Remember that resolution against the XM-Sirius merger that was passed in Alabama? Well it seems that several keen-eyed commenters have noticed that the chief sponsor of the resolution actually owns a terrestrial radio station as well as a production company.

Mike Hubbard, Alabama's House Minority Leader and the chief sponsor of a resolution against the Sirius-XM merger (HJR144) cites his own possible conflict of interest in his official bio:

"Hubbard’s company, Auburn Network, Inc., owns and operates WANI NewsTalk 1400, a commercial radio station in the Auburn/Opelika market as well as Studio 197, an audio production company serving the national broadcast industry..."

In his legislative bio, we also learn that Hubbard is a member of the Alabama Broadcasters Association which identifies itself as a trade association representing radio and televisions stations. The ABA itself has officially denounced the XM-Sirius merger, obviously using the strength of its 287 members (particularly one certain House Minority Leader) to push forward their agenda.

Conflict of interest? Nah, it's for the good of the people! 

[via The Port Chronicle]

Corporate Crime Reporter has revealed that C3SR - the consumer group that was created to oppose the merger between XM and Sirius - is in fact supported by the NAB.

Separately... and perhaps more importantly... in the recent Criterion Economics Study about the XM-Sirius merger there's a footnote  (on page 3) stating:
"The Consumer Coalition for Competition in Satellite Radio is a consumer group consisting of Sirius and XM subscribers. It is supported by the National Association of Broadcasters."

Consumer Coalition For Competition In Satellite Radio (C3SR) founding member Chris Reale actually works full time at Williams Mullen Strategies - the lobbying arm of the Williams Mullen law firm - whose communications practice is headed by Julian Shepard, who just happens to be a former assistant general counsel at the NAB.

When Corporate Crime Reporter confronted Reale about who is funding C3SR, he wouldn't say, but did admit that the NAB "supports" the group. Reale refuses to identify the nature of NAB’s support.

"If we were out there in the media telling people who funded us, it would detract from support from different groups," Reale said. "I didn’t think that was a wise course."

Read more on Corporate Crime Reporter.

Read the Criterion Study (PDF) ...and be sure to specifically check Page 3, Footnote 3.

UPDATE: Add some salt to the wound, a commenter has pointed out that C3SR even links to an NAB study in a blog post. I don't mind anyone opposing the merger, but aligning yourself with the NAB doesn't help your case.

The Alabama House of Representatives has unanimously passed a resolution opposing the proposed XM and Sirius merger.

House Joint Resolution 144 was introduced last Tuesday, March 20th, and will now go to the Alabama Senate.

The resolution stated "that the Attorney General of the United States and the Federal Communications Commission are encouraged to disapprove the proposed merger between the only two national satellite radio companies."

The resolution also says: "that the merger will result in consumers, musicians, and other entertainers being subject to a single company with unlimited market power to impose anti-competitive terms, conditions, and prices;" "the combination of these two satellite radio companies will potentially restrict programming, reduce diversity, and diminish creativity; each result negatively impacting the public interest;" and "unquestionably, a government sanctioned monopoly is harmful to consumers and the public and should be avoided and denied."

In a statement, the NAB said that "It is our hope that similar resolutions will be introduced in other states."

[FMQB] 

UPDATE: XM Satellite Radio has issued a statement about the Alabama resolution:

"The NAB’s unprecedented campaign against the merger demonstrates that AM and FM broadcasters vigorously compete with satellite radio. The more the NAB does to oppose the merger, the more it weakens their credibility."

Directed Electronics has a lucrative distribution agreement with Sirius, but renewing that agreement may be difficult when the contract expires if the proposed XM-Sirius merger passes.

Under the agreement with Sirius, Directed distributes Sirius receivers, tuners and other accessories - comprising over 90 percent of Sirius' aftermarket volume. The deal between Directed and Sirius is set to expire in April 2008.

On Wednesday, RBC Capital Markets analyst Scot Ciccarelli cautioned that Sirius' issues may weigh on Directed's share potential.

"We were already concerned about the pending expiration of Directed's contract with Sirius given our expectation for a more difficult negotiation, but the pending merger of the two satellite operators has magnified our concerns," wrote Ciccarelli in a client note.

"XM and Sirius will push hard to get this deal done and maximize cost synergies without significantly raising their monthly fees (a possible requirement for regulatory passage) which will likely squeeze their respective business partners – including Directed, in our view."

Ciccarelli said there are also worries about changing market conditions and the satellite radio model begins to move from a retail to an OEM driven model.

Directed has already warned that's its Sirius sales could be slowing, with sales of its satellite radio products expected to decline between 11% and 22% in 2007. The company acknowledged that retailers were left with 30 to 90 days of excess inventory of Sirius products, depending on the dealer, at the end of last year. But dealers are now supposedly working through that inventory and some are beginning to reorder in larger quantities.

[Forbes] 

Bridge Ratings has continued their study about the impact of the XM-Sirius merger on consumer interest. It's probably going to be an ongoing study because, well, it's great media bait (hell, I'm talking about it).

 

 

As with an earlier study released back in February, Bridge has found that a majority of potential subscribers (people who expressed an interest in subscribing to either one or both satellite radio providers) would rather hold out until the merger goes through before making the jump.

That majority who will wait to see if the merger passes before signing up equals 58 percent even - that's up from the 55 percent of respondents last month. A lower number of people said they'll subscribe within 60 days anyway (19% this month versus the 24% last month).

This trending says to me that XM-Sirius need to do a better job selling their current service to customers and at the same time selling the possible future service to regulators (a hard feat since media interest centers around the merger).

 

 

An additional aspect of Bridge's study is the interest in Howard Stern by current XM Satellite Radio subscribers (again, media bait.). The thing that confuses me is that the results are absolutely unchanged from the previous report. Bridge doesn't indicate a timeframe for when they polled the 1,000 XM subs, so it's hard to say for sure (I would assume it's a different set of respondents?). Either way, a whopping 88% of XM subscribers seem to care less about the ability to listen to Stern, which might explain why they subscribe to XM and not Sirius.

Read the full report on Bridge Ratings. 

In a post XM-Sirius merger scenario, would the red headed stepchild of satellite radio - WorldSpace - step in and start covering the U.S. market? Maybe so, if the FCC required the newly merged company to relinquish one of its SDARS licenses.

"We would love to look into that if that’s available," Worldspace Chief Executive Officer Noah Samara said on Monday. "We’ve always felt seamless global coverage is something the planet needs."

WorldSpace, of course, isn't banking much on this hypothetical. A heck of a lot needs to happen before broadcasting in North America becomes a reality. But it's an interesting possible side-effect if XM and Sirius are successful in merging. (Though, something tells me they rather have that second license even post-merger since using the combined spectrum is sort of the whole reason behind merging.)

[Examiner]
Thanks Rob!

David Rehr, President/CEO of the fan-favorite NAB, did his best to position terrestrial radio as struggling local broadcasters fighting the good fight in his Congressional testimony. But yet in his recent letter to the FCC, Rehr talks about how a merged satellite radio threatens national radio.

February 28, 2007 - Written testimony (PDF) in front of the House of Representatives Committee on the Judiciary Antitrust Task Force:

"...media industry observers have agreed that '[s]atellite radio is a national platform,' thereby clearly differing from locally-licensed and locally-oriented terrestrial broadcast stations."

March 22, 2007 - David Rehr's Letter (PDF) to FCC Chairman Kevin Martin:

"A satellite radio monopoly will also thwart program access by other media, especially regional and national radio networks."

So which is it? Local or National? Hopefully someone else is picking up on these inconsistencies.
Thanks Tim! 

FCC Chairman Kevin Martin and the Parents Television Council (PTC) both had words of praise over allowing satellite radio subscribers the ability to block adult-oriented channels - and to subsequently give a rebate for those blocked channels.

It's a plan that was outlined by Sirius CEO Mel Karmazin last week, as well as in Sirius and XM's official merger filing. If a subscriber wishes to block a channel (like the ever-objectionable Martha Stewart Living Radio channel), the merged Sirius-XM would give a rebate back for that channel's value.

Karmazin called it a more "à la carte" approach - a plan that both the FCC's Kevin Martin and the PTC seemed to approve of.

Martin said Karmazin's proposal "sounded, in general, like a good idea," although he has yet to fully study it. "One of the options I have encouraged," he said, "is allowing parents to block channels and also [have] the companies reimburse the price they are charging consumers for content they don't want. I think that a block and reimburse mechanism may be a good idea."

Parents Television Council Government Affairs Director Dan Isett called it "a significant step in the right direction. You finally have a major media outlet recognizing the reality about some of these subscription-based platforms."

The PTC has long been a vocal anti-indecency group (making up for a very large number of the FCC indecency complaints) and consists of over a 1,000,000 members.

[Broadcasting & Cable]

NAB President/CEO David Rehr opened up his heart and wrote in a 4-page letter to the FCC Chairman that the "two satellite radio providers has served consumers well."

Sadly the love-fest ends there (just as I was getting warmed up to Mr. Rehr), as he goes on to state - once again - that the XM-Sirius merger "violates the antitrust laws and established FCC rules." Rehr also used his favorite line saying that approving the merger would create "a government-sanctioned monopoly," etc etc etc.

Sound repetitive? You betcha, David Rehr even uses the word "monopoly" a dozen times (not including the one time he used the word "monopolistic").

But I just want to ignore all that, throw away all these hateful feelings and focus in on these kind words:

"Each [satellite radio] provider has differentiated itself with unique programming and equipment offerings."

Aw shucks Dave, that's so sweet!

[FMQB and Radio Online] 

Both Sirius and XM Satellite Radio have issued the following statement on the FCC giving their blessing to HD Radio, and essentially adopting new rules for digital audio broadcasting:

"The FCC decision underlines that HD radio on the AM/FM bands provide a real alternative to satellite, and that the current audio entertainment market is broad, robust and competitive. The decision will raise competition to a new level by stimulating the growth in HD radio stations (now 1200), enhancing its offerings to consumers and establishing a process for free radio to offer a paid subscription service for the first time."

It's good to see XM-Sirius working the public relations front with this. It's a weird spot that both PR depts are put in, now that they're charged with the responsibility to actually bring attention to the competition (a faux pas in the PR/Marketing world).

[Press Release]