Speaking at the NAB Radio Show this morning, FCC Chairman Kevin Martin spoke only generally about the Sirius-XM merger but said that the companies had "interesting proposals" to justify the merger and protect consumers.

During the annual FCC Breakfast, the FCC Chairman fielded several questions: from public interest questions, to changes to the EAS system, and of course, the merger between Sirius Satellite Radio Inc., and XM Satellite Radio Holdings Inc.

Martin spoke only generally about the merger, stating that the current rules prohibit both companies from merging, but said that Sirius and XM have provided "interesting proposals" stating their case.

NAB Radio Board Chairman Russ Withers asked about the NAB's concern that the satellite companies are planning to go after local revenue, but Kevin Marin noted that the companies are not prohibited from going after local ads. They just cannot insert local-only ads and material through the local terrestrial repeater network.

"I would be concerned if they were trying to become a local broadcaster," said the FCC Chairman. Martin didn't agree that local material broadcast nationally violates the local prohibition placed on the satellite companies.

[AllAccess]

A FCC filing by Wiley Rein cites a recent Radio & Records article about the merger between Sirius Satellite Radio, Inc. and XM Satellite Radio Holdings, Inc.

But it's not the filing that's interesting. It's not even the R&R article, or the quote by the PTC that Wiley Rein was highlighting.

It's the image you see...

(grrrr...)

[View FCC Filing (PDF) via Orbitcast Forums]
Thanks tankedsecondchance!

XM Satellite Radio chairman Gary Parsons compared th NAB's lobbying efforts to stop the Sirius and XM merger to a "jihad" at the Goldman Sachs conference in New York yesterday.

"They clearly view it as competition and, candidly, they should," Parsons told attendees.

"I've been a bit surprised about the raw magnitude of the dollars they have spent and the somewhat visceral nature of the jihad against the merger going forward," he added.

Parsons wondered why terrestrial radio dismiss satellite radio as having limited appeal while simultaneously spending vast sums of money - through the NAB - to try and stop the satellite radio merger.

Using the term "jihad" to describe the NAB's opposition is strategically brilliant in my opinion, and it's not the first time Gary Parsons has used this term. But it's an effective, and accurate I might add, description of their relentless lobbying - despite NAB members' own SEC filing having cited satellite radio as competition (and these constitute admissions under the law).

In response to Parsons comments, NAB spokesman Kris Jones said, "a monopolist will say and do anything to get their monopoly."

Wait... which group is it that will say anything and do anything again?

[Hollywood Reporter]

Media consultant John Gorman has an absolutely hilarious blog post this morning on David Rehr and the hypocrisy of the NAB's battle against the Sirius-XM merger.

"There were no secrets. XM and Sirius claimed the merger would not be a monopoly since they compete with terrestrial radio, Internet radio, and MP3 players. That’s what they focused on and never deviated from that claim.

In response, the unfocused David Rehr who looks like David Johansen impersonated still another David – David Byrne and danced around the merger issues like Byrne did on the Talking Heads video, 'Once in a Lifetime.'

It’s taken him just two years to go from the NAB’s hopeful hero to a hopeless zero.

Sometimes it is better to remain silent and be thought a fool than to open one’s mouth and remove all doubt.

Rehr had all the charisma of dead fish when he pitched Capitol Hill. And Mel Karmazin was Mel Karmazin. No contest."

Ouch! Read more of Gorman's scathing blog post here... trust me, it's well worth it.

In response to the recent Sirius, XM survey on a la carte programming, the NAB has issued a statement calling the survey "loaded" and provided its own set of survey questions.

NAB Executive VP of Media Relations Dennis Wharton, said

"Sirius and XM conveniently did not ask poll participants the following:

• Do you like monopolies?
• Does competition restrain a monopolist's price-gouging?
• Should government reward two companies that routinely violate FCC rules with a monopoly?
• Did you know you will have to buy a new radio that costs $200 or more to get the alleged benefits of a la carte programming?
• Did you know that Howard Stern and other 'talent' will cost consumers more – not less – under a la carte?
• Did you know that under a la carte, the per-channel price of a merged XM-Sirius will rise by 40 percent to 188 percent?"

Thank goodness we have the NAB to be champions of unbiased public opinion surveys.

[via Radio Online]

XM and Sirius Satellite Radio commissioned a survey among eight hundred registered voters from August 7-9, and found that a majority support the a la carte programming packages offered as a result of the merger.

According to the voter survey:

• 77 percent said that the $6.99 priced "a la carte" offering, where listeners choose the individual channels they want to receive, would be good for consumers. Voters were told that these a la carte offerings would be available on newly equipped radios.
• 72 percent found that a $14.99 a la carte offering, where consumers would select channels from a pool that includes the channels on one service plus popular selections from other, would be good for consumers.
• 70 percent indicated that the fixed "best of both" package, featuring channels on one service plus the most popular channels on the other for $16.99 per month, would be good for consumers.
• 62 percent of voters said the mostly music and separate mostly news, sport and talk packages at $9.99 per month would be good for consumers --almost three times as many who said these packages would be bad for consumers.
• 56 percent of voters said that the family friendly packages at $11.99 and $14.99 that exclude adult-themed programming would be good for consumers.
• 57 percent of voters agreed that the new programming plans demonstrate why this merger is good for consumers and in the public interest.

"These numbers are even more impressive when you consider that recent public opinion studies have shown the American public to be skeptical about the impact mergers will have on consumers and the country," said Robert Autry, partner of Public Opinion Strategies, LLC, the Virginia based research firm that conducted the survey.

One area where you did find skepticism was with the NAB's effort to try to block the satellite radio merger. Nearly six out of ten voters in the survey (58% agree, 31% disagree) agree that AM/FM radio stations are opposing the merger because the combined satellite company will be a stronger competitor to traditional radio.

The survey has a margin of error of plus or minus 3.46 percent.

[View Survey Summary (PDF)]

The proposed merger between Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSRS) may have lost momentum in receiving its necessary regulatory approval, according Bank of America analyst Jonathan Jacoby.

The problem, according to Bank of America's D.C. contacts, lies in Sirius-XM's joint reply comments on changing the "rule" that prevents either satellite radio provider from merging (also known as the regulatory "Achillies heel"). Jacoby wrote in the client note that the D.C. contacts felt Sirius and XM's joint arguments "were somewhat weak," while the NAB's comments argued the merger could "set a precedent that would encourage a wave of media consolidation."

Sirius and XM filed their reply comments for the Notice of Proposed Rulemaking (NPRM) to the FCC late last week. You can read the filing here (PDF).

Bank of America's contacts in D.C. saw Sirius/XM's filing as simply a request to repeal the decade-old rule, and "lacked the substance" that the Federal Communications Commission likely would require.

Meanwhile, the NAB's filing told a different story. They argued that if satellite radio is considered part of a great audio entertainment market, then this would set a precedent, and the FCC should abolish media ownership restrictions as well. If the FCC simply waives the rule, they risk losing - again - on ownership issues at the courts.

You can read the NAB's filing here (PDF).

The potential precedent this merger would set - for both the FCC and the DOJ - could very well be the biggest obstacle for Sirius and XM in trying to get this deal to pass. It's also by far the NAB's best argument yet (and a break away from the consistent "merger to monopoly" line), but playing this card also puts their goals for further media consolidation at risk.