Recently in Radio Category

Of course, the big news today (besides my going-going back-back to cali-cali tonight) was the reaction to the Justice Department's antitrust green light on the XM-Sirius merger.

On the surface, this could be cited as another example of runaway government capitulation towards big business interests and media consolidation, like the FCC's recent revision of the newspaper-TV cross-ownership rules, which significantly tipped the scales towards less consumer choice and more commoditization of media.

One could easily say this about XM-Sirius. In fact, Sen. Byron Dorgan (D-ND) issued a rather...pointed statement which highlights his anger at "this administration's blatant disregard for the public interest" in the media ownership realm."

Dorgan went on to further criticize (rightly) the trend of consolidation in media, and brings up the original conditions of the licenses the FCC issued more than ten years ago:

"There seems to be no limit to the mergers this administration will approve. These two companies were issued licenses a decade ago to provide competing national satellite radio service. Their license approval included a clause that prohibits them from merging into one company...Now the Justice Department has decided the contract they signed can't stand in the way of consolidation. That doesn't make any sense to me."

Well, Senator, it should make sense if you realize that the DOJ's antitrust division reviews tons of mergers and approves or denies them based on their potential to harm the market and not the conditions of their FCC license terms. That part is up to the FCC, which, because it has the combined powers of all three branches of government, can do whatever it pleases, until a court tells it to stop.

When you said that the licenses were issued a decade ago, did you notice that the licenses were issued a decade ago? I realize that's a long time, even longer than a Senator's term in office, but did it ever occur to you that the competitive landscape might have changed, and that there might not be much of a competitive market for two companies that offer pretty much the same product and have hugely expensive operating costs, since you know, keeping satellites in space takes lots of money. Remember Iridium, the Sat-Phone company that the government had to be bailed out to keep their network running so government agencies could use them?

You might also remember when EchoStar and DirecTV tried to merge? It was denied, and those two companies are still lobbing pebbles at Comcast, when (hindsight is 20/20) a combined DBS provider could be offering twice the HD channels at less cost than cable. Instead, they're still competing with each other at pretty much the same price, but not causing any shake-ups in the Cable market. Too bad that merger was denied, huh? Great for Cable, bad for us.

It's pretty clear-cut, Senator. We don't need two Satellite radio companies. We do need more choices in media, though. How about you stick to focusing on why so many terrestrial radio stations have the same owner, serve up the same canned music and news (ever hear of Jack FM?) and well, pretty much suck? At least Satellite Radio plays new music and pushes the envelope. I can hear Bellman Barker or Bob Mould on XM. I might catch the latter on NPR once every few years. Commercial radio? No way. They're too busy playing the latest crap that people won't even pay for.

On the other hand, Rep. Rick Boucher (D-VA) has one helluva clue. From CongressDaily's Andrew Noyes:

Rep. Rick Boucher, D-Va., said he was pleased that DOJ determined the merger does not pose significant competition concerns. He believes the new company will bring numerous benefits to consumers, including the elimination of duplicative programming, which will free up spectrum.

Boucher also lauded the companies' intention to offer multiple post-merger subscription packages. "This unprecedented approach will provide subscribers with more choices and lower prices and will pave the way for a form of content acquisition based on the individual programming preferences of listeners," he said.

 

So, a company that will offer better programming, with more choices at lower prices. Very anticompetitive...if you're Clear Channel.

XM-Sirius is APPROVED.

The merger was approved without conditions despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry.

The combination still requires approval from the Federal Communications Commission, which prohibited a merger when it granted satellite radio operating licenses in 1997.

The Justice Department, in a lengthy statement explaining its decision, said the two companies compete not just with each other but also with other forms of radio and entertainment. Customers must buy equipment that is exclusive to either XM or Sirius, and subscribers rarely switch providers.

"People just don't do that," an assistant attorney general, Thomas O. Barnett, said in a conference call with reporters.

The government also appeared to endorse the argument of the companies that they compete with other forms of audio entertainment, including "high-definition" radio, Internet-based radio stations and even devices like Apple's iPod

Good for USDOJ for rejecting the idiotic arguments of the National Association of Broadcasters. If anyone remembers, they claimed that Satellite Radio was a totally different animal from the nationally-syndicated, homogenized terrestrial radio behemoths and that XM and Sirius competed with each other, but not against AM and FM. 

(apologies for the rhyming. I couldn't resist).

 

Reuters' DealZone Blog reports that Sirius CEO and Howard Stern's chief benefactor Mel Karmazin has voiced hopes that the FCC would rule on the merger by the end of this month.

At the Bear Stearns 21st Annual Media Conference, Karmazin is quoted as saying that he "took heart" about FCC Chairman Martin's desire to make a final ruling by...the end of March.

On the other hand, as Reuters notes, Karmazin has been wrong before on this.

Karmazin's predictions on timing, however, may prove false since the companies have been wrong before. The satellite radio companies previously predicted that regulators would sign off on their their proposed $4.2 billion merger by the end of 2007.

XM Satellite Radio Holdings Inc Chairman Gary Parsons was less specific than Karmazin when he spoke at the Bear Stearns conference. He merely said he was confident the regulatory review was moving forward "in a timely manner."

Smart interpretation of a cryptic comment from Martin, or just another prediction? XM Chairman Gary Parsons was more circumspect, saying that he was "confident the regulatory review was moving forward in a timely manner."

Of course, it's been more than a year (February 20, 2007) that they announced the proposed merger, which would allow the combined company to offer more programming on their combined spectrum and eliminate the duplicate channels that each of them carry.

Considering the glut of radio station ownership consolidation since the 1996 Telecommunications Act and the FCC's new print-broadcast cross-ownership rules, I'd think that anything which strengthens the Satellite Radio option for consumers to avoid the commercial-laden, boring FM radio dial is a good thing. Already, both XM and Sirius have more diverse content than most of the stations in major markets, simply because they have the ability to offer it. Most radio stations, on the other hand, play the same playlists, and often don't even have a real DJ in-house. They're computer controlled.

Sadly, XM also plays more local DC music than any of DC's terrestrial stations.

I'm generally not a fan of monopolies, but this one wouldn't be a bad thing. When you're competing with free, you need all the help you can get.