The entire article is generally targeted to the politically minded, particularly conservatives, but yet at the same time managed to denounce XM and Sirius' approach to the merger, calling it "a media blitz for a political campaign."
Of course, there's no mention of the NAB and its unrelenting lobbying efforts - which include full-page advertising - to block the merger. If anything can be considered a "media blitz" it would be the NAB's attacks on Sirius and XM. But why would they mention NAB? That doesn't lend towards their agenda. Afterall, Sidak was commissioned by C3SR, which is disclosed at the end of the article, but the C3SR itself is "supported" by the NAB. Mentioning the NAB would just expose the hypocrisy, so Sidak/Singer opt toward referring to them as "merger opponents" instead. Far less incriminating.
There's other issues I have with the article.
Sidak and Singer talk about a "price freeze" being promised by Sirius and XM. But a "freeze" indicates that Sirius-XM have promised to not raise prices for a period of time. This is just factually incorrect. Sirius-XM have made no such promise, though they have said they are open to the idea. Sidak/Singer are twisting the concept of a multi-tiered/a la carte pricing plan as offering "price freezes" - indeed the term "a la carte" is no where to be found in the article (oops, apparently it does) - and they base a large part of their argument of the deal being anti-competitive on a price freeze.
"Of course, if they truly believed this argument, XM and Sirius would not need to offer to freeze their prices. Competition would keep those prices at competitive levels."
And then there's this:
"There is an established framework used by antitrust authorities to analyze mergers, which involves defining the 'relevant market' and assessing the power to raise prices within that market. Under that framework, it is clear that this merger has serious problems, so XM and Sirius have rejected that framework. Instead of offering credible evidence that terrestrial radio (or any other audio service) constrains the price of satellite radio, they have approached the government's merger review proceeding as though it were a media blitz for a political campaign."
Unfortunately, this argument falls flat on its face as well. The DOJ process is completely non-transparent. They actually take measures to make sure that even those being interviewed can't get a read on the DOJ's opinion (i.e., if they think you're pro-merger, they as anti-merger questions, and vice versa).
So how does Sidak and Singer know that Sirius and XM "have rejected that framework"? How do they know what "evidence" Sirius and XM have submitted to prove its part of a larger relevant market? The answer is, they don't These statements are complete assumptions, and the opinion of Sidak and Singer.
Just like it's my own assumption and opinion that Sidak and Singer are full of....
"shit." Sidak and Singer are full of shit.
I wonder how stupid the NAB thinks Congressmen are?
- NAB lobbys Capitol Hill non-stop
- Sidak writes article condoning lobbying
- NAB goes back to lobbying
- Congress scratches head
Everyone knows that C3SR is a shell organization for the NAB... its like looking at SoundExchange and thinking they're not really the RIAA.
1. The block and refund rebate will be used by few subscribers because it is not economical. XM and Sirius will refund only $1/month to subscribers who don't want Stern, but will charge $6/month to subscribers who want to add Stern to the cheapest a la carte package. Consumers who want everything except for Stern are getting ripped off.
2. Nice non-denail of Xm and Sirius' efforts to create a media blitz to support the merger. Calling NAB names does nothing to dispute that fact. For more than 4 months, XM and sirius argued their case in the press rather than on the facts and the law.
3. Karmazin has stated over and over again before Congress that they would not raise prices for some period of time after the merger. That's called a price freeze. Duh. Its a condition specifically proposed in their merger application and supporting documents filed at the FCC.
4. Your last point is so very dumb. Sidak and Singer are talking about DOJ's approach based on all of their written opinions on mergers in the past. "There is an established framework used by antitrust authorities to analyze mergers, which involves defining the 'relevant market' and assessing the power to raise prices within that market." Of course Sidak/Singer aren't suggesting they can read the DOJ's mind in the current case, but if you read their letter a bit slower, you'd realize that of course they are referring to the DOJ's written, on the record, established framework for reviewing mergers over the past 15 years or more. And suggesting that by rejecting this framework, as XM and Sirius urge in their merger application and follow up studies, it would be a departure from legal precedent.
Chico, aka NAB troll
1.You have no idea how many people will choose the different a la carte pricing alternatives being offered. Just an uninformed opinion. No facts to back up that opinion.
2.The NAB has clearly been more aggressive in making their case in the media and with lobbyists, even bought a few congressmen. The NAB and their fake “consumer” group C3SR can not counter the public support for the merger, despite repeated efforts to get their employees to write emails and other comments to the FCC pretending to be subscribers against the merger. So, so foolish and transparent. Sirius and XM have filed a well documented rebuttal with the FCC supporting the merger and countering every effort by the NAB to obfuscate the facts. The NAB can’t deal with the facts, so they resort to “opinions”. Lame.
3.Karmazin has stated over and over that COMPETITION from “free” radio and others will not allow them to raise prices. If you want to call that a “price freeze” then join the NAB in misrepresenting the facts (oh, I forgot, you work for the NAB).
4.Sirius and XM are in the process of complying fully with the DOJ’s second request. They will follow the process as laid out by the DOJ, to suggest otherwise is just stupid.
Chico, you are full of SHit, go back up the NAB ass...stupid Troll
I've been thinking for a while about something: XM and Sirius are the only radio provider for people that live outside the range of terrestrial stations. If they offered a discount to anyone who lived outside the range of English-speaking terrestrial radio, I wonder if that would help the PR at all? After all, one criteria of monopoly is that it has to be essential in some way, and by offering a discount to customers that consider satellite essential, they might score some PR points.
Hope you don't mind if I ignore XMFAN's statement. Not really worth responding to. As for Jack's comments,
1. Of course you're right that's in an opiniion or a prediction. Noone will know the impact of the rebate until sometime after its implemented. Its just my own view that something seems strange when the facts are that XM and Sirius will charge $6 for Stern but only refund $1 to subs who don't want Stern.
2. Lobbying 101. XM and Sirius have ginned up support from subscribers and third party groups. So has NAB and other merger opponents. Of course, there are many independent expert public interest consumer groups that also oppose the merger that have nothing to do with NAB. Its too bad these folks' opiniions have been drowned out by NAB. But hopefully the FCC will give these views the weight the deserve.
3. If you read the Singer/Sidak thing carefully, they are not obfuscating the facts. Its well documented how the FCC and the DOJ review mergers. They're just arguing that XM and Sirius are asking the govt to depart from using these traditional standards in reviewing their merger.
4. True, Karmazin has repeated is Compete with Free mantra over and over, but again,if yyou take the time to read his statements before Congress and the XM and Sirius filing to the FCC, they promise not to raise prices for a period of time as a condition of being allowed to merge. Two different points entirely.
5. Nowhere do I suggest that XM and Sirius are not complying with the DOJ's request for more information. Not sure where you got that. Just to clarify, by "framework" I meant the DOJ's standards for reviewing the merger, not their process for gathering information.
6. Just one final point, if you don't mind. Is someone automatically a "troll" on orbitcast just because they oppose the merger? I thought this was an open forum but if not, I'll stop posting.
And for the rest of us, satellite radio just isn't a necessity. That makes it - by definition - not an illegal monopoly.
Think about it: if the cable company raised their price by $50 a month,we'd probably still pay it. We'd grumble, but we'd do it, because there's only (by law) one cable company in any given market. (Yes, others can theoretically compete, but generally the franchise system creates monopolies in any given region.)
But would people PAY an extra $10, $20, or $50 a month for satrad? Would you pay $50 a month for each Sirius receiver?
Sirius and XM are *already* at their peak price point, and everyone knows it. Satellite radio is a LUXURY for most of its market, and even the small minority who live outside of terrestrial radio's footprint can get DirecTV or Dish (and probably already have one or both.)
I can think of lots of ways that a post-merger company might suck. I can think of lots of ways that the service can get worse, but I can't think of a single, legitimate reason that the merger should be illegal. It just doesn't make sense. (The ONLY reason I can think of for the NAB trying to block it is because it would be a GOOD thing... and the NAB doesn't want the competition.)
Does anybody else wonder how much the NAB paid the Washington Post editorial board to take this opinion?
"Does anybody else wonder how much the NAB paid the Washington Post editorial board to take this opinion?"
$45, a bag of Cool Ranch Doritos and a mention or two during radio shows about 'Look at the article in the Washington Post'. It's all about the mentions...the cash and chips are just the gravy.
Chico, on point #4, I don't get how they have "rejected" the DOJ's framework? Because they're asking to merge? Because they're asking to have the relevant market defined? What EXACTLY is being "rejected" here?
Donkey - thanks for responding to me without calling me names. My understanding is that typically the DOJ and the FCC review mergers by first figuring out what the relevant market is, then deciding whether allowing the two companies to merge would be anticompetitive, and then weighing if the merger would serve the public interest, perhaps because of remedies or conditions imposed on the merged company like price freezes. Here, and this is not my own opinion, but based totally on xm and sirius' application, xm and sirius are arguing that because of a la carte and the other conditions they are willing to subject themselves to, the merger would benefit the public enough to outweigh any anticompetitive harms the merger would cause. So I think they are trying to sort of turn the normal "framework" on its head. that' sjust my understanding, but i'm no antitrust expert.
oh, and for tom and jackmyrhffer, you're really on top of this, not. first, its the washington times, not post. second, newspapers don't take bribes or anything to publish an editorial. and third, the washington times editorial page is supportive of the merger, so they probably decided to run the singer/sidak article to give the opposite view of their own position, which of course is exactly what a good newspaper should do. fourth, of course, the washington times has run multiple letters and editorials by mel karmazin,
there are many independent expert public interest consumer groups that also oppose the merger that have nothing to do with NAB.
No there is not.
Chico,
As Ryan pointed out, the DOJ process is closed to the public. Neither you nor those apparently uninformed clowns writing the editorial have a clue as to what case Sirius and XM are making to the DOJ. But as the DOJ interest is whether the merger is anticompetitive or not, I'll just fathom a guess that Mel and Gary know they have to demonstrate that it is not anti-competive to the DOJ if they want to get it approved (actually I suspect the NAB trolls know full well that the DOJ process is closed, but have chosen to mislead the public in suggesting that Sirius and XM are somehow trying to circumvent the standards/process or whatever you want to call it)
The standard for the FCC is “public interest” and the ala carte pricing along with other programming options is intended to assist in supporting the public interest – of course XM and Sirius understand that’s just one of the hurdles. That’s not all that Sirius and XM provided in there filing with the FCC – they laid out a pretty compelling case using hard facts that the merger would not be anti-competitive. Of course you and the NAB want to ignore that as well – but I doubt the FCC and the DOJ will ignore it. Must be why the NAB continues to resort to lies to the public to make their extremely weak case.
So Chico, are you with C3PR or NAB? No names, just tell us the truth.
Chico, "second, newspapers don't take bribes or anything to publish an editorial"
Maybe, but terrestrial radio does for certain airplay, its called "Payola" and broadcast radio has just paid a $12,000,000 fine for it.
http://www.nysscpa.org/home/2007/307/1week/article23.htm
Jack - I didn't mean to suggest the DOJ process was anything but closed. My arguments are based solely on their public filings to the FCC. I just assumed that XM and Sirius are making consistent antitrust arguments to the DOJ and the FCC. I suppose they could making differing arguments to the DOJ and FCC, but that may be unlikely. also, I'm actually just a nobody who doesn't even have satrad, although its definitely a great product, but I have done some consulting work for tv and radio stations, as well as telephone and cable tv companies.
Rich - all due respect, but you're incorrect. a quick look at the fcc's website has comments opposed to the merger from the consumer federation of america, consumers union, common cause, and the american antitrust institute among others. none of these groups hold the NAB in very high regard and certainly wouldn't take a position on such a high profile merger just because the NAB asked them too. If anything, they're probably holding their noses to oppose the merger because it puts them on the same side as NAB. free press and the prometheus project especially dislike the NAB, much more than you guys, and also oppose the merger. In fact, its the arguments of these expert consumer groups that are probably more persuasive than the terrestrial broadcasters views, since they represent consumers and have done so for decades in front of the fcc and congress and lots of other govt agencies. as for congressmen, senator dorgan, senator kohl, senator mclaskill, are all opposed to the merger and certainly wouldnt be just because the nab wanted them to be.
Paid for by the NAB
Ryan
I respectfully take issue with your commentary in several areas.
1. The NAB's "media blitz" has nothing to do with the issue at hand, so why should it be mentioned? It is totally a sideshow, which has probably helped the merger cause more than it is has hurt it; but it has no place in the fundamental argument of whether the merger should be permitted; it just isn't relevant.
2. As to the "price freeze", I think you're talking about a semantic difference -- they have interpreted a "willingness to consider it" as a negotiating position, effectively saying, "If that's what we have to do to make it happen, we'll do it." That is a reasonable interpretation -- once it is "on the table", the likelihood of it becoming a stipulated requirement is fairly high. Again, these are semantic differences.
3. Your comments about DOJ are totally off the mark. The DOJ's actions are TOTALLY transparent, in that they ultimately have to withstand scrutiny via the court system.
More importantly, the pre-existing law on this subject makes it very clear what the "framework" is (i.e., the definition of the market). Mel is trying to change the "framework" to one that will permit him to win his battle. The editorial is totally on the mark in this respect.
The upshot, it seems to me, is that Mel has attempted to run this process as the article indicates -- that is, as some sort of political campaign, rather than a legal process. Perhaps this will work (I certainly don't understand Washington well enough to know who's clout is more important). But the law SHOULD determine the outcome and the law is pretty clear on the matter -- the argument that merging two companies engaged in a duopoly does NOT decrease competition is simply untenable. It is not an argument that can be sensibly made, and on that basis alone it should be prohibited.
One other point: The entire problem goes away if Mel will just come out and say, "Sirius needs this merger to survive; without it, there will only be one satellite radio company anyway". The merger would not be prohibited if a monopoly is apt to result anyway, so if he believes it is essential to SIRI's survival, he should just say so. But to argue that reducing the number of players in a market by half doesn't adversely affect competition is absurd and Mel knows it -- thus, the political campaign to change the rules.
It is pretty hard to argue, on rational gounds, with the editorial.
i do think only one will survive but to say this publically will cause all sorts of shareholder lawsuits as the stock price falls even more--i think these things are being discussed in private and it will be sealed
i do think only one will survive but to say this publically will cause all sorts of shareholder lawsuits as the stock price falls even more--i think these things are being discussed in private and it will be sealed
i do think only one will survive but to say this publically will cause all sorts of shareholder lawsuits as the stock price falls even more--i think these things are being discussed in private and it will be sealed
>>>> i do think only one will survive but to say this publically will cause all sorts of shareholder lawsuits as the stock price falls even more-
While Sirius continues to be a financially troubled company, I don't believe their survival is threatened at this point, and XM's certainly isn't.
That said, the public's expectation that antitrust law will protect them from monopoly pricing should not be waived on the basis of one company failing, UNLESS that company's management is willing to be forthright on the subject. If Mel wants to get past the antitrust law on this basis, he should not be allowed to do it with statements that are at-odds with the legal basis for waiving the prohibition.