Both of those guys are on record as having reservations about the merger, so if they are having a problem with the DOJ review process, then it's possible that they already know it's been approved.

The part that REALLy cracks me up about this letter is when they say the are concerned that the DOJ is RUSHING their decision thru.

RUSHING?????!!!!!!!!!!!

WTF????!!!

If this thing drags any slower, TIME IS GONNA FRIGGIN stand still!

I know snails that move faster than this.

LOL. Rush??? What a joke.

This Conyers guy is 77 years old. Men his age should not only be barred from driving, but from making ANY public decisions WHATSOEVER!

LOL. Just when you think things are looking good with this merger...

This is beyond ridiculous. Why couldn't there be this MUCH debate about going into IRAQ??? LOL. Seriously. The government decided to go to FRIGGIN WAR quicker than they've been able to make a decision about this merger.

Enough already.

The part that REALLy cracks me up about this letter is when they say they are concerned that the DOJ is RUSHING their decision thru.

RUSHING?????!!!!!!!!!!!

WTF????!!! LOL.

If this thing drags any slower, TIME IS GONNA FRIGGIN stand still!

I know snails that move faster than this.

LOL. Rush??? What a joke.

This Conyers guy is 77 years old. Men his age should not only be barred from driving, but from making ANY public decisions WHATSOEVER!

LOL. Just when you think things are looking good with this merger...

This is beyond ridiculous. Why couldn't there be this MUCH debate about going into IRAQ??? LOL. Seriously. The government decided to go to FRIGGIN WAR quicker than they've been able to make a decision about this merger.

Enough already.

so whats the big deal that the Asst. AG for Antitrust may green light it over some objections of some of his staff?

i mean...thats what makes the Asst. AG the "Asst. AG", and his staff "his staff", right?

when his staff members become Asst AG's, they can make the decisions.

this is great news...an entire industry's future now relies upon a bunch of martini-pickle-fingered douchebag guberment lawmaker slobs raising a stink about procedure and protocol.

this should have been taken care of months ago.

That's actually true....and kinda scary. I guess the loby for not going into war isn't as strong as the loby for not merging.

Ryan - I don't consider this stock dropping news. I think the prices are moving on false rumors. A couple of weeks ago in spiked on false DOJ approval rumors. Now it drops on false rumors as well.

I am still utterly amazed at the scrutiny of the merger of these 2 companies. Its like they control a commodity that no one else has access to. cmon its frickin' music and the have 3% - 4% of the radio listening population. . With every day of this thing dragging on the competition is just beefing up their offerings. Approval of merger, you get one company WILLING to work with the consumer, Denial, well you have one company standing that does not have to give any concessions. My god man, it is almost 2008...just give us a DECISION!.

@ muscle

this afternoon almost looks like a programmed trade to cover a position...

SIRI shat as soon as it hit an uptick after $3.375 w/approx 5.5 million shares
XM shat soon after, albeit a little more gradual and under considerably less volume

someone or something got really, REALLY spooked at SIRI this afternoon, and it naturally flowed across....

Dumpus - We saw XM at one point in the day on November 30th up almost 20%. False rumors can cause crazy things. I think it all calms down within a couple days. Do any of you see any DOJ decisions out in the news tonight? I haven't seen any press releases have you? Rumors Rumors Rumors.......

That's actually true....and kinda scary. I guess the loby for not going into war isn't as strong as the loby for not merging.

Ryan - You actually think a letter written yesterday by Conyers cause the stock to drop to $2.76 at one point today? How many letters have Congressmen written so far?

To me this is all about rumors.

well, i would take this as they think its going to pass(and since they are against it from the beginning, they arent happy)
I view this as a good sign but bud is right---The longer this drags out, the more BS you will hear

Reuters updated their report with more information:

Shares of the two companies fell sharply in the final hour of regular trading on Wednesday, as some investors feared antitrust enforcers might reject the combination.

XM shares closed down nearly 10 percent to $13.21 and Sirius closed 6 percent lower at $3.29, both on Nasdaq.

http://www.reuters.com/article/marketsNews/idUKN12184720071212?rpc=44&sp=true

Looks like its not just Ryan who felt this was why it fell, Reuters does too. Also, wasnt there supposed to be a DOJ meeting today? Maybe Conyers forced Barnett to postpone?

Read the article Banff.

Excerpt -

Analysts said the ultimate decision rested with senior Justice Department officials.

"We do believe there is a chance that the staff may recommend rejecting the merger of Sirius and XM, but even if they do, it remains up to the senior lawyers at the Department of Justice to decide whether or not to approve the merger," said Frederick Moran, an analyst at Stanford Group.

XM had no comment on the share movement. A Sirius spokesman was not immediately available.

"There are only two possibilities here: something has leaked from Justice Department and their review on the proposed merger or some very smart, fast money is really wrong," said Jon Najarian, co-founder of Web information site Optionmonster.com.

-------------------------------------------------------------------------------------------------------------

Oh my goodness what ridiculous rumors will do.

I would say this was driven by that silly letter if it didnt coincide with the market letting the bottom out for a couple of minutes. In 20 minutes XM dropped in exaggerated fashion with the market hitting a low and bouncing off it more then 1.50. I have seen this before when companies want to hide under a broader market decline and drop the price. If you noticed the volume surge it looked like someone picking up a pile of shares off stops they were hitting. I am guessing this was a manuever to grab a big pile of shares cheaply...The letter only helped mask what was going on...

The DOJ and FCC should be embarrassed. Our country is being caught rapidly in the area of technological innovation and in this great land it takes 10months to let two companies who control 5% of the music listening public merge. month after month reports came out about whether special interests in congress will defeat the merger, NAB deep pockets will defeat the merger, etc with those arguments actually carrying weight in how things are done in our country now. The DOJ needs to stand up for innovation (its the only thing that will drive our economy long term) and let these two form a company that will force mp3 player, internet radio, terr radio, and other audio entertainment companies keep up and raise the bar in their offerings, delivery, and business model. For the love of god, this is not writing the constitution, just appove the thing already and let the private sector work out the rest...Ten months is insane.

Wanna see what ridiculous rumors can do . This is from the Nasdaq after hours trading site tonight

Sirius
After Hours
Last: $ 3.30

High: $ 3.70

Volume: 2,246,500 After Hours

Low: $ 3.08

This caused by yesterday's letter? Puhlease!

*****Ryan - You actually think a letter written yesterday by Conyers cause the stock to drop to $2.76 at one point today? How many letters have Congressmen written so far?

To me this is all about rumors. ********

This isnt just about a congressman writing a letter. This is about Conyers, who is the head of the senate Anti Trust Dept.

It means.... Absolutely nothing, but it will cause prices of the stocks to drop significantly, for now.

RE: frigginregans comment:
"this is great news...an entire industry's future now relies upon a bunch of martini-pickle-fingered douchebag guberment lawmaker slobs raising a stink about procedure and protocol."

It isn't the governments fault that the two companies spent themselves into such a deep hole they can't get out individually. The government shouldn't even have to entertain this merger if it doesn't want to. Its been explicitly stated from the beginning that these companies could not merge. There was no clause that said "...unless they can't make any money" or "....unless alternative entertainment forms are created in the future".

The part that REALLy cracks me up about this letter is when they say they are concerned that the DOJ is RUSHING their decision thru.

RUSHING?????!!!!!!!!!!!

WTF????!!! LOL.
----------------------------------------------------------------------------------------------------------
AMEN!! You said it all.

Top Contributors to John Conyers Jr. (D) During the 2006 Election Cycle
Rank Donor Amount (US Dollars)
1 American Assn for Justice $ 11,000
2 Baron & Budd $ 10,500
3 Brotherhood of Railroad Signalmen $ 10,000
3 Clear Channel Communications $ 10,000
3 Credit Union National Assn $ 10,000
3 Intl Brotherhood of Electrical Workers $ 10,000
3 National Cable & Telecommunications Assn $ 10,000

http://www.forbes.com/markets/2007/12/12/xm-sirius-merger-markets-equity-cx_ml_1212markets29.html

"Analyst David Bank of RBC Capital Markets thinks that while investors may have dropped the satellite radio stocks based on the Congressmen's letter, it was mostly "noise that doesn't mean much for the actual deal." Bank still believes that the odds are in favor of the merger going through, though he is unsure of whether the deal will close by the year's end.

Bank also noted that the stocks may be slowing due to the Chairman of XM, Gary Parsons' announcement last week that recent federal regulatory delays may push back a decision about the merger, as routine end-of-year bureaucracy inertia could get in the way of a resolution. "

"This isnt just about a congressman writing a letter. This is about Conyers, who is the head of the senate Anti Trust Dept."

And how many letters has Conyers written before this about the merger that caused just about no movement in the stock? 3 or 4? I forget how many

Sirius is back up now to $3.37 in aftermarket trading. If it goes right back to where it was this morning in a couple of days you are going to tell me it dropped to $2.76 today because of a letter???

Guys wake up! The DOJ approval and rejections rumors are flying all the time. Its allrumors until an announcement. Thats whats moving the stocks. Ridiculous Rumors!

>>> and the have 3% - 4% of the radio listening population.

A week before this merger was announced, just about every person posting here would have clearly distinguished between sat radio and terrestrial. Few, if any, would have said, "Oh, I'll willingly go back to terrestrial", or "Terrestrial is essentially the same thing as satellite radio".

Now, you people routinely classify satellite radio and terrestrial as though they are similar, variants of the same thing, or totally identical.

I can understand the argument that iPods have changed the competitive landscape. But the idea that satellite radio and terrestrial share the same "listening population" is just ridiculous. Terrestrial is the same competitior for sat radio it was a year ago and 5 years ago. Not one significant thing has changed. NOt one person I know of who has sat radio would consider going back to terrestrial.

"Not one significant thing has changed. NOt one person I know of who has sat radio would consider going back to terrestrial."

Most people listen to both. I personally don't know one sat subscriber who listens to just satellite and never listens to any terrestrial anymore. Surveys have been done to show a huge majority of sat subs listen to terrestrial and interestingly enough internet radio as well. They all compete for listener's time.

Sent this email to conyers.

First let me start by saying that I have been a Sirius Sat subscriber and shareholder long before the merger was announced. I must say that I am amazed and appauled that you and Rep. Chabot are accusing the DOJ of rushing to approve this. They have been looking at this since Feb. How much longer do they need? This is why so many people are synical about our representatives and government agencies. You guys take too much time getting things done!

The argument against the merger is that it will hurt the consumer. Let me give you a real life example of why that is the furthest from the truth. I am about to purchase a new 2008 Honda CR-V. It comes equipped with XM only. I prefer Sirius' programming because I am a Buffalo Bills / Football fan located in Atlanta, Georgia. Honda only offers XM so I can't get the programming I really want (football). Plus the subscription for XM would cost me $12.99 per month compared to $6.99 for a second subscription to Sirius. If the two merged I would get more programming (football and baseball)for less cost ($20 per month instead of $26). Those are real facts. I'm not sure what you guys are looking at but it seems to me that I as a consumer can only benefit from this merger and would be hurt if it were not approved.

From a shareholder's point of view both these companies are loosing money. Some say they may never become profitable. I don't believe this but the facts are the facts. They are loosing money. By allowing this merger to go through you will be turning 2 sick companies into 1 healthy company. These companies are entertainment companies. They compete with terestrial radio, IPODS, regular tv, cable tv, sat tv, etc. Not just eachother. To say otherwise is ridiculous.

It's so obvious that there is no reason for these companies to not merge. What is not obvious is why it's taking so long. It seems to me we (the government) should spend more time figuring out how we let banks loan money to people with no income, no job and no down payment to purcahse homes they can't afford, instead of figuring out how not to let consumers enjoy a better product at lower prices.

Not allowing this merger to go through tells me that the government does not have the consumer's or the shareholder's best interest. With all due respect Sir, it seems you have a few select constituants interest's you are fighting for but it's certainly not they regular guy/gal American consumer.

I hope you actually read this and respond to me.

Thank You,

Jim Moriarity
Consumer / Shareholder

I listen to only 3 channels on my radio if I'm not traveling.
1 on FM (rock)
1 on AM (talk)
1 on XM (comedy)

I AM 1 USER and YES I USE ALL 3 bands.
When did the last band get merged in(FM), was it this tough too?
It is worth the research.

That is my daily pattern and AM/FM used to be the monopoly in my car.
Now XM is the only think that is breaking up that monopoly.

This whole conversation is in reverse. How do we break up the current AM/FM monopoly when XM/Sirius only handles 4%?? This merger is the only way, otherwise this innovation would have been crushed by current big-money special interest in "our" government.

^^^Jim Moriarity

Makes too much sense. Try something like "First let me say, you guys are fantastic and I'll give you some money to make this thing not happen and I'll bitch and moan to slow the process down..." like the NAB's been doing. It seems to be working for them, so just replace the negatives you don't want with the positives you do.

•Stack Pointer "Terrestrial is the same competitior for sat radio it was a year ago and 5 years ago. Not one significant thing has changed. NOt one person I know of who has sat radio would consider going back to terrestrial."

But, that's the competition you're looking for. I'd think that you'd see that terrestrial radio having to make sure they're offering quality entertainment to lure back satellite subscribers and not have us all run to an iPod if we do leave. The problem terrestrial radio has is it's not entertaining with 2 songs...5-7min commercial...4 songs...10min commercial, and then repeat the playlist every four hours. The thought of the competition not being there 5 years ago doesn't mean that the times haven't changed to the point now where everything from cds, iPods, internet radio, satellite radio, live concerts, music stations through my cable company, etc., aren't able to be looked at as fighting for our ears.

MERGER ANNOUNCEMENT IS DECEMBER 13, 2007 IN THE AM.

THAT'S THE REASON FOR THE SHAKEOUT, NO OTHER REASON. BIG PLAYERS GET CHEAP SHARES, WEAK HANDS FOLD. SIRI/XM IS SKYROCKETING TOMMOROW.

MARK THIS POST, I'M PRETTY CONFIDENT, RARELY WRONG.

MERGER ANNOUNCEMENT IS DECEMBER 13, 2007 IN THE AM.

THAT'S THE REASON FOR THE SHAKEOUT, NO OTHER REASON. BIG PLAYERS GET CHEAP SHARES, WEAK HANDS FOLD. SIRI/XM IS SKYROCKETING TOMMOROW.

MARK THIS POST, I'M PRETTY CONFIDENT, RARELY WRONG.

MERGER ANNOUNCEMENT IS DECEMBER 13, 2007 IN THE AM.

THAT'S THE REASON FOR THE SHAKEOUT, NO OTHER REASON. BIG PLAYERS GET CHEAP SHARES, WEAK HANDS FOLD. SIRI/XM IS SKYROCKETING TOMMOROW.

MARK THIS POST, I'M PRETTY CONFIDENT, RARELY WRONG.

MERGER ANNOUNCEMENT IS DECEMBER 13, 2007 IN THE AM.

THAT'S THE REASON FOR THE SHAKEOUT, NO OTHER REASON. BIG PLAYERS GET CHEAP SHARES, WEAK HANDS FOLD. SIRI/XM IS SKYROCKETING TOMMOROW.

MARK THIS POST, I'M PRETTY CONFIDENT, RARELY WRONG.

MERGER ANNOUNCEMENT IS DECEMBER 13, 2007 IN THE AM.

THAT'S THE REASON FOR THE SHAKEOUT, NO OTHER REASON. BIG PLAYERS GET CHEAP SHARES, WEAK HANDS FOLD. SIRI/XM IS SKYROCKETING TOMMOROW.

MARK THIS POST, I'M PRETTY CONFIDENT, RARELY WRONG.

MERGER ANNOUNCEMENT IS DECEMBER 13, 2007 IN THE AM.

THAT'S THE REASON FOR THE SHAKEOUT, NO OTHER REASON. BIG PLAYERS GET CHEAP SHARES, WEAK HANDS FOLD. SIRI/XM IS SKYROCKETING TOMMOROW.

MARK THIS POST, I'M PRETTY CONFIDENT, RARELY WRONG.

MERGER ANNOUNCEMENT IS DECEMBER 13, 2007 IN THE AM.

THAT'S THE REASON FOR THE SHAKEOUT, NO OTHER REASON. BIG PLAYERS GET CHEAP SHARES, WEAK HANDS FOLD. SIRI/XM IS SKYROCKETING TOMMOROW.

MARK THIS POST, I'M PRETTY CONFIDENT, RARELY WRONG.

>> Most people listen to both. I personally don't know one sat subscriber who listens to just satellite and never listens to any terrestrial anymore. Surveys have been done to show a huge majority of sat subs listen to terrestrial and interestingly enough internet radio as well. They all compete for listener's time.

I won't address the so-called "surveys" because they are beside the point. The entire concept for allowing a merger is that the competitive landscape has changed. Yet, nothing has change in this respect.

In DARS Report and Order (12 FCC Rcd 5764) it was predicted "after seven years...the penetration rate for satellite DARS receivers in radio listening environments 'may not be significantly greater than 4%' and ... 'satellite DARS share of radio listening time will grow ... slowly over decades'". Yet, Mel Karmazin claimed "11 or 12% of total households" as of the end of '06.

So, Mel claims 11 or 12%; you claim 4%, and the original DARS order suggested 4% after 7 years (not just 6, which is where we are).

It is a tough argument to make that terrestrial radio is more of a competitive force than anyone anticipated; it is all available in black and white, and the market share is actually ABOVE what was predicted when the separation of the two licenses was mandated.

Jim Moriarity - What's really amazing is that you'd send an email to a Congressmen with so many mistakes in it. (1) you misspelled appalled; (2) the govt has not been looking at the merger since February. XM and Sirius announced their intention to merge in February, but did not file any sort of application for permission to merge until the summer, and when they did, they filed a piece of crap application that didn't offer any economic justification for the merger, and then they dragged their feet responding to the DOJ's requests for more data; (3) despite Mel's repeated promises, you're not gonna get both baseball and football on one radio for many many years, (4) what you say about the companies needing to merge to stay viable may be true, but XM and Sirius have never ever said as much to the govt. To the contrary, they have continued to tell Congress, DOJ and the FCC that they don't need to merge, and in fact, that they will survive and thrive even if the merger is denied. So the "fact" that they may go bankrupt is simply not in the official record for the govt's consideration; (5) As described above, its really not been that long, certainly not any longer than other high profile mergers. DOJ routinely takes more than a year, and the FCC often takes longer than six months. So far here its only been a little longer than six months, and during that time XM and Sirius have had to respond to the govt's requests for more data because they were not forthcoming for so long. (6) Your statement about letting XM and Sirius provide service at lower prices is ridiculous. Are we to believe that this will be the first merger (monopoly or not) that has actually lead to lower prices? (7) You have no idea who Conyers is, or who he represents. He's a consumer oriented Congressman who may just believe that satellite radio is a unique distinct market - with very good reason if you've watched how XM and Sirius have competed with each other over the years (not with iPods, etc) - so that letting the only two companies merge into one just might be a bad idea.

" (3) despite Mel's repeated promises, you're not gonna get both baseball and football on one radio for many many years"

- Link? What are you basing this off? You spell out quite a few errors another poster made, and then pass your opinions as facts.

" (7) You have no idea who Conyers is, or who he represents. He's a consumer oriented Congressman who may just believe that satellite radio is a unique distinct market - with very good reason if you've watched how XM and Sirius have competed with each other over the years (not with iPods, etc) - so that letting the only two companies merge into one just might be a bad idea. "

- He is obviously out to help consumers (ignore the $10,000 donation from Big radio). Why is his "opinion" based on a rumor from a WS analyst? That's not very sound regulation if you ask me (which your not).

Many of your points aren't valid, and you have added to the conversation. Thanks!

>>> " (3) despite Mel's repeated promises, you're not gonna get both baseball and football on one radio for many many years"

>>> - Link? What are you basing this off? You spell out quite a few errors another poster made, and then pass your opinions as facts.

Not all facts can be found at the end of a url. This is one of them. If you understand what is going on it is pretty obvious, without a link, that you won't be getting MLB and NFL on the same receiver anytime soon, and probably, never.

>>>> The thought of the competition not being there 5 years ago doesn't mean that the times haven't changed to the point now where everything from cds, iPods, internet radio, satellite radio, live concerts, music stations through my cable company, etc., aren't able to be looked at as fighting for our ears.

This is the bill of goods that XM and SIRI have sold and so many have bought.

But it isn't reality. You cannot just discount qualitative aspects of a market because the quantitative changes. CDs, iPods, Internet Radio, Live concerts, cable music -- none of those have the key attributes that make satellite radio a market. To claims that "all music content" is the market is just silly. The market is satellite radio -- 100+ channels on a subscription basis, real time content, available as an OEM install in your car, and ubiquitously available throughout the country -- whether you're on Manhattan or at the edge of the Grand Canyon. None of these other media can deliver what sat radio does.

The fundamental differences between CDs, iPods, Internet Radio, Live concerts, and cable music versus satellite radio are astounding. Are they competitors? Of course. Just as airlines compete with railroads. But the existence of a railroad does not preclude a monopoly in airlines. Ever. Under any circumstances.

Now, I recognize that XM and SIRI have done a fantastic job of selling you guys this concept, but one would hope that experienced attorneys at DOJ and administrators at FCC would have the gumption to see through a sales job.

Stack : "So, Mel claims 11 or 12%; you claim 4%, and the original DARS order suggested 4% after 7 years (not just 6, which is where we are)."

The numbers come from Arbitron. 4% of total radio listening. Stack, from reading a few of your posts, I am starting to believe that you have never followed the radio business at all. Why post about a business you have no interest or knowledge of? I don't understand where you are coming from. Why post all the time about an industry you are not interested in?

I apologize Ryan. Tom Taylor just came out with his newsletter saying the letter was the reason for the drop. I guess you were right.

I am beside myself thinking that a meaningless letter ( which Conyers has written letters about this issue before) could cause the stock to drop so precipitously. Its absolutely insane. What is the market thinking? Hopefully it comes back to its senses quickly.

>>> I am starting to believe that you have never followed the radio business at all. Why post about a business you have no interest or knowledge of? I don't understand where you are coming from. Why post all the time about an industry you are not interested in?

I am not interested in the radio business. I am interested in the satellite radio business.

They are two different, totally unrelated businesses with almost nothing in common, which is the reason you stay confused about it all the time.

>> The numbers come from Arbitron. 4% of total radio listening.

Yes, I know where you got your 4% figure from.

And it is interesting that just about everyone was doubting the REST of the Arbitron figures but somehow, they figure the 4% is right.

But it is neither here nor there -- 4% is still ahead of of where FCC anticipated sat radio would be at this point in its existence, so competition from terrestrial obviously hasn't been a lot more of a problem than originally anticipated.

What HAS been a problem is a foolish effort on the part of Sirius, and to a lesser extent, XM, to grow the business by adding expensive content. It is one thing for a mature, profitable business to add expensive content and it quite something else for a company with 700,000 subscribers to blow 3/4 billion on marquee content when it cannot even afford to pay its bills.

lol @ xmsr +.78 / 5.90% 9:56am

did someone sneeze "ahhhhh-PROOOOVE!!!!" while walking into the DoJ for work this morning?

"I am not interested in the radio business. I am interested in the satellite radio business.

They are two different, totally unrelated businesses with almost nothing in common"

Stack, that statement borders on insanity. I'm sorry but I cannot even read your posts anymore after that kind of statement. It makes absolutely no sense at all. Take care and best of luck to you with your ravings.

PS - Ryan it looks like the market came back to its senses a little this morning. How bizarre for it to drop yesterday to $2.76 on that letter. Unbelievable.

>> that statement borders on insanity

What borders on insanity it to treat a business that is based on a subscriber model with an entirely different array of expenses and operating characteristics as though it were similar to one that is ad-supported and lacks the massive infrastructure costs of satellite radio.

Obviously, you know nothing about accounting or business. Your "Summa Cum Laude Accounting Degree" notwithstanding. Ha!

Correct me if I'm wrong, but Stack just explained the competitive advantages of terrestrial radio vs satellite radio.

Sure, they're not the same, but they compete. No two competitors in the world are exactly the same (at least not for long). If I still lived in Austin, which had some great stations, satrad wouldn't even cross my mind. Now that I'm in Houston, where the radio sucks, it's iPod in the car and internet radio at work, and possibly satrad in the future if/when they come out with a dual-mode radio. Or maybe the Slacker if they fix the issues. Or maybe cell-phone radio depending on the offerings. Is that not competition?

This is how the majority of people - you know, the people who don't spend 12 hours a day on orbitcast - view the market. I'm not going to back to terrad except for maybe local sports when I'm on the road, but that doesn't mean I'm forced to pay for satrad. Whether or not you can "prove" the other options aren't technically the same doesn't matter - because consumers prove you wrong every time they consciously choose something else over satrad.

>>> Is that not competition?

Who ever said satellite radio doesn't compete with terrestrial? I certainly didn't, and frankly, I don't know of anyone who has made that argument.

As I've tried to explain to you, at least 20 times, there is no question as to whether sat radio competes with other audio entertainment. That is not a relevant nor is it a material distinction.

The question is whether these other things are "substitutes" (a totally different question), and they clearly aren't, at least within the meaning of the antitrust law as it exists today.

And the question you refuse to answer:

If there are no substitutes, how do you explain all those people that make a conscious decision to choose something else over satellite radio?

If there are no substitutes, how do you explain a net loss of retail subscribers at XM?

When someone buys a car with an XM radio, is XM competing with Sirius for that subscriber? Or are they competing with the AM/FM button and the Aux jack?

>> And the question you refuse to answer:

I don't refuse to answer it. It just isn't a relevant question

You cannot infer from the fact that someone chooses not to subscribe to satellite radio that there is a "substitute". They may choose to listen to nothing. They may choose to listen to a CD. Or they may choose to listen to an iPod or terrestrial.

Nobody in his right mind would have argued, 10 years ago, that CDs are a "substitute" for terrestrial radio. Nobody. Yet, that is precisely the same argument you are trying to make. An iPod is nothing more than an extension of a CD (one that typically delivers inferior quality in exchange for convenience).

One might say you are showing a lack of, well, common sense.

To take it a step further, you and others are trying argue that terrestrial radio is a substitute for satellite radio, yet, neither XM or Sirius have EVER made that argument before the merger talk began. Both Mel and Gary have referred to satellite radio as a "duopoly" which implies there are ONLY TWO PLAYERS IN THE INDUSTRY. What about that? Do you totally ignore these guys' words uttered before they started wanting the merger?

It may well be that satellite radio -- XM OR SIRIUS -- cannot survive without a merger. That is not because there are too many "substitutes". That is because of lousy business decisions.

A CD certainly is not a substitute for radio. But a 20gig iPod certainly is. Ask iPod owners, and I guarantee you at least 80% will say the same. I guarantee the 5000 songs on my mp3 player are deeper than any playlist on terrestrial radio. If that's not a "substitute" then I don't know what is.

Do you happen to remember Iridium satellite phones? It was the only "nationwide portable phone service". Did it have a perfect substitute? Nope. Did people substitute it anyway? You betcha. Cell phones, despite the coverage limitations (especially in 1998), put Iridium out of its misery in one year. The fact that they had a "monopoly" on the satellite phone market didn't save it from competition from everyone else.

What's that you say? A phone call is the same no matter whether it comes from a satellite or from a tower? Well, the last time I checked, "Like a Rolling Stone" is the same song on terrestrial, satellite, iPod, Slacker, internet radio, and cell-phone radio.

And you're right Stack, we should define the market on something Mel and Gary said half-jokingly when the growth projections were significantly higher. We should ignore all the consumers out there who turn down satellite radio and choose something else. We should ignore the fact that, despite "no perfect substitutes" for satrad, half of trial subscribers choose a substitute anyway. We should ignore the fact that about 5 million people canceled satrad and substituted it with something else this year. And while we're at it, we should disregard the fact that it's a lot harder to switch from XM to Sirius than it is to switch from XM to anything else.

In fact, I think you should ignore any real-life evidence that damages your "technically not substitutes based on FCC guideline X.Y" drivel.

>>> A CD certainly is not a substitute for radio. But a 20gig iPod certainly is. Ask iPod owners, and I guarantee you at least 80% will say the same. I guarantee the 5000 songs on my mp3 player are deeper than any playlist on terrestrial radio. If that's not a "substitute" then I don't know what is.

You are big on guarantees. But the reality is that unless an iPod can deliver real time programming and music that you don't have to purchase, there is no way in hell it is properly considered a 'substitute' for radio. No matter what you and your friends say, it lacks essential characteristics that would be required of a "substitute".

>>> Do you happen to remember Iridium satellite phones? Did it have a perfect substitute? Nope. Did people substitute it anyway?

You're making my case for me. No, there was no substitute. People didn't substitute it. They did without it. It was a monopoly, just as sat radio will be after the merger. Just because someone chooses to do without something doesn't mean there is a "substitute" for it. It simply means they chose to do without it.

>>>> The fact that they had a "monopoly" on the satellite phone market didn't save it from competition from everyone else.

It also didn't keep them from setting prices so high that it was, effectively, business suicide. And the consumer sure as hell wasn't served by it.

>> And you're right Stack, we should define the market on something Mel and Gary said half-jokingly when the growth projections were significantly higher.

Neither was joking when these remarks were made. In fact, both have referred to it as a duopoly in the midst of investor conferences where nobody was laughing.

>>> Well, the last time I checked, "Like a Rolling Stone" is the same song on terrestrial, satellite, iPod, Slacker, internet radio, and cell-phone radio.

It is well established that "Like a Rolling Stone" isn't the product. The product includes the tracks before and after it, it includes having the ability to select one of 70 other music stations, the ability to choose to listen to NFL or MLB or Stern or O&A, it includes the ability to purchase a car that has it already installed. It includes not having to purchase Like a Rolling Stone just to hear it. It includes the package the receiver came in and it includes the freaking email you get from XM every week telling you what is on. It is the entire package, the way you buy it, how much you pay for it, and every little think connected with it. It includes weather service, navtraffic, and the 24/7 channel. And by god it includes the damned preview channel. EVERYTHING. ALL OF IT. Complicated, isn't it? You would have learned that in chapter 1 of your marketing book had you ever studied it.

Common sense, indeed.

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