The American Antitrust Institute the other day asked the Department of Justice to file suit against the proposed merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc.
AAI, which filed against the Sirius-XM merger back in June, holds strong to its assertion that the merger would "lessen competition, or to tend to create a monopoly," in violation of Section 7 of the Clayton Act.
As far as I can tell, the American Antitrust Institute holds absolutely no relationship to the NAB, or has any ulterior motives here. They are simply a nonprofit organization that advocates an aggressive stance toward antitrust enforcement.
Under AAI's definition, satellite radio stands alone in its relevant market:
"Although the merger parties posit many alternatives, including everything audio from AM/FM radio, to Internet radio, to MP3 players and iPods, none of these offer the unique nationwide coverage of satellite radio, content, features, and ability to aggregate demand. There is no evidence, as required under the Merger Guidelines, that any of the audio alternatives proposed for inclusion in the market definition by the merger parties constrain the ability of the merged firm to increase prices."
Oddly, I don't see any mention of mobile audio (streaming audio to cellphones) in their letter. Mobile audio, in my opinion, is the most direct form of competition if you want to define it as a "nationwide multichannel mobile audio entertainment subscription service" as the NAB calls it. And with companies like mSpot, who already have over 1 million subscribers (not to mention the backing of several terrestrial radio companies like ABC Radio, Clear Channel and others), it's hard to say that mobile audio is "burgeoning."
Still, of all the arguments against the merger, AAI has consistently given the best ones to support their views. I know I'm from the "pro-merger camp" and all, but I have to give AAI credit for stating their case better than most. It all boils down to how the relevant market is defined, and that ultimately, is up to regulators to decide.
This merger is beginning to receive more and more opposition. People are finally going to listen to me.
Wow, who saw this coming... honestly, did they think it would be that easy.. I'm surprised this didn't happen within a month of the announcement a year ago..
This is a rehash of the myopic view. What else do you think an organization called the "American Antitrust Institute" would take?
Their own statement didn't take into account the reality on the ground, and it's that reality which makes the merger appropriate. If they don't see it, can you really be surprised? All these people want to do is say they fought against a merger. Self-validating pontification doesn't make the reality change.
Thats not competition
it does not come from sat's in the sky.....dont you know that we are so limited in our scope that even someone like slacker is not going to be competition because its on a different band (KA)...
LOL
Isn't there a limit to how long they will accept new comments?
Someone should be telling all these last-minute folks that they had their chance to speak and they missed the boat.
do they still allow these comments by outsiders? wasn't the time for comments already passed? will these comments be considered?
no alterior motives? why else would they wait this long to file? everyone knew about this thing a year ago
I GUESS THAT MEANS THE MERGER WILL BE DENIED. GREEAAAAAAAAAAAAT, WHAT A WASTE OF TIME ON SIRI.
I GUESS THAT MEANS THE MERGER WILL BE DENIED. GREEAAAAAAAAAAAAT, WHAT A WASTE OF TIME ON SIRI.
I GUESS THAT MEANS THE MERGER WILL BE DENIED. GREEAAAAAAAAAAAAT, WHAT A WASTE OF TIME ON SIRI.
I lick Sterns taint daily. I apologize for being a douche here.
AAI.....Just another 501(c) 3 Washington based think tank with a small inside staff with a huge number of academic/attorney advisory group. Any antitrust lawyer in town is a member of the group. Please send donations.
AAI.....Just another 501(c) 3 Washington based think tank with a small inside staff with a huge number of academic/attorney advisory group. Any antitrust lawyer in town is a member of the group. Please send donations.
A day late and a dollar short. Didn't the Fcc and DOJ already have and closed there public opinion period?
It is not like sat radio is making money and has taken over all radio.
Stack, we can only hope! I still don't understand how anyone can't see this will lessen competition.
I'm in total agreement with the last two posters. It WILL lessen competition, end so-called "duplicative" stations, (which aren't really duplicative at all), and give listeners less choices. How can this NOT be with a monopoly? THINK, PEOPLE!
By ABC Radio do you mean Citadel Broadcasting?
Paying per channel will give me less channels. But wait a minute it will cost me less to so less money out of my pocket per month. If only Comcast could figure this out maybe I would have not switched to a FIOS with more HD channels.
Here's another group that is suppose to be looking out for me- Never heard of them, and if they are looking out for consumers why were they not speaking up since day- not when we should be getting a decision soon- What a joke!
Also nothing they said and presented was earth shattering- It took them this long to come up with this?
DOJ and FCC stop taking $ from the NAB and others and just approve this once and for all!!!!
I seem to remember all the chest-pounding and crowing that the pro-merger folks were doing early in this process every time some two-bit "think tank" outfit submitted an argument. Fine. Let them frame the arguments to keep the merger from happening. I would love to see this all go to court and have Karmazin grilled under oath about all the supposed "benefits to the consumer..."
Ok guys, perhaps most of you failed to READ that the AAI originally gave their opinions and filed back in JUNE?
They are simply re-affirming their postion by refiling. Nothing unusual about it at all.
i wonder who in this organization is anti howard
he is the reason for all the lawsuits and/or delays
that plauge this merger
i wonder who in this organization is anti howard
he is the reason for all the lawsuits and/or delays
that plauge this merger
>>> A day late and a dollar short. Didn't the Fcc and DOJ already have and closed there public opinion period?
Their comments were filed in June of last year. The recent release was a PR, reiterating their views, publicly.
@Boardroom: That first post wasn't me. But you're right; it is just impossible to logically conclude that this merger could have anything but a negative effect on consumers. It is amazing to me that some people actually believe consumers will be better-served by a monopoly.
@Ryan: Do you use your cell phone for streaming audio entertainment in your car? I've never known anyone who did this on a routine basis (although, everyone who gets a new cell phone tries out all its features). I just don't think this is anything like a significant factor in the marketplace.
As to the million subscribers? Remember, Sirius has nearly that many subscribers that are sitting unsold on dealer parking lots. The point being "subscribers" are different things to different people, depending on who is doing the counting.
Who is stealing my name?
Notice how whenever there is a rumor that the deal is about to be approved some group sends in its protest and the merger is delayed.
Last time it was those gangsters at Georgetown Partners. Now these guys. Something is up.
the art of desperation
sad
But don't ALL mergers "lessen competition, or to tend to create a monopoly," in violation of Section 7 of the Clayton Act? Therefore why not deny ANY companies from merging?
Secondly, why would the merged SIRI/XM pose a bigger threat of "monopoly" than the 2 companies individually? If merged, XM and Sirius will simply have a slightly different business model, if that - it won't really affect people's listening habits (more than it already has) because ANYONE WHO WANTS SATELLITE NOW CAN HAVE IT ! ! ! ! The price of the subscription isn't really the issue, it's the fear that FM will lose listeners (and therefore ad dollars) - but they've already lost the listeners they're afraid of losing, so whether or not they merge is, frankly, a moot point NOW (comared to when the merger was first proposed over a year ago).
The threat to FM ad dollars is THE SAME whether or not the 2 companies merge, doesn't the NAB realize this? It's not as if the issue is *satellite radio or not satellite radio*. The 2 un-merged satellite radio companies pose just as real a threat to FM ad dollars as the merged companies. Furthermore, even if 1 succumbs, the survivor will simply inherit the others subscribers, resulting in no net gain for "terrestrial radio". Either way, we'll always have Stern. A worst case scenario is the 2 don't merge and people who want Stern and (O&A and/or Ron and Fez) have to buy separate radio systems, which is simply inconveneint rather than impossible, and how many people does that really affect (besides me)? Bottom line is there is really no reasonable basis to deny the merger. Satellite, internet radio, and the ipod are here to stay - no technology ever dies. The glory days of terrestrial radio are over, there's no going back, merger or not. The damage to terrestrial radio has been DONE! Hey, don't merge! It doesn't matter at this point! Everybody who wants Stern can have him - NOW. 24/7 ! We won that game! Either way, I will kiss the ass of the FCC BECAUSE, IN ALL HONESTY, AT THIS POINT, IT REALLY DOESN'T MATTER EITHER WAY ! ! ! !
What happens to the consumers intrest when one or both companies file chapeter 11 and fail? The radios will be useless junk. Consumers will be out pre-paid subscription money too.
After the first company fails, the other may be able to keep operating ASSUMING they can lure in enough compeditors customers. However...
Now we have only one company(monopoly?), no merger restrictions on customer pricing, no need to support the other hardware, no need to honor unused subscriptions. Is this better for the consumer than a merger?
BOTH companies are, and have been from the start, lossing money every year. If the merger fails the stock price of both companies will plument. With the economy declining and credit getting tighter it will be harder and more expensive to borrow operating capital. Which only makes failure more likely. These losses cannot be sustained. I think people equate satilite to terestrial radio and assume it can't go out of busness. Satilite radio is a luxury, terestrial radio is more of a public utility, providing too much public good and would not be allowed to fail. Until satilite radio gets a subscriber base in numbers like terestrial radio it will be a luxury, and luxuries can go.
It would be unlikly that another intrest would purchase the failed company, if SIRI or XM couldn't make a profit why would the new owners be able to.
Worse case both companies fail and all purchasers of satilite radios are out of a usable product, money spent on the radio(s) and subscription monies.
You can only hope you picked the right company.
What happens to the consumers intrest when one or both companies file chapeter 11 and fail? The radios will be useless junk. Consumers will be out pre-paid subscription money too.
After the first company fails, the other may be able to keep operating ASSUMING they can lure in enough compeditors customers. However...
Now we have only one company(monopoly?), no merger restrictions on customer pricing, no need to support the other hardware, no need to honor unused subscriptions. Is this better for the consumer than a merger?
BOTH companies are, and have been from the start, lossing money every year. If the merger fails the stock price of both companies will plument. With the economy declining and credit getting tighter it will be harder and more expensive to borrow operating capital. Which only makes failure more likely. These losses cannot be sustained. I think people equate satilite to terestrial radio and assume it can't go out of busness. Satilite radio is a luxury, terestrial radio is more of a public utility, providing too much public good and would not be allowed to fail. Until satilite radio gets a subscriber base in numbers like terestrial radio it will be a luxury, and luxuries can go.
It would be unlikly that another intrest would purchase the failed company, if SIRI or XM couldn't make a profit why would the new owners be able to.
Worse case both companies fail and all purchasers of satilite radios are out of a usable product, money spent on the radio(s) and subscription monies.
You can only hope you picked the right company.
>> What happens to the consumers intrest when one or both companies file chapeter 11 and fail?
Absolutely nothing. Either, or both, of these companies could file for Chapter 11 tomorrow and the service would continue to operate as usual. And when it/they came out of bankruptcy, they would healthy as an ox. The shareholders would lose, some creditors might lose, but the service would continue, uninterrupted. Sirius has a bit more exposure because of (a) its pressing need to begin a satellite replacement cycle but even this is not unmanageable, and (b) because Stern controls a significant portion of the business and they cannot afford to match the 3/4 billion they paid him for the first five years (largely, in advance).
>>> Worse case both companies fail and all purchasers of satilite radios are out of a usable product, money spent on the radio(s) and subscription monies.
There is no plausible scenario under which this might happen.
The perspective of each side is based on fear, not "concern for the public". On the one hand, the fear of merger advocates is that Sirius will go out of business and Howard go off the air - we don't really care about subscription costs or the efficiency of the business model. On the other hand, the fear of the NAB is that terrestrial radio will lose advertising dollars (even though that damage has already been done). The "monopoly" issue isn't really relevant, and all the talk of monopoly is a diversion from the fears that nobody wants to say out loud, plus the "ethical" objection to Stern, which is not insignificant. But this is something you NEVER hear about.
Actually, a satellite radio infrastructure is so expensive (and logistically awkward) that the planet probably can't support more than 1 very effeciently run one. For this reason it's arguable that satellite radio should be exempt from the usual anti-monopoly rules.
>>>> Actually, a satellite radio infrastructure is so expensive (and logistically awkward) that the planet probably can't support more than 1 very effeciently run one. For this reason it's arguable that satellite radio should be exempt from the usual anti-monopoly rules.
This is the one legitimate argument I've heard supporting the merger. The problem is that
a) Neither company is making it -- they are both claiming they don't "need" the merger to survive; and
b) When the licenses were granted, they were received subject to terms that they could not be held by a single company (i.e., a monopoly) specifically with the idea that competition was needed.
The truth of the matter is abundantly clear. The companies saw an opportunity arise under which they could create a monopoly, i.e., relaxed enforcement at the DOJ. And so, they're going for it.
Merger of sat radio is a monopoly in every sense. Thank you AAI!
Don't you mean XM is a waste???