Can XM-Sirius merger stand up to Washington politics?

[Kire]

Can XM-Sirius merger stand up to Washington politics?

July 18th, 2008 - ZDNet

After well over a year of scrutiny, the proposed merger between the country’s two satellite radio providers - XM and Sirius - is finally on the home stretch, set for an approval vote as early as Aug. 1. But wait. This week, one of the FCC commissioners proposed even more conditions - beyond what chairman Kevin Martin has already suggested and what XM/Sirius execs have offered. With Washington politics at play, could the last mile to a vote be delayed even further?

From the beginning, XM and Sirius faced an uphill battle to get this merger approved, notably the matter of a no-merging-in-the-future clause that was established when the two companies received their licenses. But through it all, Sirius CEO Mel Karmazin - the primary spokesman for all things related to the merger - has kept fighting, offering concessions that would merge the channel lineups, protect consumers from price hikes, keep the old radios from becoming useless bricks, set aside a fixed number of channels for non-commercial and minority programming and even establish an a la carte pricing structure.

Finally, FCC chairman Martin - who appeared to be the one who might need the hardest sell on the merger - said last month that he would recommend approval under certain conditions, many of which Karmazin had already OK’d. But it turns out that Commissioner Jonathan Adelstein, one of the two Democrats on the five-member commission, could be the one to hold things up even further. He says he’ll approve the merger if the cap on subscription prices is increased from three years to six; the merged company sets aside 25 percent of the channel lineup (instead of the set 24 channels) for non-commercial and minority programming and that new satellite radio receivers be built with technology that allows them to receive the new HD Radio signals.

Ah-ha. Now, this is all starting to make sense. HD Radio, high-quality niche programming that plays only on special receivers, is the newest offering from the terrestrial radio stations to get listeners back. You see, with all the alternatives to radio out there, listeners have choices - iPods, CDs, streaming radio over the Internet and, of course, satellite radio. And yet, when the satellite radio guys used the same argument to show how a merger of the two wouldn’t create a monopoly, the National Association of Broadcasters, a powerful Washington lobbying group that represents the radio stations, cried foul. (This is the famous you-compete-with-us-but-we-don’t-compete-with-you argument that the NAB was spewing last year.)

Since HD Radio hasn’t really taken off in the mainstream market, maybe forcing the satellite companies to push that technology on to its subscribers is one way to make listeners discover it. (I wonder if Adelstein thought of this himself or if the folks at the NAB whispered it in his ear.)

More: http://blogs.zdnet.com/BTL/?p=9380

This is such a fiasco.

Is it just about as bad as any Wal-Mart coming in and destroying Main Street USA? I don't know, what do you think. the thought came to my mind for some reason.



More ridiculousness here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3397403

and here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3358450

[trumad]

1. It's simply amazing how the FCC became so powerful.

[zanne]

2. Does the name Michael Powell ring a bell?

We knew it was bad news when Colin Powell's son was appointed to the FCC. Whenever I hear the word "merger", I get worried. It can't be good.

[Kire]

6. why can't it be good?

would it be good to kill an entire industry that employs a lot of people completely? that's will happen if Sirius and XM go bankrupt

when you get worried, I find that it can help to learn more about what causes my anxiety

there is a ton of competition in this industry

terrestrial radio, internet radio (streaming and podcasting), iphone radio

there's a lot more here:

http://en.wikipedia.org/wiki/Sirius_and_XM_merger

[ProudToBeBlueInRhody]

15. I'm a consumer of Sirius, and I think it's good

And in the end, for a niche outlet of entertainment like satellite radio, if you don't own one, you probably shouldn't trouble yourself worrying about it. Let the merger go through.

[sellitman]

3. I now stream music through my iPhone.

No need for XM if you ask me. I get AAR and can pick whatever artist I want to listen to.

[chelsea0011]

4. And this is where the phone is headed. It will all be done through it.

I'll have to wait. I use Verizon.

[high density]

5. The latest demands on XM & Sirius are ludicrous

Satellite subscribers do not want HD radio and we do not want 25% of the spectrum given to the "public interest." We are paying for the service because we already like what it provides. The broadcasters in my area simply do not offer the content I want to hear, so I go with an alternative. If they think I'll listen to HD radio simply because the receiver is forced into my satellite radio then they've got another thing coming to them. The problem with broadcast radio isn't the delivery system, it's the garbage barrel content.

[bookman]

7. I agree...

.. it is all about content. I live in the Houston area and it is just right wing talk. I need XM to hear liberal content.

I also have different moods for music from day to day and like the variety.

[Kire]

8. read the filing about these demands

Here are all the concessions:
http://www.orbitcast.com/archives/official-sirius-xm-merger-concessions-made-public.html


someone read the whole filing and posted this bit on the comments in that post:

"The Qualified Entity or Entities will not be required to make any lease payments for such
channels. The combined company is willing not to be involved in the selection of the
Qualified Entity or Entities. The combined company will have no editorial control over
these channels."

this is the pdf:
http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_document=6520029738


Is this a free country or what?

[high density]

12. I'm talking about the latest demands.

The latest demands are:
- 25% of the combined company's spectrum set aside
- Price fixes for 6 years
- HD Radio in receivers

All of these seem to be excessively onerous.

[Kire]

14. right

I was just clarifying exactly how onerous the previous demands were, the latest demands, as far s the set asides are concerned, are three times as onerous, but they are also completely unfair in the same way they were last month, 25% of channels must be subsidized by the company with no editorial control. Onerous, indeed.

[alarimer]

17. HD radio is just better-sounding shit from terrestrial radio.

The commercials and obnoxious shock jocks will come in clearer or be louder; that is ALL HD radio will. You will still have the same corporate shlock produced, the same shitty music and payola.

Satellite radio is so much better than whatever the terrestrial radio can produce. Maybe these corporations need to look at WHY people are turning to satellite and ipods- it's because their product sucks.

[KharmaTrain]

9. HD Radio...A Total Disaster And The Hidden Hand...

A good source on this issue says the real players behind the merger is Clear Channel and Citadel...the companies who benefit through providing their programming over this system and are privately financing a lot of what's going on. The chances of a Democratic administration and a bigger Democratic majority in the future is the cart behind the horse here...they want the deal done before the commission passes into Democratic hands.

Clear Channel has invested billions into HD Radio...a system using existing analog signals to transmit a digital one. This was supposed to be broadcast radio's answer to HD TV, but the development has been wracked with technical and political messes. The biggest rap is that HD Radio signals are poor at best...they only take up a small fraction (1%) of the analog signal and reliable reception is relegated to just a few miles from the transmitter. The radios haven't sold very well...and the company that holds the patents is using the same business model Apple used in the late 80's and early 90's...controlling licensing that delayed getting radios on the market and then limiting the selection. You still can't get an HD portable radio. Meanwhile companies like Clear Channel spent millions in new equipment...they want some kinda return on their investment.

The largess and arrogance of the big broadcast conglomerates are catching up with them. Their greed has driven away a generation of IPOD listeners and the downward spiral of the quality of their product has driven away older listeners. This is yet another move to try to put off yet another day the large debt and massive failures deregulation has brought about...and the answer for this? More dergulation. Sheesh.

[onenote]

10. Who is your "good source" on the issue?

Because, at least as described, they seem a bit confused.

Clear and Citadel are not the big players "behind" the XM/Sirius merger. They are opposed to the merger. They are, however, supporters -- particularly Clear -- of imposing conditions on the merger if it goes through, including the condition requiring interoperability w/HD radio. They aren't trying to get deal done before the Commission passes into Democratic hands -- Jonathan Adelstein, A Democrat on the FCC, is the most prominent advocate of the Clear Channel position: http://arstechnica.com/news.ars/post/20080719-fccs-adelstein-backs-sirius-xm-merger.html

[KharmaTrain]

11. Clear Wants A Deal Done...

So does Karmazin...each for their own reasons. Yes, CC in specific has pushed for the conditions and still does...as, I pointed out, they hold a lot of the important programming that a future service needs and has either directly or through former incarnations (Chancellor Media and Tate-Hicks-Muse) have invested a lot in getting satellite going...while not directly tied, there's a lot of their money that is invested here. There's a reason these connections are so confused...there are some hands that are involved in both sides of this deal.

My point...and sorry I wasn't clear, is that the large broadcast corporates want to keep satellite a secondary service...and use both their money and political influence to control as much of the public airwaves and other venues as they can. Martin works on behalf of Loewry Mays...who has all but brow beaten Karmazin and others to get this thing done once and for all. Be assured that if Michael Kops takes the helm of the FCC (and I look forward to that happening), the rubber stamp days of the Clear Channels will be over.

The source is from the broadcast world...who has long opposed both satellite and internet and has been following XM and Sirius since they were on the drawing board. Clear Channel has invested a ton in HD Radio and are seeing the investment go into the dumpers.

[onenote]

13. thanks for the clarification

I agree that Clear and other radio broadcasters want to keep satellite in a secondary position. One of the more outrageous aspects of the broadcasters postion, imo, has been their opposition to the evolution of satellite radio as a more localized service. After years of simultaneously wrapping themselves in the "localism" mantle (claiming that they provide a unique local service) and trying to avoid the local programming obligations that should go with using the public airwaves -- the broadcasters are opposed to any attempt by XM or Sirius to provide locally oriented news or weather.
Pretty outrageous -- and they are definitely scared of what Democrats will do with respect to them on local public interest requirements.

[Kire]

16. NPR wants more conditions in Sirius-XM merger

NPR Weighs In On Satellite Merger

July 16, 2008

National Public Radio (NPR) is the latest organization to contact FCC Chairman Kevin Martin about the proposed satcaster merger. In a letter sent to Martin earlier this week, NPR repeats its position that the merger "would undoubtedly diminish viewpoint diversity" and calls for HD Radio integration into future satellite radio receivers.

NPR CEO Dennis Haarsager says in the letter that public radio has been at the forefront of HD Radio broadcasting and "a merger condition requiring the inclusion of HD Radio technology in all new satellite receivers would ensure a competitive market for digital terrestrial broadcasting, while preventing monopolistic market forces from squeezing out this growing service."

As for the requirement that the merged XM and Sirius offer part of their combined spectrum to other broadcasters, Haarsager says, "Reserving an appropriate percent of the satellite radio spectrum for programming from non-commercial public and minority broadcasters will contribute to the multiplicity of voices that is an inherent component of the dialogue of America’s democracy."

Meanwhile, House Subcommittee on Telecommunications and the Internet Chairman, Rep. Edward Markey (D-MA) also sent a letter to Martin. Markey said the proposed merger is "an extraordinary request compels the Commission to adopt several extraordinary conditions if it wishes to approve the merger. In my view, without meaningful, enforceable conditions, this proposed merger should be blocked as inconsistent with the public interest."

More: http://www.fmqb.com/Article.asp?id=794358

The two NPR channels are my favorite news/talk channels on Sirius. I don't get good reception in my house for any terrestrial NPR station.