The Sirius-XM merger faces a "high hurdle" because a rule bans the combination, FCC Chairman Kevin Martin told reporters yesterday after an FCC meeting.
"I think this is an unusual merger and I think it faces a high hurdle," Martin said.
The agency hasn't started reviewing the deal because it is still debating the substance of the rules with Sirius and XM, Martin also said.
"It's a little gray whether there's a rule or there isn't a rule," said Sirius CEO Mel Karmazin at a Lehman Bros. conference yesterday.
When the FCC granted licenses to the satellite radio companies 10 years ago, the FCC made a "statement," he said.
"If you go to the rule books, I'm not sure you'll find a rule," said Karmazin.
Karmazin also called the NAB "disgraceful" because of its opposition to the merger. He said the NAB paid organizations and individuals to write letters to agencies and Congressmen urging them to block the combination.
In a statement, Sirius and XM stated that they still "expect the transaction to be completed by the end of 2007.''
Karmazin also called the NAB "disgraceful" because of its opposition to the merger. He said the NAB paid organizations and individuals to write letters to agencies and Congressmen urging them to block the combination.
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Exposing the NAB is all the proposed Merger was supposed to do.. now we can move on without a merger and the realization that the NAB has its own agenda.
Yeah the NAB has an agenda, just like XM/Sirius has an agenda. There are paid shills on both sides. NAB is looking out for themselves like any business group would do. Just like XM/Sirius is urging their customers to write to their reps and ask them to support the merger. NAB is no worse in lobbying than XM/Sirius, they just have more money. Tough shit.
PFreak, it goes much deeper that your shallow interpretation. Whats that Digital music bill? how much will Sirius and XM need to pay in the future for royalties how sponsored these bills? Many of the connections to the NAB have been Exposed.
IMO this merger was never ment to happen and was only designed to expose these relationships.
As for XM and Sirius. I have seen nothing but usless orginizations come out in support of a merger. If the FTC supported it, thats a different story. The RIAA? ... but nope! they get WIFE supporting the "merger"
Oh yea... funny thing, what if CBS were to by Sirius or XM? Would the NAB support that? What if Sirius and XM joined the NAB? Why arent they part of the group?
yea and they been around the block too. at one point I thought there was a possiblity for the merger to go through as a result of all this corruption and conflict of interest, but now I just realize thats why it cant go through. To much power lies in these bastards hands and nothing could bo done.
"What if Sirius and XM joined the NAB? Why arent they part of the group?"
I've heard Mel tell the story that when he became CEO of Sirius he approached the NAB and said, "Hey, lets work together here. We are all broadcasters." The NAB declined Sirius' overtures. They weren't interested in XM or Sirius becoming members of the NAB.
looks like it effected the stock prices today too. This was basically his way of beating around the bush and saying "no way this gets approved."
Jeff,
It really doesn't go much deeper than my shallow interpretation. The merger is good for XM/Sirius and bad for NAB so NAB are opposed. I don't blame them and they are doing everything legally available to them to stop it. Good, sound business sense. Something XM & Sirius could use a little of. If they had any they wouldn't be in the situation they are, looking to merge.
If the merger was never meant to happen it was a huge mistake. It has effectively stalled new subscribers while consumers wait to see what is going to happen. Great work. And I don't believe Sirius will survive w/o the merger, they are just far to saddled with debt so I disagree that this was to expose anything. Nothing has been exposed. Do you really think the people in place that have to approve this merger don't already know about the relationships in question?
PFreak:
If the merger is a huge mistake, how is that bad for the NAB? After all, if the satrad companies and their subscribers are hurt because of the merger, shouldn't the NAB support it? Higher prices and lower service for satellite radio would benefit terrestrial radio, right? So why then are they fighting it?
They are fighting because they are afraid of increased competition from a stronger company, period. There is no other reason.
If the companies merge and they stick to their word, terrestrial radio will lose more listeners. If they merge and quality goes down, satrad subscribers will cancel and the NAB wins. If they don't merge, both companies will continue to struggle and the NAB wins.
In order to assert that the merger is a monopoly, you have to assume that satrad subscribers are not able to cancel the service and get their audio entertainment somewhere else. Maybe a few diehards wouldn't want to leave satrad, but absolutely nobody needs it when there are so many other options out there, several of which are FREE.
It never ceases to amaze me how much attention the media and government give to a $13/month luxury audio entertainment service merger while they basically ignore utility mergers like Cingular/AT&T. Everyone is concentrating their time trying to figure out whether a merger will drop or raise satrad prices by a couple of bucks while other companies (utilities, credit cards, etc.) are figuring out how to wring hundreds and thousands more out of each person in America. Let the audio entertainment market police itself, and start worrying about the companies that aren't being policed by the free market.
If the merger does not occur you will see both companies (XM and Sirius) scooped up within 12-18 months. Whether it's GM taking on XM or CBS taking on Sirius or XM, it will happen. Independent viability is not an option in the world of mega-media-behemoths..
>>> In order to assert that the merger is a monopoly, you have to assume that satrad subscribers are not able to cancel the service and get their audio entertainment somewhere else. Maybe a few diehards wouldn't want to leave satrad, but absolutely nobody needs it when there are so many other options out there, several of which are FREE.
This is absurd.
There aren't ANY other options out there for much of what satellite radio delivers.
Most areas of the United States lack a 24/7 blues channel. A 24/7 classical channel, let alone TWO (plus vocal music). And I seriously doubt there is another channel like Deeptracks in existence, anywhere.
Nowhere else can I get CNN or FNC or C-SPAN or CNBC while commuting to and from work.
Radio is not an Ipod, not even similar.
You have no other way to get blues or classical music? There is no other source for news on your way to work? That is absolutely absurd. Satrad might be the most convenient way for YOU to get what YOU want, but it is absolutely not the only way.
Where do those 50% of trial subscribers that cancel go? How about those 2.5%/month that leave? How about the 95% that have never subscribed? Is there a big gap on the dashboard where the satellite radio should be, or are they listening to something else?
And if the merger does happen, do you think that your classical and blues and news channels are going to suddenly disappear? Would that be good for business? Would you keep sending them money every month if they started taking away your favorite channels? Would all the subscribers just keep sending them money if they jacked up the rates on those channels?
Would the merged company still have the incentive to provide a good product after the merger? Can they subject customers to monopoly practices without having to worry about subscribers cancelling?
Just because a company provides what you perceive to be a better product than what others can provide, that does not make them a monopoly. Satellite radio is a convenient luxury (for some people), not an irreplaceable necessity.
You can't find a 24/7 blues channel? Who are you trying to kid? With wireless broadband about to explode, you'll be able to get thousands of music and news channels, from all over the world. The terrestrial radio stations are trying to squash satrad while they expand into internet broadcasting and leapfrog them. Satrad is already too expensive for most. The merger is necessary to cut costs so these companies can offer tiered pricing with a much lower entry point than the current $13/month. Without the merger there is no way they could offer such for at least another 10 years.
>>> You have no other way to get blues or classical music? There is no other source for news on your way to work?
I didn't say no other way to get blues or classical music. I said there are no other blues or classical channels in most other areas of US. Sure, I can take blues CDs with me. That was an option BEFORE sat radio and it didn't bother XM or SIRI. Or I can put it on my Ipod.
But I have no other choice for broadcast classical or blues. And I have no other choice for receiving Fox or CNN or C-SPAN. OR Dylan's program. Or Stern's. Or any of a huge number of other content items.
There is no workable substitute for sat radio. There are other sources of music, news, or whatever. But they do not offer the depth or breadth of programming sat radio does, and that makes them inadequate substitutes, and therefore NOT competition for regulatory purposes.
So because they provide a better product (in your opinion) then it would be a monopoly?
XM is the only service with Bob Dylan's program. So therefore XM must be a monopoly right?
Sirius is the exclusive source for Howard Stern. So then is Sirius a monopoly?
I'm a big fan of Chipotle, and no one else in the area sells burritos like that. If I don't like eating anywhere else as much, is Chipotle a monopoly?
The only real difference between satellite radio and other sources is that they CHARGE MONEY for access to the "depth and breadth of programming" that they provide. If that programming suddenly gets "thinner and shallower" what incentive to customers have to keep paying?