Harold W. Furchtgott-Roth, a prominent economist and the former Commissioner of the FCC, released a study today exploring the economic considerations that government agencies should take into account when reviewing the proposed XM-Sirius merger.

The paper, "An Economic Review of the Proposed Merger of XM and Sirius," was prepared for XM and Sirius and was filed yesterday to the FCC as part of the companies' merger application.

Furchtgott-Roth, founded Furchtgott-Roth Economic Enterprises in 2003 and frequently consults on issues related to the communications sector of the economy. From 1997 through 2001, Furchtgott-Roth served as a commissioner of the FCC and he is one of the few economists to have served as a federal regulatory commissioner and the only one to have served on the Commission.

"After studying various economic factors and potential changes in competing communications services, I conclude that American consumers have a wide and rapidly expanding range of choices for communications services that compete with XM and Sirius," said Furchtgott-Roth. "Additionally, these competitive choices discipline the prices that XM and Sirius charge subscribers today and will continue to do so regardless of whether the firms merge.

"I believe that government agencies should afford these companies the flexibility to respond to rapidly changing market conditions."

[Read the full Furchtgott-Roth Report (PDF)]

...or check out the key findings from the report after the jump. 

In a recent email sent to its members, the NAB has conceded that supporters of the XM/Sirius merger "are winning the war of words at the FCC."

Citing Siriusbuzz's FCC Comment Scorecard, the NAB asked their members to not let their members "win the war of words" and to "submit comments to the FCC opposing the merger!"

The NAB even said they are "working hard to derail the merger" but even so, they asked members to "enlist station personnel, friends and family" to aid their cause.

As of June 22nd, nearly 2,600 comments have been filed to the FCC regarding the Sirius-XM merger, and over 2,000 are in favor of it.

If you would like to submit your comments to the FCC, you can do so through the easy to use forms located on both XMmerger.com and SIRIUSmerger.com. They are definitely far easier to use than the FCC's own form.

The FCC has issued a Notice of Proposed Rule Making, which invites comments about whether the "rule" that prohibits XM and Sirius from merging should be waived, modified, or repealed.

In the Commission's 1997 Order, there is language that specifically prohibits one SDARS license holder from owning the other. Sirius and XM have said that the prohibition is a policy statement - and not an actual rule - because it was not codified in the Code of Federal Regulations.

The Notice of Proposed Rule Making opens this issue up for debate. Comments are due 30 days after publication in the Federal Register, with reply comments due 45 days after.

In a joint statement, Sirius and XM said:

"The companies are pleased that the FCC has outlined the full process for reviewing the SIRIUS-XM merger. This action puts all of the FCC decisions regarding approval of the merger on track. We remain confident that the merger is in the public interest, and continue to look forward to completing the regulatory approvals by year end."

Read the full Notice of Proposed Rule Making (PDF).

The League of Rural Voters has released an analysis comparing the 2002 EchoStar/DirecTV merger attempt, and the proposed Sirius/XM merger.

The report argues that in the EchoStar/DirecTV case, the FCC determined that there were at most only two DBS providers. Opponents of the Sirius/XM merger (like the NAB) have tried to describe it in the same terms. But the LRV study thinks otherwise.

"Satellite radio is often the best source for music, news and talk in rural areas," said LRV Executive Director Niel Ritchie. "However, it is far from the only choice. Sirius and XM are two small pieces in a very broad market. Rural consumers have an array of audio entertainment choices today and will continue to do so after the Sirius-XM merger."

The analysis, "Sirius/XM vs. EchoStar/DirecTV: A Fundamentally Different Merger for Rural Consumers," was filed recently in support of the companies' application with the FCC.

Here's what they found:

Distinct Market Definitions
The paper cites the 2002 FCC analysis of the EchoStar/DirecTV market, which specifically defined each local market as the two DBS providers and the local cable monopoly. This is in contrast to the "broad and competitive audio entertainment market in which satellite radio competes," that the LRV study found, a market that they consider to include terrestrial radio, Internet radio, iPods and other MP3 players, CD players and mobile phones.

The FCC also found there were significant barriers to entry in the DBS merger. This concern is moot in the satellite radio market, given the multitude of other competitors that have already entered the field and the anticipated release of future competitors such as HD radio and the Apple iPhone.


Different Impacts on Rural Consumers
The finding on the DBS product market gave rise to a number of concerns, including the reduction of viewpoint diversity and the creation of a monopoly in areas where there was no cable. "The FCC found that DBS operators contribute to viewpoint diversity by playing a 'gatekeeper role' that 'clearly affects' which entertainment and news programming is available," the paper says. "The audio entertainment market does not present the same concern, since it includes many different providers/editors."

Additionally, LRV's analysis concludes that the FCC's concerns in the EchoStar/DirecTV case do not apply to satellite radio because of its small saturation in a rapidly growing market, noting "...unlike the DBS merger reviewed by the FCC five years ago, the proposed merger between XM and Sirius comes at a time of strong and growing competition... In fact, in contrast to the DBS context, even a merged satellite radio provider would possess a slight market share and be constrained by the multiplicity of other media."

If you want to read the full report by the League of Rural Voters, check it out here (PDF).

There's a new study out about the Sirius-XM merger by Thomas Hazlett. Hazlett is the former Chief Economist of the FCC, Professor of Law & Economics at George Mason University, and a principal in Arlington Economics.

The paper, "The Economics of the Satellite Radio Merger," which was prepared for Sirius-XM and sent into the FCC today, looks at the financial and strategic aspects of the Sirius-XM merger. It concludied that the merger has the potential to yield substantial efficiencies, and as a result, benefits consumers and enhance competition.

 Click to read the full paper (PDF)

Hazlett isn't new to writing about the satellite radio world. This article, from 2004 when XM launched its traffic/weather channels, shows his especially deep knowledge of the subject (it's about the ridiculous "localism" argument that the NAB is touting - well worth the read if you have the time).

On the Sirius-XM merger, Professor Hazlett said, "After a thorough analysis, it is my opinion that the merger of XM and SIRIUS will predictably enhance consumer welfare. The National Association of Broadcasters' (NAB) staunch opposition to the merger illustrates their similar expectation. The improved economic vitality of a combined satellite radio company would drive industry innovation, promote competition and enhance programming and pricing options for customers."

So understand that whether you're for or against the merger, this study comes from someone who really knows what he's talking about. My searches haven't found anything where he's contradicting his views here. Hazlett focuses primarily on the economics of the deal (he is, afterall, the FCC's former Chief Economist) and he might just answer the question of "how can a merger open up diversity?" that many are asking.

Follow the jump to read key findings of the study...

Both Sirius Satellite Radio (SIRI) and XM Satellite Radio (XMSR) have launched individual websites that discuss the proposed Sirius-XM merger, as well as give users the ability to take action through various means.

SIRIUSmerger.com and XMmerger.com both allow users to easily contact the FCC to voice their opinion (in a far easier way than going direct to the FCC), spread the word about the merger related websites, and you can also contact them directly to voice your opinion about what you think on the merger.

Sirius' version features audio from CEO Mel Karmazin talking about the merger, while XM's version features Chairman Gary Parsons doing the same.

I especially like the "What people are saying" section that shows notable quotes from from various folks in Congress as well as from the many groups that support the merger.

(Side note, both websites also link to Orbitcast off the homepage. Effectively bringing a huge smile to my face this morning.)

The launch of both websites coincides with advertisements published today in Communications Daily, The Hill, The Politico and Roll Call, highlighting the growing list of organizations voicing their support for the XM-Sirius merger. Read the text of the ad after the jump...

I've setup a "dogear" link throughout Orbitcast to give people an easy way to get to the FCC's electronic comment filing system. You'll see it in the upper-right corner (a screenshot is on the right for RSS/Email readers).

Just click, and enter in the number "07-57" under the "proceeding" area. Comments are due July 9th. 

Whether you're for, or against, the merger - you have the right to submit public comments to the FCC. Regardless on what my take on the merger is, I strongly believe in your right to voice your opinion.

Yes, the DOJ also plays a very significant part in this process, but this is a chance where you can actually - truly - be heard by government officials.

Now is the time to have your voice be heard.

[FCC ECFC Comment Form] 

After what seemed to be an eternity to me, the newly redesigned Orbitcast was launched over the weekend. There's a ton of new features, so here's a summary of what's new (RSS/Email readers should click through for the full effect):

Snap Shots

You'll notice now on any external link within a post, a little "chat bubble" icon next to that link. If you mouse-over that chat bubble, you now can access several features without ever having to leave the site.

For instance, any links to a Wikipedia entry (such as this one) will show the Wikipedia article directly within that window. A link to a stock page (like, oh say, SIRI or XMSR) brings the stock quote embedded within the popup window. Even links to YouTube videos, like this one or this one, show the video directly within the page.

Sphere It

In the bottom of every post, you'll see a "Sphere It" link that brings up an embedded window with related articles to that post. It's an easy way for you to see what other blogs or major media outlets are saying about similar subject matter. And it happens all automagically right within the page.

MyBlogLog Community

You'll notice on the right-hand side a list of recent readers, powered by MyBlogLog. If you have a MyBlogLog profile setup, you'll show up there as well. It's a fun way to connect with fellow Orbitcast readers, and you can also join MyBlogLog's Orbitcast Community and find others that have the same passion.

Orbitcast Polls

Also on the right-hand side, you'll notice a poll has been setup (right now it's asking about the redesign... which I hope you like!). I'll be keeping that poll updated on a constant basis, so keep checking it out.

Featured Posts

For the readers who don't check the site everyday, keeping up-to-date with key developments can sometimes be a challenge. So I've added a "Featured Posts" section - also on the right. The Top 5 featured posts will be displayed there for easy access.

New Design: Cleaner, Stronger, and more Girth!

Orbitcast has gotten wider so now more stuff can be seen on page. I've removed many of extraneous items from the pages. And there's now a new spacey theme and logo. But... you probably already noticed that.

So what's your thoughts on the redesign? Officially it's the 5th version of the site, and I'm constantly tinkering and refining to make things as nice as possible around here. (And yes, there's still some glitches being worked out.)

Sound off in the comments and let me know what you think.

The Federal Communications Commission has announced the public comment period for the Sirius-XM merger application has started. Comments/petitions are due July 9th, 2007 and responses/oppositions are due July 24th.

The clock has started. 

Sirius and XM have issued the following joint statement regarding the announcement:

"The FCC public comment period is an important step in the regulatory review of our merger and brings us closer to its completion.  The combination of our companies will lead to more choices and better pricing for consumers, and result in a stronger competitor in the rapidly evolving audio entertainment market.  These benefits explain why the merger already has received the strong support of a wide array of minority, consumer, women's and rural organizations.  We are confident that the comments filed with the FCC in the weeks ahead will continue to reflect these significant public interest benefits.

"We look forward to working with the Commission to demonstrate that this merger is in the public interest, will have no anti-competitive effects on the market and to making any appropriate changes in its 1997 licensing order."

[View FCC Announcement (PDF)]

Oh yes. Orbitcast is riding the Twitter bandwagon now. If you happen to be on Twitter, or maybe you're just curious about the all the hooplah, g'head and check out the official Orbitcast Twitter stream (OrbitTweets?).

But wait, what the hell do you get?

• Never miss a thing: For those who just can't get enough Orbitcast news, I'm now syndicating Orbitcast posts straight to the Twitter stream. (You can also try subscribing to the RSS feed, or get email updates)
  
• Anywhere, anytime: That means you can be notified via IM, or by SMS text message (or... just on Twitter) when a new post has been made. If you're on-the-go a lot and can't miss a thing, this is your dream come true (admit it, it is).
  
• Post overflow: Interesting, semi-related tidbits that I discover while researching the next post. Now they have a place to shine rather than disappearing forever.
  
• Personal updates: Sometimes, it's just personal stuff.

We'll learn as we go along about what works and what doesn't, but just consider it like the ADHD Edition of Orbitcast. More than anything, it's yet another way to get your fix.

Oh, and I'll be your friend.

(psst... this is only the beginning)