Clear Channel continues anti-merger blitz

Wednesday, February 6, 2008 at 9:43 PM
Tags: 2, XM

Clear Channel

Clear Channel, now satisfied with their own merger approval, have been increasingly active in their discussions with the FCC regarding the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

In fact, in the past six months, Clear Channel has actually met with the Commission discussing the Sirius-XM merger exactly 17 times as of writing this. But it's their most recent filing that has given us the clearest glimpse into what these discussions have been about.

The company says that, regardless of how the market is defined, the FCC shouldn't grant approval to the Sirius-XM merger.

"Permitting one company to control so much spectrum would inevitably undermine the viability of free, over-the-air, advertiser-supported radio’s economic model, harming localism and diversity, the pillars of the public interest under the Communications Act of 1934, as amended," writes Clear Channel.

They go on to describe various scenarios. In short:

  • Under the current "national pay radio" market definition - the merger should be denied
  • If the market is defined as "all radio services" - then it would give Sirius-XM too much spectrum and "undermine" the ability of terrestrial to serve the public
  • And if it's defined as the "audio entertainment" market - this would put "intense competitive pressure" on terrestrial radio because everyone else (satellite radio, iPods, internet radio, etc) are unregulated
  • "HD radio is not a meaningful threat to satellite radio – not now and likely not for some time..." (the quote says it all)

Should the FCC actually approve the merger, Clear Channel asks that the full 25 MHz of spectrum is "simply too much market power." Their solution? Chop that down to 15 MHz and the remainder would be "divested in some fashion."

Cutting the amount of spectrum wouldn't be enough though. They also would like the government to require that Sirius and XM "embed HD radio reception capability into all satellite radio receivers" - much like what iBiquity and the HD Radio Alliance have been asking for.

[FCC Filing (PDF)]

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Comments

I really don't see how Sirius or XM will agree to merge unless they get the full spectrum. We'll see though I guess.

"we cant compete with sat radio as it would costs us billions(in losses) like it has already for sat radio so just give us the business for free"

thats competition that benefits the public?

Satellite radio execs would be out of their minds were they to accede to these extortionate demands from BigRadio's premier spoiled brats.

Aren't these brigands the same ones who tried and failed to shove unnecessary, destructive, jamming system HD radio down listeners' throats?

CC and its BigRadio cronies stayed too long at the fair. They should never have been allowed in. The Carny's where they belong. The carny's where they'll find their homegrown East Bloc jammer and 'carny shill' HD Radio.

Satellite approving this latest blowziness from Clear Channel & cronies would be like convenience store clerks handing free boxes of scratch tickets to crackheads.

The tragedy is that, were BigRadio half as audacious and creative in its programming as it is with its public arm-twisting, it would have high ratings and no need of HD to jam its competitors.


Paul Vincent Zecchino
Manasota Key, Florida
06 February, 2008

Now that it looks like Romney will not make the Whitehouse, Bain Capital is taking last gasps of political pull against the merger.

Why should HD radio get something for free? Amazing.

The deals that both satellite radio broadcasters are one of the major reasons that they are bleeding red ink all over the financial statements. Each company has exclusive deals with certain manufacturers that ensure that each companies' hardware gets installed. Sirius has that arrangement with Ford, Chrysler, Mercedes, BMW, Audi, VW and their respective divisions. XM has that arrangement with GM, Nissan, Honda, Toyota, Porsche and their respective divisions, except in the case of Hyundai which controls Kia which has its own deal with Sirius.

It has been reported that Sirius and XM are obligated to make regular payments to each car manufacturer for each radio installed and then pay an ongoing royalty or incentive payment for every radio that activates and stays activated. Can you imagine what the payments must be like for XM or for Sirius?

Imagine if the terrestrial radio companies pushing HD paid that kind of money to the manufacturers. I would be willing to bet 'Mad Money" that HD radio would be getting major install deals too.

The deals that terrestrial radio is envious about aren't that financially spectacular. In fact, they are just down right insane. The easiest analogy is the one when everyone is so jealous because the geek got the hottest girl to go out with him, only to find out that he paid her $1,000 to do that. Their envy would probably disappear quickly and they'd be rolling on the floor laughing.

The reality is that the satellite radio cos. needed the car companies and knew that it would cost them dearly to play in their sandbox. But they needed to play in that sandbox in order to survive.

That's the deal that the satellite radio companies have made with the car companies. Is it any wonder that they're getting serious installs.

What has always confounded me, though, is why the so called analysts that track and follow these cos. never question the wisdom of the payments these two are obligated to make. The numbers are in the publicly reported forms - unfortunately they are buried in other items that have to be peeled away. In many ways getting a true picture of these cos.' true financial picture is like peeling back the layers of an artichoke. Sorry for the bad analogy. At the end, in the case of these two cos., there is never any fruit, just more losses.

These are not cos. to invest in. Managements at both houses are lining their own pockets and destroying that which was entrusted to them.

My guess is that there will be a major negative financial announcement from one or both companies in the very near term. On that thought, and speaking of losses and negative financial announcements, ask yourselves why neither company has set a date for their so called "earnings call"? After all, we are in February.

Man don't they know that time for comments and concerns was like 8 months ago and time for a decision was 4 months ago. People will not stop bitching and crying about how unfair this merger is until the nutless bought out fags at the doj give their decision.

Is that Rev Jesse and the Georgetowns hiding behind the rocks?

I am sure anything less than full bandwith and the deal is off.
It works two ways sat radio in every HD radio and HD subsidizes those radios just like sat radio does.

Satellite Radio should be given 20% of all ipods!!!! Demand it!!!

Comments like yours really show what an emotional rather than analytic approach you've taken. What makes you think that being called "nutless" will make them come your way?

I guess "FREE" radio should be entitled to FREE bandwidth and FREE handouts with no expenditure--Oh wait... me bad...They do pay...the politicians, PACS and other special interests so that their needs are taken care of--not the publics---Why does the politicians have such a low approval rating again? VOTE all the more then 2 termers out in Washington--New blood needed

This is funny.
If you look at the spectrum of the radio stations that ClearChannel has under its wings you get a huge player against satellite radio.
They are the ones that they need to be requlated based on their logic.

ALSO ALL iPODS SHOULD INCLUDE SAT-RADIO.

FCC: MORE COMPETITIVE PRESSURE ON TERESTRIAL RADIO WILL FORSE THEM TO IMPROVE. THIS IS THE BENEFIT OF COMPETITION FOR THE PUBLIC.

Granted, Clear Channel is not the best company to be arguing for a level playing field. On the other hand, it would be unprecedented for the FCC to let one company control all the spectrum that its allocated for a particular service, so pushing a merger condition that forces XM/Sirius to return half or some other portion of their spectrum is probably Clear Channel's best argument. Personally, I think that the companies will still go forward with the merger even if they have to return some spectrum because they'll still get all the merger benefits they've been advertising, like savings in marketing, administrative, maintaining satellites, and cancelling duplicate programming. The only drawback is that they may not have enough spectrum left over for mobile video or whatever they're planning to use their excess spectrum for. If this is how the FCC is looking at it, then the FCC may decide that making it possible for a new competitor to get into the sat rad business is more important thant whatever non-satellite radio stuff a combined XM/Sirius might like to try.

If the market is defined as "all radio services" - then it would give Sirius-XM too much spectrum and "undermine" the ability of terrestrial to serve the public
--------------------------------------------------------------------------------------------------------------
Too much spectrum and yet the combined companies only have 5% of the market.

Great argument!!

I'm confused - when we're listening to audio in our cars, do we care how the market is defined? That is what's so hilarious about that filing - based on how they define the market, it somehow changes how much pressure terrestrial radio faces?

People are going to listen to whatever they feel like, and it has absolutely nothing to do with some artificial market definition. If terrad can produce a few decent stations without 30 minutes of commercials every hour, then they can coexist with satrad, ipods, etc. If not, then they'll continue to suffer. If someone comes along and narrowly defines the market as free radio, it doesn't magically relieve them from outside competition.

Same goes for satrad - regardless of what label somebody slaps on the market, they still have to compete with everyone else. "Nationwide" and "more channels" doesn't give them some kind of special power over people - it's just a slight competitive advantage. Just like "free" is an advantage for terrad. Just like "portable, 80 gigs, personalized" is an advantage for iPods. And the list goes on.

If the market wants a radio that has both HD and Sat Rad it will pay for it. That's like asking the Gas company to make manufacturers of gas heating equipment to include a place for fuel oil to be hooked up.

Clear Channel killed local radio... I hope I'm not the only one who could care less what they say.

I bet clear channel is affraid they will loose there deal they have with XM to air advertisments. If they merge there will be a high chance clear channel's programming will be cut from the satellite line up. When that happens clear channel won't get any money from satellite radio.

Hd is only a tiny blip on the radar screen now and will be so until it fails sometime soon. Satrad has earned it's acceptance by paying and working for it. CC, the iBlock Alliance and iNiquity know something that many of us also know: If this merger goes through Satrad will gain even much more acceptance and BECOME radio. These is one other way for satrad to totally dominate also: Make satellite receivers which receive both XM and Sirius, either way terrestrial radio will be left in the dust and iBlock knows it, that is why they are pulling these desperate ploys which just make them look ridiculous. Terrestrial radio is just digging itself into a bigger hole every time it pulls another one of these stunts, if it doesn't back off, kill IBOC and improve programming it will be dead within 5-10 years.

Nab's reaction to the proposed merger is more than enough proof for someone as Intelligent as Kevin Martin to see their thinly veiled attempt to block for their self interest.

I am not happy with how long this merger approval is taking, but I do support Martin and believe that he does a good job at balancing the interests of ALL parties and the population.

Thinking people know this merger is 1.5 years OVERDUE.

Screw NAB.

Plowboy1: If boy genius Kevy Martin is so smart, why doesn't he shut down IBOC and tell CC, Ibiquity and the alliance to go back to the drawing boards? Why doesn't he return the airwaves to local stations where they belong?

Anti-Trust? I quote the mad money dude, "a leaf flys into the FTC and they sign it."

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