As I'm reading coverage on the XM/Sirius merger, there's a common point of reference being brought up when the media looks to find prior parallels, and that obviously is the EchoStar/DirecTV deal.Understandably because the two seem very similar (I used it myself in the past). Echostar/DirecTV is afterall probably the only precedent to work with. Both involve two companies, broadcasting via satellite, and the only difference is that one does video, while the other does audio. Sounds simple right?
Except that in 2002, the definition of the "relevant market" involved only satellite and cable (also known as the MVPD or "Multichannel Video Programming Distribution" market). Even "free" television is delivered through satellite or cable because receiving television via the ol' rabbit-ears just isn't a viable alternative (so much so that in 2008 the FCC is selling off the VHF side of the spectrum).
EchoStar and DirecTV used the argument of spectrum, and the fact that both companies use the same spectrum for "overlapping programming services," as their main case for why they need to do their merger. They felt that by combining their spectrum, there would be a more efficient use of the available spectrum, and thus they would be able to provide better services to the customer. In terms of pricing, EchoStar/DirecTV would promise to keep their pricing inline with the overall national price of MVPD services. In short: the merger would give them more bandwidth and they promise to stay competitive. So with only satellite and cable occupying the same space, what is the alternative to consumers who cannot receive one of the two? Cable is fragmented among multiple companies so there's no monopoly there (an arguable point, but I won't get into that), whereas with satellite TV there would be only one player. It would create a monopoly in areas where there is no cable service - and so it wouldn't be "in the best interests" for the public.
There was no YouTube (which even to this day is no where near 'competition' to TV) or Slingbox (which still requires a subscription to cable/satellite) or MediaFLO or video via mobile phones, etc. The Internet and other high-speed services did not provide any reasonable level of a service to be considered as part of the relevant market. EchoStar/DirecTV were without question part of the MVPD market, and even with the advance in technologies it's a pretty hard case to try to redefine their competitors. But the main problem with the EchoStar/DirecTV merger attempt the argument of spectrum efficiencies just wasn't compelling enough for the FCC.
With satellite radio, there's plenty of coverage from terrestrial radio, not to mention all the other mediums vying for your "earshare" (I really like that term by the way). And the competition for satellite radio is largely free competition, not other pay-services. So prices are theoretically kept in check by the laws of good ol' capitalism (rather than mandated, though I'm sure XM/Sirius are open to government mandated pricing restrictions). XM/Sirius have two main hurdles they need to overcome to get this to pass: Redefining their market (DoJ) and ensuring that they're serving the public's best interests (FCC).
So when Michael Powell says, "It’s going to be incumbent on the companies to demonstrate that the analysis in EchoStar-DirecTV is different." Then that case is pretty much a slam dunk.
Ryan - On Howard's show this morning Mel specifically stated that if you look at any terrestrial radio company's annual report, in the competition section it clearly states that these companies compete with satellite radio.
How do you like that! Great job man!
Cable is finally getting real competition with Verizon. Finally Hockey fans will have a choice. Oh wait we weren't going to get into that. :)
I saw this earlier but CSPAN-2 will air a discussion/interview about the Sirius/XM merger at 10pm tonight. For some reason their schedule is not loading anymore.
http://www.c-span.org/
Lobbying played a large part in the Echostar / DirecTV merger. News Corp. had spent a lot of money lobbying against this merger. I could see the NAB, Clear Channel and others putting up a good fight on the lobbying front to block the SIRIUS / XM deal.
Actually, they're selling channels 60-69, which are UHF.
Quote - "with satellite TV there would be only one player. It would create a monopoly in areas where there is no cable service - and so it wouldn't be "in the best interests" for the public."
Wouldn't there be an argument about areas without any radio coverage, like parts of Northern Nevada for example. If that person has satellite radio, there would be a monopoly for that particular consumer if XM and Sirius were to merge.
Personally, while Ryan is coming up with comparisons about why this merger isn't like x or y, it appears to me that the merger might be akin to the Sprint/Nextel merger and the problems that have resulted with it.
http://news.zdnet.com/2100-1035_22-6154071.html
Basically, you have two different protocols trying to merge together. I have a feeling we'll start seeing difficulties with this, users will end up lacking increased options or tiered pricing, just one homogenized network using two different protocols.
What will happen as the new merged company starts adding features, such as backseat spongebob videos? People who haven't bought the new dual band radios will start losing more and more content because the bandwidth is being diverted way from each network to make room for the new services. As the listening options dwindle for the older radios, prices may remain the same, but will probably go up. Unless you upgrade, you'll end getting less, and less for while paying more and more.
Just wanted to add: I am currently a DirecTV subscriber, but I am eyeing Dish's new HD DVR, because DirecTV's HD DVR is quite problematic, and doesn't offer the features I want. I've decided to wait until fall to see how each company's HD programming line-ups pan out. Thank goodness their merger was blocked, preserving choice for the customers.
XM Sirius merged is only going to hurt consumers.
The most important thing to remember is that EchoStar - Direct TV were trying to merge a conduit for content provided by other entities. THAT rips consumers off because it provides no alternative. Insofar as satellite radio is concerned, both companies produce the majority of their own content. Combining efforts actually provides more alternatives.
This merger is going to happen.