Thornburgh speaks out against Sirius-XM merger

How is this considered a monoply, if you don't want it you have a choice not to pay for it and get it for free.

You swallowed the blue pill... welcome to the real world. SAT radio is simply on the cutting edge. The merger is going through with stipulations, otherwise ti would have been denied a very long time ago.

Finally someone who makes sense!!!

Woh, wait a second. How anyone can compare a merger of Yahoo/Microsoft and XM/Sirius is amazing. One involves two nearly bankrupt companies that together generate single percentages of the total audio entertainment world and the other effectively controls the platform all computers run on and half of all internet searches in the world.

In fact, I would suggest to you that the merger of XM/Sirius is necessary to stop the control of audio entertainment by only a few companies. That's what everyone misses here. Who cares about the method of distribution? It certainly doesn't seem to matter to the consumer. And if it doesn't matter to the consumer, who has chosen to get their audio entertainment from their cell phones, their ipods, the internet (soon via WI-MAX), and terrestrial radio, why should the department of justice?

Remember, it wasn't the distribution system that stopped Echo Star/Direct TV merger- it was the fact that in some places, sat. tv was the only game in town (no cable service, etc). That simply isn't true of sat. radio. Cell phones and the internet are available just about everywhere now. And in those few acres of land they don't work, ipods and slacker radio seem to pick up the slack just fine. And since the DOJ is permitted to look into the immediate future for competition, WI-MAX (which is no longer a pipe dream as the bandwidth has been auctioned off) is coming sooner and quicker than anyone realizes.

Merger has to be approved so there is competition for these new forms of audio entertainment, available now and coming soon. The fact that the entertainment comes over a sat. or through your ethernet cable, of over your cell phone tower, or through good old fashioned radio waves is COMPLETELY beyond the point.

I can understand the concern of the implications of this merger.

But if you look at it simply as an issue of market share, those issues go away.

Ok, so you finally decide to define the market as "mobile audio entertainment". That would mean that you include significant players in this market such as HD radio, Terrestrial Radio, Satellite Radio and iPods. I say significant, because if you include every record player, cd player, etc, those dont make up a significant audience.

Now, you look at the market share in that market. Last time it was compared, XM/Sirius COMBINED had less than 5% market share when compared ONLY to terrestrial radio. That percentage would drop if iPods and HD were thrown in to that comparison. That doesnt make a monopoly.

If you are looking at combining Yahoo and Microsoft, those are two of the biggest players in the industry. That would be like combining Apple and Microsoft or Clear Channel and Cox Radio. The combination of the two would significantly unbalance the market share for the combined media. Sirius/XM do not.

Ryan
I am surprised you are so easily swayed by a non-argument. “It’s a merger to monopoly and it will set a precedent” isn’t an argument, it’s a statement. It’s the same non-argument and statement that the NAB and their surrogates have been making for over a year now. I guess it proves one thing, if you keep making the same statement over and over, then some people will be fooled into believing its true.

You’ve been fooled. Don’t be a fool.

Jack

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It has been almost one year since Sirius and XM, the only two companies licensed to provide satellite radio in the U.S., announced their intentions to merge. To say that this proposed merger is problematic is an understatement. (THIS IS WORSE THAN THE U.S. HEALTH CARE SYSTEM, FOREIGN POLICY, RISING FUEL PRICES, AND CURRENT HOUSING MARKET CRISIS --COMBINED!).

In the first month following the merger announcement, four congressional hearings were held. Subsequently, more than 80 members of Congress, state attorneys general, and numerous consumer interest groups and other entities formally opposed the merger, pointing out that it is a two-to-one merger creating a monopoly with harmful effects on other firms and consumers.
(CONSUMERS COULD POTENTIALLY BE KILLED IF THIS MERGER SHOULD PASS. THEY ARE NOT SMART ENOUGH TO THINK FOR THEMSELVES. THEY HAVE TO BE PROTECTED BY THEIR REPRESENTATIVES.)

But not all interested parties opposed the merger. Many have seen it as an opportunity for private gain. (UNLIKE THE GENEROUS REPRESENTATIVES THAT ONLY TAKE MONEY FROM THE BROADCASTING INDUSTRY AND OTHER SUBJECTIVE PARTIES, IN ORDER TO FEED THE POOR. HOW DARE SHAREHOLDERS BUY STOCK IN COMPANIES THAT HOPE TO CREATE VALUE?)

But hopefully there is not a hesitancy to act by the Justice Department because of concerns about losing an antitrust case. This case is not even a close call under the antitrust laws — it's plainly a merger to monopoly. (AFTER ALL, THERE IS NO GRAY IN THE WORLD. ONLY BLACK AND WHITE. THAT LOGIC CAN NEVER GET US INTO TROUBLE, RIGHT?)

Moreover, it is an important case with great precedential value. Indeed, the Justice Department decision on the Sirius/XM merger is the litmus test for everything that follows, including Microsoft/Yahoo. (FORGET THE FACT THAT EACH CASE SHOULD BE JUDGED ON ITS OWN MERITS. FORGET THE FACT THAT THESE TWO COMPANIES HAVE NEVER BEEN PROFITABLE. FORGET THE FACT THAT THEY HAVE HELPED TO CREATE AN INDUSTRY THAT LISTENS TO THE CONSUMER.) If this case does not provoke antitrust enforcement from the department, no forthcoming merger proposal could be ruled impossible. (AIN'T I A GENUIS?!?)
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Make no mistake about it. If the merger is denied, Sirius and XM will sue. They need scale to make this thing work for the shareholders, customers, and the industry.

Monopoly?!? Monopoly is a game!!! As Ryan has stated, it already is two monopolies as we speak!!!

This is getting to be a joke. Maybe Orbitcast should add a word to its slogan…

All Things Satellite Radio - XM, Sirius and beyond... Ridiculous.

In one of Kevin Martin's most recent statements, he indicated that the merger would probably be considered in a narrower context. By doing so, the DOJ gets off the proverbial "hook" for now by not setting a broader market precedent that "may" open the flood gates of media consolidation for which these damn government bureaocracies are inept and underfunded to handle. Thus, the DOJ and FCC will continue to "coordinate" with eachother to set certain conditions in order to appease the most groups as possible without overburdening the merged company. The end result will be a regulated "monopoly", although I wouldn't define it as such but it allows the government; the "public interest" groups; and all of the minority entitlement junkies a piece of the pie. There is no doubt in my mind that the merger will go through and the overall investing community is emotionally selling these stocks, but my fear is that the resulting merged company will resemble a Mr. Potato Head toy after a group of toddlers get a hold of it.

It is considered a monopoly because only two companies make up the satellite radio industry and they are planning on merging.

In fact, it fits the textbook definition of a monopoly exactly. I think the concern of precedence is valid. Imagine a world in which this merger goes through and any company can merge with anyone else because they can point to other industries they compete against... scary indeed.

Great. Now we get to read posts by merger advocates saying all arguments against it are "non-arguments." Even if they reach a decision, will anyone be happy, and will the whining and complaining stop? Who gives a dam - this is all about merger, monopoly and money, not making better radio for the subscribers. The real issue is how irrelevant SDARS will be in a year or two.

@jack: I'm still very much PRO-merger, but understand that this isn't nearly as cut and dry as we all would hope. The DOJ (and the FCC) need to be very careful if they approve this deal, because there is a massive precedence set in place if they do so.

In my opinion, I think they WILL approve the merger and it's exactly for this reason why it's taking so long.

The way we do business, the way media is, the everything is treated is changing at an extreme pace. The DOJ needs to not just consider the rules of the past, but figure out the implications of the FUTURE.

And that's hard.

The Grinch said, "Who gives a dam - this is all about merger, monopoly and money, not making better radio for the subscribers. The real issue is how irrelevant SDARS will be in a year or two."

I give a damn! I have 4 Sirius subs but when I bought my new Honda, it came wth XM integrated into the NAV system. I don't want an aftermarket system in my new car so I'm paying for a NEW sub with XM at full price. With the merge, I should be able to add it as another sub (giving up one of my current Sirius radios) and save money. Additionally, I'm missing some of the programming I like on Sirius (XM has some good stuff too). My radio won't support ala-carte but Sirius and XM could then transmit additional content to each other's systems BEFORE uplink to the SATs.

Secondly, you wanted to know who will care about SDARS in 2 years? That comment makes no sense as most all the OEMs have contracts extending out more than 5 years, some much longer. SAT radio will be a defacto standard in all cars and trucks in the years to come with penetrations at Chrysler, Ford, GM, Toyota, Nissan, etc already up to 70% or more in many cases.

It is considered a monopoly because only two companies make up the satellite radio industry and they are planning on merging.

In fact, it fits the textbook definition of a monopoly exactly."

But why? Only because Sirius and XM both utilize a sat? All of their content is available elsewhere. Why does it matter that their content is delivered over a sat. versus the internet, or Ipods, or cell phones, or Slacker, etc?

Is Hooters in an industry by itself because their food is delivered by hot women in revealing clothes? I guess you right, they are in a completely separate subset of the restaurant industry because their method of delivery is different. They deliver food NOT by grumpy teenagers with zits, like TGIFridays, but by hot women in revealing clothest. Damn, Hooters is a monopoly! They need to be broken up.

Sad to see another 'bought and paid for' person at that level.

The merger will be approved WITH conditions of a la carte, a piece of spectrum given out to non-profit, and probably a price freeze of some kind. That way, when others come to ask for similar mergers in the future, the precendence arguement will be weakend by the 'strings' they put in place.

Can't wait for my XM/SIRI combo receiver!

Wait ... I'm confused. How exactly does a $13/month luxury radio service relate to a $300 billion Microsoft-Yahoo merger? Do we shop for Howard Stern the same way we shop for operating systems and online services?

I'm glad you bring both sides rather than just show the pro-merger side that would be easy enough for you to do.. my feelings are clear as always, I agree with the author of this article and had read it yesterday and was waiting for you to post on it here.. simply put it is, when you look at it in the purest sense of two satrad companies merging into one, a monopoly.. and I have said all along that yes there are other forms of entertainment out there from i-pods to tv, dvd players and everything is vying for your dollar.. they signed a no merger clause when they signed to start the companies and while the owners of XM would rather not try any more they should have sold the company to someone, rather than subject the company to a likely failure that seems eminent...

And yet another idiot in the government that knows zilch about satellite radio or does not mention the provisions that Sirius/XM have already said they were going to make. Just keep in mind these are the same idiots in the government that are going to send me a check to help the economy and spend 42 mill $ to send out letters to tell me.
Enough with these articles- Let's just get this approved once and for all!

I like how everyone who says that there should be a pro-merger so they can have their combined radio. Hasn't already been ruled that there should have been a combined radio to begin with.

And this whole argument of how it is delivered is pointless if you don't allow terrestrial and the cable/telcos to merger with themselves. So satrad competes with terristrial/ipod. Therefore we let satrad merger. On that case, CC and CBS Radio can come around and argue the same and should be allowed to merge for that competition. Then Microsoft/Yahoo or Apple/and whomever they buy can allow to merge to compete with CC/CBS and XSirM. And on the cable side, Comcast and Time Warner can make the same argument since there is DirectTV/Dish, which wouldd allow those two to restart a merger, and Verizon/Sprint/ATT to compete with both the dish/cable and XSirM/CC/CBS/Microsoft/etc. That's why the merger is not in a rush and rather have the two companies back out rather than make a decision that could cause that. They are ok with XM/TimeWarner or Sirius/Apple since that has already been defined with NewsCorp owning into different medium. The question is to allow same medium to merger to compete with other medium.

@Ryan -- re: Cut and Dried -- Dick Thornburgh is actually speaking to just how cut and dried it really is -- there is zero doubt that this merger creates an unregulated monopoly and therefore, should NOT be permitted. This case is as clear cut as any could be -- and I think that is one of the key points he is making.

It seems to me that the people who think it is cut-and-dried, for the most part, oppose the merger. It is the pro-merger side that sees the wiggle room, as they must -- because it will take a hell of a lot of wiggling to make this thing fly.

Where have you been former AG? Nice of you to chime in sir! "This case is not even a close call under the antitrust laws -- it's plainly a merger to monopoly" Care to share some objective legal analysis for your position? No? Cases that are not "close calls" do not undergo the level of scrutiny on all levels of business and politics that this one has. Your opinion would carry much more wait to an anti-trust lawyer like myself if you didn't use such "emotional and bias" sounding phrases such as "...not even close". These are the words of an adversary not an objective legal observer.

>>> "This case is not even a close call under the antitrust laws -- it's plainly a merger to monopoly" Care to share some objective legal analysis for your position?

>>> Your opinion would carry much more wait [sic] to an anti-trust lawyer like myself if you didn't use such "emotional and bias" sounding phrases such as "...not even close"

Perhaps you would like to share some of YOUR objective legal analysis? That is, being an antitrust lawyer like you, perhaps you could explain how the former AG is wrong?

cool, i thought he was dead

Stack Pointer: I would love to respond with an objective legal analysis if I could offer a new angle on the most exhaustively analyzed merger case I have ever observed. Your response reveals the underlying bias you have against the merger, which is exactly the point I was making about the former AG. No where in my earlier comment did I suggest the former AG was "wrong" in his analysis, but somehow you took my statement as an attack on the former AG's position which I most certainly did not. I was merely raising the issue of bias one way or the other by shedding light on his word choice not his position, i.e. NAB biased statements, Shareholder, etc. Obviously, I have no information about any potential bias the former AG may have, but I am always critical of conclusory and emotional statements such as the ones made by Thornburgh.

FUCKING ASSHOLES, THEY DON'T DO ANYTHING ABOUT THE TERRESTRIAL RADIO MONOPOLY.

FUCKING ASSHOLES, THEY DON'T DO ANYTHING ABOUT THE TERRESTRIAL RADIO MONOPOLY.

FUCKING ASSHOLES, THEY DON'T DO ANYTHING ABOUT THE TERRESTRIAL RADIO MONOPOLY.

Forgive me, but what does any other *potential* merger application have to do with XM/Sirius? A monopoly consists of one company in an industry. Radio is an industry. Satellite radio is NOT and industry.

This is two radio companies coming together because they have a similar distribution technique. End of story. There is no "single industry" because no industry is defined solely upon the basis of how it charges its customers.

Let's just say for a moment that you eliminate the satellite argument. Imagine Sirius and XM live life on the ground. They only use their terrestrial antennae. Then what, are they less of a monopoly?

The ONLY thing anyone says that is different is that the companies have a unique way of filling in coverage gaps that do not exist with those stations using traditional antenna-only distribution. SO WHAT! If anything, it makes radio MORE accessible to people who don't live in big cities. Terrad gets just about everywhere, and as such, there is very, very little difference in geography that cannot be reached.

The marketing myth of satellite radio has the wool over your eyes. The Former AG has nothing about this right. To even talk about Microsoft/Yahoo in the same sentence shows the ignorance of this case.

Approve this damn merger, or deny it so we can get the court case under way.

Mat you are obfuscating and confusing the argument. Assume the two satellite providers are ground-based terrestrial broadcasters. If those two broadcasters are the only two in town, and they merge to become one, they are a monopoly. There is no other local broadcaster from which you can get service. The merged company can bone the advertisers for higher rates, they can cut content quantity and quality. They can even close on Thursdays and Fridays if they want to.

>>> No where in my earlier comment did I suggest the former AG was "wrong" in his analysis,

Respectfully, I disagree with this comment -- you DID say that he was wrong -- at least, that's how I read it.

He said it wasn't even a close call. You said, "Cases that are not "close calls" do not undergo the level of scrutiny on all levels of business and politics that this one has" -- thus, you are saying it IS a close call while he was saying it is not.

I do have an anti-merger bias, but primarily because it is obvious to me that it should not be permitted because it will create a monopoly where free enterprise would better serve the interests of consumers. I also think XM's shareholders aren't well-served by it, but that's a different issue that isn't of concern to DOJ, I suspect.

In the former AG's defense, I would say that one must consider the forum and the intended readership. This was an editorial piece in a newspaper, which is probably not where a true legal analysis would be useful, or for that matter, be printed in the first place.

One thing is sure -- if this merger is approved, the legal journals will have all the legal analysis you could want for some time to come.

LB - if you're really an antitrust lawyer, you wouldn't expect the former AG to launch into a long explanation of his antitrust reasoning in a 400 word op ed. Its just no practical in that forum. Suffice it to say, he's probably sent a longer analysis to the decision makers.

@Stack: There's *always* wiggle room. ;)

No merger is going to be permitted. Oh yes, Sirius will go to court, but not as the Plaintiff. They'll be Respondents in the action filed by the Dept of Justice. No merger is going to happen and this thing will take another year before its ultimately put to a long-overdue death.

Atty Gen. Thornburgh, bought and paid for or not is still one of the most intellectually honest individuals and - most importantly- listened to individuals in DC. A lot of influential power there.

No merger. Let's move on to bankruptcy for both.

@Grinch

I'm neither obfuscating nor confusing anything. If they didn't have their birds, and transmitted nationally using some big-ass antenna, then they are directly competing with all your local stations. If it's one or two companies, there is still not an industry monopoly because this deal does not close down a single terrad station, does not change the format of any terrad station, and does not prevent anyone from listening to a terrad station.

If Sirius and XM didn't exist, your ecosystem of radio would be exactly the same, right? If so, you have no leg to stand on. All you're doing is having one radio company broadcast using a satellite instead of a tower all the time. They just use towers most of the time, and fill in the gaps with the birds.

Wait, who is boning whom? You're worried that a radio company with just 5% of the market is going to magically have superior ad-selling leverage? Oh gag me. If a company wants an ad on radio, they have a choice. They will still have a choice.

And oh, by the way, you're supposed to be protecting CONSUMERS, not lame ad agencies that would rather change my service.

I like cheese on my hamburger.. and pickles.. is american idol on tonight?? I wish they would bring back gunsmoke...

The merger only benefits the stockholders and “powers-that-be” at XM & Sirius. Consumers will get screwed and many people at both operations will lose their jobs. ‘Nuff said.

The argument is valid but not for this particular merger. The Satrad industry has determined that it can't compete with each other and all the other forms of media terr. radio, ipods, internet radio. If it isn't allowed to compete it dies and then there are fewer choices for the consumer the very definition of anti-competitive. Which should be the only measure to decide.

Precedence is only to be used as a guideline not law each merger needs to be done on it's own merits. Media consolidation is a concern because of the ability to influence the public but satrad is more ent. than anything it also just repurposes already provided news content cnn, foxnews, msnbc.

Chris - Your argument is valid. If one of the companies were to go bankrupt if not allowed to merge, that would be a valid justification for approving the merger. Its called a "failing firm" justification. Like when the NY Post and its two TV stations were allowed to be sold. However, and this has been covered many times, XM and Sirius have NOT told the FCC that one or both of them need the merger to survive; they have specifically not offered a failing firm justification for the merger. And despite the various statements by Women in Farm Economics and the other groups that XM and Sirius have paid off to support the merger, or Jim Cramer, or anyone else, all that matters is that XM and Sirius have not made the failing firm case to the government, so the government just can't consider that as a factor in reviewing the merger. Its not anyone's fault other than XM and Sirius that the merger hasn't gone thru much faster. If they had been honest with the govt, it would've gone much faster.