Bloomberg has a report today that discusses XM's "rogue" repeaters and how they are adding to the scrutiny over the Sirius-XM merger.

The article is sure to focus on the fact that at least a third of XM's 800 repeaters are in violation and these serve 42 percent of XM's network. It goes on to paint a bleak picture about the situation, even though they do allow XM spokesman Chance Patterson to state that "XM voluntarily disclosed these variances to the FCC" and has taken "unilateral action to eliminate many of them."

Regardless, it's brought the focus of U.S. Representative Edward Markey, who chairs the House Telecommunications and Internet Subcommittee.

"What is the expectation it will follow through or fulfill any public interest conditions?" Markey, a Massachusetts Democrat, said in an e-mailed statement.

And you can bet all of this comes to the glee of the NAB. They even put the article front-and-center in their daily newsletter today.

"Given their repeated lack of candor in dealing with the FCC, it is astonishing that XM and Sirius would now seek a government-sanctioned monopoly,'' said NAB spokesman Dennis Wharton, in the article.

Astonishing indeed, lest we forget all about that payola scandal. 

[Bloomberg] 

Unsurprisingly, the Independent Spanish Broadcasters Association (ISBA) has joined up with their brethren, the NAB, to come out against the Sirius-XM merger.

Zee Ferrufino, a member of the ISBA board and the owner of KBNO 1280 AM in Denver, said, "Anything that's a monopoly will affect everybody. Not only Spanish broadcasters but any radio station."

And what of the chances of the merger going through?

"They are crazy," Ferrufino told The Denver Post. "I don't believe this is going to happen. Most people are against it."

[The Denver Post] 

Looks like the NAB's hypocrisy is being picked up by the media now. Yesterday's Wall Street Journal features an article, What's the Frequency, NAB? that questions the NAB's motives behind opposing the Sirius-XM merger.

I really like this piece, mainly because it cleanly and clearly spells the whole situation out:

"No one knows whether the public will ever really take to the pay model, but it's not the role of the government to help the NAB smother a fledgling competitor in the crib. This appears to be a merger of desperation more than anything, and blocking it could well result in no satellite-radio providers and thus fewer listening options for consumers."

Oh, and aside from all that, I do relish in seeing the NAB exposed for what it truly is.  

[Wall Street Journal] 

Satellite Television
In the 1980s, the NAB fought the FCC's decision to award DBS licenses, claiming that the Communications Act forbade a nationwide licensee. The NAB's position was so extreme that a federal appeals court described the NAB as "luddite[s]," saying it would be irresponsible to deny consumers "new technology that offers the promise of substantial public benefit." The court also chided terrestrial broadcasters, commenting that "the Act does not entrench any particular system of broadcasting: existing systems, like existing licensees, have no entitlement that permits them to deflect competitive pressure from innovative and effective technology."
(NAB v. FCC, 790 F.2d 1190, 1197-98 – D.C. Cir., 1984)

"Drop-In" Stations
In the 1980s, the FCC issued a decision allowing the allotment of additional FM frequencies. The NAB and other broadcasters sought to have restrictions imposed on the operation of these so-called "drop-in" FM stations, which were made possible by technological improvements in radio receivers. The NAB also filed a petition for reconsideration of the FCC's decision to authorize the new stations.
(Modification of FM Broadcast Station Rules to Increase the Availability of Commercial FM Broadcast Assignments, 87 F.C.C. 2d 279, 1984.)

Low-Power Radio
The FCC first proposed the establishment of rules for low power radio service in 1999. The NAB and other broadcasters submitted comments vehemently opposing this new service. The then-FCC Chairman William Kennard said this opposition was "about the haves—the broadcast industry—trying to prevent the have-nots—small community and educational organizations—from having just a little piece of the pie. Just a little piece of the airwaves which belong to all of the people."
(Statement of FCC Chairman William E. Kennard on Low Power FM Radio Initiative, 2000 FCC Lexis 1536 – March 27, 2000)

Low-Power TV Band Devices
In 2004, the FCC proposed to allow certain types of unlicensed devices to operate in the broadcast television spectrum at locations where the spectrum is not being used. As the Commission explained, permitting such operations would enable "more efficient and effective use of the TV spectrum and would have significant benefits for the public by allowing the development of new and innovative types" of broadband devices. The NAB and other broadcast interests sought to impede the operation of these new devices, though they would operate only on channels not being used for licensed services. Even after the FCC issued a decision in 2006 authorizing the devices, the NAB and other broadcast interests asked FCC to impose an extensive set of restrictions on the operation of the devices.
(Unlicensed Operation in the TV Broadcast Bands; Additional Spectrum for Unlicensed Devices Below 900 MHz and in the 3 GHz Band, 19 FCC Rcd 10018 – 2004)
(See Joint Comments of The Association for Maximum Service Telelvision, Inc. and the National Association of Broadcasters, ET Docket Nos. 04-186 and 02-380 - filed Jan. 31, 2007)

Satellite Radio
From the start, the NAB vehemently opposed allocation of spectrum for and licensing of satellite radio, asserting that it would destroy local radio broadcasting. The radio industry’s evidence was embarrassingly thin ranging from studies that assumed satellite radios would be free, claiming that a temporary revenue fall-off during a recession was indicative of the declining fortunes of terrestrial broadcasters, to a survey of radio station executives, each of whom claimed that satellite radio would be the death of localism. Ultimately, NAB’s opposition delayed licensing satellite radio for seven years. Now the organization is looking to stop the Sirius-XM merger from going through, using any means necessary.
(Rules and Policies for the Digital Audio Radio Satellite Service, 12 FCC Rcd 5754, ¶ 19 - 1997)
(Reply Comments of CD Radio, at 29 - filed Oct. 13, 1995)

In an incredibly descriptive article entitled Dinosaurs vs. Satellites, senior editor Radley Balko paints a clear picture of the NAB's efforts to undermine the satellite radio industry.

From their consistent flip-flops in defining competition, to anti-satellite radio advertising (which, miraculously, has disappears from their website) to vehement protection of "localism" - we see the true colors of the NAB through this article.

One interesting thing I didn't know: "... the NAB lets members of Congress and their families record public service announcements in NAB studios free of charge. The commercials are then broadcast in the members districts on NAB stations, also free of charge. That's broadcast time politicians often have to pay thousands of dollars to reserve."

Wow.

[Reason Magazine] 

In response to the NAB taking out an ad quoting their own paid advocates' statements, here's my own faux print ad, highlighting the NAB's own contradictory statements about "competition" in the audio market.

The NAB has placed the advertisement below in recent issues of Communications Daily, Congress Daily and Roll Call.

From this ad, we also learn of a new website launched by the NAB - xmsiriusmonopoly.com - which must still be hot off the presses, because some of the links on their site aren't active yet. The site features select media clippings on the merger, video of NAB members' testimony and other links supporting their position.

It's funny that three of the quotes used in this ad are based on the NAB commissioning 3rd parties to write them (if you don't know what I'm talking about then see here, here and here).

While the Senate was holding a hearing about the Sirius-XM merger, FCC Commissioner Michael Copps was talking with David Rehr during the annual FCC Breakfast at NAB2007 on the same subject.

When asked about the merger's prospects, Copps pointed to FCC Chairman Kevin Martin's comments, "Chairman Martin has already indicated it's a climb for him, well, it's a pretty steep climb for me."

Copps added that he would not prejudge the merger since it was currently before the commission.

Copps also said that there seemed to be quite the disconnect between the NAB's argument that broadcasters did not compete with satellite radio when it came to this merger, and the argument that it was "one big happy competitive family" when it came to seeking media ownership rule changes.

[Broadcasting & Cable] 

When NAB President and CEO David K. Rehr delivered his opening keynote address at NAB2007 in Las Vegas yesterday, he unsurprisingly used the opportunity to voice the NAB's adamant opposition to the Sirius-XM merger. Rehr said the merger "certainly would not be in the consumer's benefit," adding his view that "this is not about the consumer. It is not about advancing technology. It is about lining the pockets of financiers and corporate executives."

So let's take a look at the NAB's long history of lobbying in Washington against the development of satellite radio. Afterall, this is an organization that is so concerned with the advancement of technology, the benefits of the consumer - and at same time, not concerned with the lining of one's pockets. Surely then they wouldn't try to stifle open competition from satellite radio right?

The reality is that for more than 25 years, the NAB has objected to the evolution of communications technology, including satellite television, "drop in" radio stations, low-power radio and low-power TV band devices... all in addition to their opposition to satellite radio.

Their latest effort to block the merger of Sirius and XM is actually only part of a massive multimillion dollar effort that began 17  years ago. Below is a timeline of the NAB's efforts against satellite radio, long before a single satellite was even launched:

1990: The NAB tried to make end run around government plans to create a satellite system by proposing a digital system using land-based radios.
1992: The NAB mobilized opposition to the FCC’s proposal to set aside spectrum for satellite radio.
1994: The NAB submitted a filing to the FCC opposing any licenses to operate satellite radio technology.
1995: The NAB filed a report with the FCC and mounted a publicity campaign warning that satellite radio “will fragment radio audiences and make local radio unprofitable.”
1997: The NAB paid Kagan Consulting to produce an “independent report” claiming that FM radio would suffer great financial harm from satellite radio.

The NAB’s efforts to stop satellite radio failed. That, however, didn't stop their opposition.

At the heart of NAB’s argument is the claim that the merger is anti-competitive. But to me, the best validation of the true competition in the audio marketplace is the fierce response that the NAB has had to the Sirius-XM merger proposal. Understand this: The NAB is not motivated by serving the greater good. They are in business to advocate for their members.

The NAB knows that Sirius and XM compete with over 10,000 free radio stations in the country. The NAB (and its members in numerous SEC filings), have admitted it:

• Last September, in his remarks to the NAB Radio Show in Dallas, Texas, NAB President and CEO David Rehr declared, “In 2006, we have satellite and internet radio [as competitors]. And barely a day passes without the introduction of a new competing device or service. But we have news for our competitors: ‘We will beat you – as we have beaten those change agents in the past.’ ”
• The NAB in October 2006 provided media ownership comments to the FCC seeking relaxation of radio ownership regulations (how ironic?) and cited satellite radio and other competitors as justification.
• That same month at the National Press Club, the NAB’s President and CEO, David Rehr, cited satellite radio as one of AM/FM’s competitors.  

But as soon as the merger was announced, the NAB embarked on a non-stop campaign to distract regulators and consumers from the facts surrounding the proposed Sirius-XM merger:

• Washington guns for hire...
  
  The NAB has used its money for any Washington hired guns it could find, notably John Ashcroft. The Wall Street Journal reported that "Former Attorney General John Ashcroft, who sent a letter…to his successor Alberto Gonzales blasting the proposed merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., approached XM in the days after the merger was announced offering the firm his consulting services." The NAB has since hired James C. Miller and Philip M. Napoli to send their own "independent" letters of opposition.
  
  
  
• And the verdict from the Carmel Group is...
  The NAB also paid the Carmel Group, a California consulting firm, to change its views about competition in the audio entertainment market. In an article written a year-and-a-half ago, before being hired by NAB, Carmel’s Jimmy Schaeffler described satellite radio’s competitors as "traditional analog AM & FM radio, as well as burgeoning services like MP3 players, terrestrial radio, and video- and Internet-to-the-vehicle." Yet, after receiving funds from the NAB, Mr. Schaeffler produced a white paper saying exactly the opposite.
  
  
• The best funded college student group I know...
  On February 28th, Corporate Crime Reporter uncovered the real story about the Consumer Coalition for Competition in Satellite Radio (C3SR), a group of law students opposed to the XM-Sirius merger. C3SR claimed to be an independent grassroots consumer organization and refused to say who funded it. But admitted to being "supported" by the NAB. And is able to afford commissioning reports (which reportedly can cost upwards of $400/hour) by Gregory Sidak of Criterion Economics.
  
  
• Legislators legislating on their own behalf...
  Mike Hubbard, Alabama's House Minority Leader, was the lead sponsor of a non-binding resolution against the merger of Sirius and XM, which was passed by the Alabama House of Representatives on March 29th. Interestingly, Hubbard is a member of the Alabama Broadcasters Association who owns a terrestrial radio station and an audio production company serving the national broadcast industry.

And, of course, their rhetoric has changed. NAB President Rehr now claims that satellite radio doesn't compete with AM and FM radio.

Now the competition is "one way" (how convenient), and the $20 billion radio industry will face unfair competition from a combined Sirius-XM (which together have a mere 3.4% of total radio listening, according to a recent Arbitron survey).

NAB members like Clear Channel claim that a merged satellite radio company would unfairly hurt "local" radio (imagine that, Clear Channel is now "local"). Of course, Clear Channel Communications is well diversified and is working to provide nationwide mutlichannel audio content for HD Radio stations, mobile wireless audio providers and more. Don't believe me? Just listen for yourself.

The harder the NAB works to quash competition, the easier it is to see their hypocrisy. "Words have consequences," Rehr said in his keynote yesterday. So true.

Here's a video that was sent to me that I think everyone will find entertaining. It pretty much speaks for itself: