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....

[Washington Times]

The League of United Latin American Citizens (LULAC) has given Clear Channel's WLW an ultimatum: fix the problem with or they will urge members to boycott Clear Channel's top Hispanic markets.

The issue culminates around a promotional spot aired on WLW called "Speaking to An Illegal Alien." The spot featured translations of Spanish phrases like, "Be careful with those hedge clippers around the garden."

In May, WLW infuriated the Hispanic community when it put up billboards featuring a Hispanic man and a donkey, called "The Big Juan" (pictured). The billboards were eventually removed a month later. The league said last week's promotional spots showed them that Clear Channel market manager Chuck Fredrick "reneged on his commitment" made to "prevent future offensive materials" on the station.

"WLW has a track record of offending all minorities. Who's the next target? This is a real problem that needs to be fixed," Riveiro said.

"The spot in question was an old spot that aired in error," Fredrick said later. "It aired twice. We pulled it immediately upon realizing the error and we regret any discomfort that this mistake caused."

Riveiro said Fredrick told him that, too, but "I don't buy it."

Riveiro said if its demands are not met, the group will target Clear Channel's top 10 Hispanic markets by urging listeners to tune out and businesses to pull their ads.

In May, LULAC voiced its support for the Sirius-XM merger, and XM Satellite Radio carries WLW (ch 173) as part of their contract with Clear Channel.

[Cincinnati Enquirer]

XM's resident radio genius, Lee Abrams, has an article in the Huffington Post about the 'musical lull' we are currently in.

At the time of writing this post, Lee's article is on the frontpage of Huffington's Entertainment section.

The article actually is a bit of a reprint from an earlier blog post of Lee's, but one that I think holds an important enough message to deserve a larger venue like the Huffington Post. Lee examines the cyclical nature of music, and how our society tends to drift between "intense periods" and "musical lulls" - and, regrettably, we're currently in a lull.

Right now the moguls (which, I believe, includes both the RIAA and terrestrial radio) are in control, and their formulas are being adhered to. Eventually, we'll break out of the lull and once again return to a period where music is thought provoking and inspirational. When the music defines a generation.

Well worth the read, and the thought.

[Huffington Post]

A federal judge yesterday gave the thumbs for Whole Foods to buy rival Wild Oats - rejecting the FTC's argument that the deal would stifle competition and lead to higher prices.

Whole Foods operates 177 stores in the U.S., while Wild Oats has about 110. Both are relatively small players in the grocery business, but FTC lawyers argued the combined company would corner the market on premium and organic foods. But U.S. District Judge Paul L. Friedman felt otherwise and his reasoning is detailed in a 93-page court document that is sealed because it contains corporate secrets.

What does this have to do with satellite radio?

Many have felt that there are parallels between the Whole Foods-Wild Oats merger and the Sirius-XM merger. Antitrust authorities in both cases need to decide whether the relevant market is a narrow one, or part of a larger, more broadly defined market.

Of course that's where the similarities end, largely because they are being reviewed by entirely different federal agencies. But with Whole Foods-Wild Oats decision is being closely followed by analysts and industry watchers, to the point that an overflow room in court was required for those eager to learn details about the companies.

And this development adds a new twist to it all.

[AP]
Thanks Daniel!

CNN.com is conducting a survey soliciting your thoughts on satellite radio and the merger.

They specifically want to know whether you're satisfied with the choices in regular terrestrial radio, and - if you listen to satellite radio - what you think is good/bad about it. Of course, CNN also wants to know your opinion on the merger of Sirius and XM.

"And who do you agree with -- the satellite companies or the traditional radio companies?"

To participate, all you need to do is follow this link, and fill out the form. If you want to upload a photo and/or video (I'm submitting this one), you can do that as well.

I think that the biggest fans and most knowledgeable listeners of "radio" are each and everyone of you - so it's really important to have our voices be heard. If you have a few minutes, please take the time and let CNN know what you think (regardless of what side of the merger fence you're on).

We've collectively made a difference before, and we can do it again.

[CNN I-Report]

In an article featured in this week's Wired Listening Post, writer Eliot Van Buskirk lays down claims that SoundExchange has been "caught lobbying." He alleges that SoundExchange is not authorized to fund musicFIRST, which is currently at war on Capitol Hill with terrestrial radio over performance royalties.

In essence, Wired is accusing that SoundExchange of acting illegally... or "apparently" acting illegally. Because section Section 114(g)(3) of the Copyright Act limits how the nonprofit can spend the money it collects. Eliot Van Buskirk feels that SoundExchange has violated this section of the law, and that "SoundExchange should immediately sever its ties to musicFirst and any other lobbying group it funds or assists, and fulfill its role as a neutral administrator of fees."

The problem? Wired doesn't have the facts straight. And I need to call them out on this.

First, some background.
Let me preface this by saying that I don't like SoundExchange. SoundExchange was founded by the RIAA to handle the performance royalty side of the business. And the long-arm of the RIAA rubs me the wrong way on many different levels. I feel the music industry has used legislation, as opposed to innovation, to further its cause in light of a rapidly changing digital music revolution. So in general practice, I'm skeptical of everything coming from the music industry.

That said, I'm also in favor of performance artists getting paid. The artists who physically make the music we hear on the radio (be it terrestrial, satellite or internet) should be compensated - fairly - for that airplay. By "fairly" I don't mean the ridiculous rates that SoundExchange is currently asking for (from both internet and satellite radio). But I also don't think there should be a differentiator between analog and digital radio. The delivery method should hold no bearing on royalty compensation. Period.

Bottom line: I'm in favor of leveling the playing field. Whether I personally like the music industry makes no difference - all forms of radio should be treated equal. And it's my personal opinion that if terrestrial radio was treated on equal ground as other forms of radio, then the burden on internet radio and satellite radio wouldn't be so high.

So that's my opinion, now let's get to the facts, shall we?

SoundExchange is 501c(6) non-profit trade association that's authorized to advocate on behalf of its members for a common business interest. By definition (and by law) that's what a 501c(6) organization does.

Here's how it works:
SoundExchange sends royalty checks to all artists (members and non-members) whose songs have been played. Period. If an artist is a SoundExchange member, a portion of their royalties can be allocated to programs the organization believes in (such as musicFIRST). These members don't determine how these funds are used - that's why they have an executive board - and the SoundExchange board makes this decision. If you've ever been part of an organization, you know that the board makes decisions based on the interests of the organization and its members. Usually by a vote.

And the SoundExchange board unanimously approved the funding and participation in the musicFIRST Coalition. So, if musicFIRST is successful and the performance royalties for terrestrial radio are granted, this will obviously benefit SoundExchange's members. It all goes back to that "advocating for its members" concept.

Now I'm no lawyer, so for the legal terminology, here's what Michael Huppe of SoundExchange's general counsel had to say about everything:

"Like most performing rights organizations, SoundExchange operates as a 501(c)(6) membership organization to benefit its members and their interests. In that capacity it advocates on behalf of and offers services to its members as directed by its board. In supporting musicFIRST, SoundExchange is operating in this capacity and only utilizes member funds after approval of the board. It does not use non-member funds for this purpose."

(You lawyers reading this will enjoy the next section.)

"As the collective responsible for receiving royalties under section 114 of the Copyright Act, SoundExchange collects and distributes royalties for all artists and labels regardless of whether they are members of SoundExchange. When operating in that capacity, SoundExchange is guided by 114(g)(3), which lists what deductions may be taken for costs. In such cases, administrative costs may be covered by royalties to all payees (members and non-members alike)."

Wait. Now read that bolded sentence over again. The money that the SoundExchange Board is authorized to use for musicFIRST comes only from member royalties, not royalties collected from non-members.

The Wired article seemingly ignores this fact, even though Michael Huppe even provided this info in the article itself.

What the Wired article does do, is seek the advice of other legal experts. But... those legal experts don't make any definite conclusions:

"Jessica Litman, a law professor at the University of Michigan, could not point to any legal grounds for SoundExchange's move, saying, 'I'm not aware of any statute that authorizes the contribution.'"

That does not mean the legal grounds aren't there or don't exist just because she could not point to them. They’re actually very clear: the incorporation of SoundExchange as a 501c(6) gives it the authority to advocate for its members.

"Shoshana Zisk, a music attorney in San Francisco, said, 'Upon reading Copyright Act Section 114(g)(3), it would appear that funding a lobbying or PR organization (such as musicFIRST) is a violation of this provision.'"

Now this looks to be Wired strongest argument. But, Zisk doesn't distinguish between funding based on authority granted by 114(g)(3) of the statute, which applies to all domestic royalties collected by SoundExchange. Again, the funding is authorized by members of SoundExchange, not all the copyright owners and performers who SoundExchange pays. This may sound like legalese, but there's actually a very distinct difference between them.

Members, and only members, paid for musicFIRST.

Understanding this, Wired's accusations fall flat on their face. Not surprising, considering that the article was all based on what "a source familiar with SoundExchange told [Eliot Van Buskirk] on condition of anonymity".

Many organizations, especially a 501c(6), use different operating funds for operations and for advocacy. In accordance with the law, the SoundExchange board only approved the funding to support the artists and copyright owners that they represent. That's all.

More importantly none of this spewing of misinformation does a bit to help anyone. Not listeners. Not musicians. Not even Wired. It only leads to benefit organizations - like the NAB - who oppose the thought that musicians should be paid when they get airplay.

The real issue at hand is that we're supporting 70-year old rules that give terrestrial radio a free ride. And we're one of the only countries in the world that do this (along with Iran, China, Rwanda, and North Korea).

Terrestrial radio is an industry that pulls in profits that nearly double what the music industry makes. These aren't small 'mom and pop' stations, but huge media conglomerates. There is absolutely no reason why Internet Radio and Satellite Radio should foot the bill, while terrestrial sits idly by enjoying an obscene government-sanctioned profit margin.

[Read the original Wired article]

It's sad that the New York Post is actually giving any attention to the NAB's "analysis" - and subsequent name-calling - of Sirius-XM's proposed A La Carte pricing.

Then again, Peter Lauria does leave subtle drops about the NAB's "increasingly vitriolic quest" to block the merger, as well as their critique of A La Carte "coincides, somewhat inopportunely," with the words of praise from the FCC Chairman.

And I'm glad he picked up on this bit: "...while Sirius and XM have been open about the equipment upgrades needed for a la carte, the NAB does not mention that terrestrial broadcasting's push into high-definition radio also will require a hardware upgrade."

In other words, "do as I say, not as I do."

[New York Post]

Sirius Satellite Radio's CEO Mel Karmazin has recently appeared in a CNBC advertising campaign which features testimonials from various business leaders.

For the satellite radio fanatic, the neat thing is to see the level of brand exposure given to Sirius in the ad spot. If you didn't watch the end of the commercial, you'd think it was a commercial for Sirius - not a CNBC. In fact, most of the shots featured in the ad spot are all from within Sirius' headquarters.

Investors will enjoy the "your report card is your stock price" line as well.

[Watch Video via New York Times]