ALLOW THIS MERGER!

Jon, Retract your letter immediatley.
Satellite radio is THE ONLY saving grace in the entire radio
spectrum.  It is the only forum for true free speech and robotic DJ's that play the same music over and over.  There
is no FCC control over the content, no commercials and
the price is very reasonable.  This is not a case of
"bad" media consolidation.  In fact the merger is probably
the only way this free speech/free music outlet will continue to exist.
There is no reason to protest this, in fact you should read
why the NAB is protesting this.  There is in fact competition
from terrestrial radio, and many other forms of Internet radio,
and mp3 player.
Now if XM or Sirius was being taken over by Clear Channel or
some other large terrestrial then I would question it.  My
fear is that is this merger is denied, both companies, who
are currently loosing money, will go bankrupt, and a Clear Channel
or some other media conglomerate will jump in.
Please retract your letter immediately.

Just for your information I am a Sirius stockholder and a lover
of Satellite radio.  Maybe you should be too.

Allow Sirius / XM merger!

Although I support almost all of Common Cause's causes, this is one that I think you are wrong about for a couple of reasons. For starters, the analogy between radios in cars and televisions in homes is not particularly meaningful. Car owners don't have the same interest in radio that home owners have in television; listening to the radio in one's car is more a function of having to be in the car for the purpose of transportation than choosing to be in the car for the purpose of entertainment, so your analogy that satellite radio is like cable is somewhat less than accurate.  Second, unlike television owners, car radio owners have free access to a plethora of AM and FM stations that offer a wide variety of information and entertainment options; home owners without cable or satellite typically have only a handful of broadcast stations to choose from.  Remember, too, that the "public interest" choices that you (reasonably and responsibly) advocate for that are required of cable providers as a condition of their licensing, aren't available to people who don't subscribe to cable. (And, as you surely know, aren't widely viewed even by cable subscribers.) But, most importantly, unless the proposed Sirius/XM merger is allowed to go through, it is not likely that either company will ultimately be profitable enough to succeed in the marketplace. Satellite radio is a niche alternative entertainment medium that requires purchase and installation of optional equipment. Neither company has achieved sufficient market penetration to guarantee the success of their format; absent consolidation, it is more likely than not that both will fail, and that would be more of a tragedy than allowing their merger.

Finally, blocking the merger on the basis of your "slippery slope" argument fails because of the uniqueness of the merger. There is not a sufficient similarity between satellite radio and any other media enterprise for a media empire to successfully make the argument that because Sirius and XM were allowed to merge, so should they. Newspapers, cable companies, and local broadcasters are all very different from satellite radio. Because of its status as a niche product, neither killing satellite radio nor allowing it to fluorish will have any impact on the success or failure of any other form of media content delivery, nor should allowing the merger be a dispositive reason for other proposed media mergers. Media mergers are typically done as a way to control viewers' (or listeners', or readers') access to information while simultaneously increasing the profitability of their owners. Because satellite radio is a nationally distributed media, allowing Sirius and XM to merge only increases the choices to those who choose to subscribe to the service, it doesn't reduce them. If you want to advocate for including some sort of public service programming (NPR or PRI, for example) as one of the choices, you have my support, but you'd better check with the folks at NPR (or PRI) first, to make sure that this is an option that they support!

In the meantime, although I thank you for your concern about media mergers and the consolidation of empires, I believe that this is the rare case where consolidation does not represent a danger to any sort of freedom or liberty, nor does it stifle anyone's voice or perspective. Rather, it provides the most likely avenue for profitability for a fledgling niche product, which represents that medium's best (and, likely, only) chance for survival.

Allow the XM-Sirius Merger

In the case of the Sirius/XM merger, the companies have agreed in the past to allow regulation of their industry in order to effectuate the merger. That could of course go by the wayside but having two companies makes little sense to the subscribers. They have to subscribe to both stations and own multiple devices to get all of the satellite radio programming. A merger would allow all subscribers to have access to all of the satellite radio programming with a single subscription and a single satellite radio device.

The programs being transmitted would be in competition for the satellite radio audience and work to satisfy the demands and interests of that audience. If the audience is not satisfied with the programming offered by the merged Sirius/XM station then they could chose terrestrial radio, HD radio and podcasts-- all of which are free. What could be more competitive than that?

I am typically opposed to media consolidation but in this case I believe that it makes sense to consolidate the two companies. If the merged company is federally regulated then there is little concern for the public. Of course I do not trust the FCC to be competent regulators so the commission should be improved upon in order to eliminate concerns. Just because the FCC is dysfunctional is not a reason to prevent a merger that would otherwise make sense. The FCC needs to be improved upon as a separate but related issue.

I am an owner of Sirius stock, although I do not own enough stock to make a significant difference in my financial situation even if the stock increases in value several times. Mostly I feel that people should be interested in having a sensibly merged satellite radio company, not forcing the two companies to remain independent.

I would, for instance, oppose Roger Murdoch or Time/Warner buying either or both companies. That would constitute a dangerous consolidation of media. Having one company own all or most of the channels on the television dial would be a dangerous consolidation of media. What should be done though if every television viewer had to buy a separate TV for each channel they wanted to watch? Some type of merger would need to be considered.

I urge you to take a less obstructionist look at the proposed satellite radio merger and work toward a regulated merger that would benefit satellite radio subscribers. I believe this to be a more realistic and sensible approach.

Common Cause is DEAD WRONG on this issue!

I am both a member of Common Cause, and a Sirius subscriber.  I am VERY disturbed by Common Cause's knee-jerk reaction to this merger.  It shows that the organization clearly does not understand the companies or the technologies involved, and is being motivated more by dogma (no media consolidation, ever) than be reason.

Let's look at a couple simple facts:

1) Both satellite radio providers are losing money, after investing heavily in developing a brand new technology.  Investment in technology is always a good thing, and beneficial to consumers.  Being able to combine their knowledge and resources will only accelerate the development of said technology.  However if they don't merge, it is almost inevitable that at least one of the two companies will simply go out of business, slowing down the pace of technological development.  Furthermore, such an event would leave behind... yes, you guessed it, a de facto monopoly, only one less suited to serving their customers than if the merger had taken place.  Further, such an event is likely to trigger a buyout by a legitimate media giant, be it ClearChannel or Time Warner or what have you - and that's worse for everyone.

2) There is PLENTY of competition in place already, regardless of anything that either of these companies do.  There's FREE terrestrial radio, FREE HD radio, FREE podcasts.  All of these forms of media serve the same consumer in the same market segment.  Sirius and XM are putting forward a pay service to compete with free services - that's a pretty bold move.  To be successful, they'll have to come up with some really good content.  On the other side of the coin, the FREE content providers, if they feel they can't compete, can ONLY blame themselves for producing, frankly, awful content that no one wants to listen to.  Sounds to me like the very essence of healthy competition.

I will say again - Common Cause is DEAD WRONG on this issue.  This is an organization that I have supported whole-heartedly in the past.  But it's time to take a step back, take a deep breath, and actually pay attention to the facts.  I hope to see see Common Cause reversing its position on this in the coming days, or at the very least tempering it SIGNIFICANTLY.  If not, Common Cause will look foolish, dogmatic and ill-informed - all things that will not aid in its larger mission.

Respectfully Disagree with Common Cause

I normally agree with CC, but this is one time they are wrong.   I agree with the previous notes that are proponents of the merger.  I enjoy satellite radio as an XM subscriber.  I would hate to see a world without it which will happen if the two groups do not merge.  

There are more important items out there for CC to spend their time and (our) money on fighting.  Let this one go and support the merger.

Consumers Union on the merger

http://www.consumersunion.org/blogs/hun/2008/03/now_hear_this_electronic_newsl_21.html

Now Hear This Electronic Newsletter, March 27, 2008 Posted by Bob at 03/26/08 01:40 PM

This week the Justice Department's antitrust division gave its blessing to a pending merger between the country's only two satellite radio companies, XM and Sirius, arguing the resulting monopoly won't harm consumers.

Quick: Name a monopoly business that gives consumers great service, low prices, cutting edge technology, plenty of choices. Anyone? Anyone at all?

Okay, forget the "quick" part. Take all the time you need. We'll go make ourselves a sandwich.

Okay, we're back. Anyone?

The simple fact is that monopoly businesses - particularly unregulated monopolies - are by their very nature anti-consumer, no matter what the current Justice Department might think. The whole idea of a monopoly is to destroy all competition in the marketplace, cut services and choices, and then slap consumers with high prices. Everyone knows that's how it works - with the apparent exception of the Justice Department's antitrust division.

The antitrust division's official announcement okaying the deal - while fairly brief - still manages to present a mind-boggling mound of twisted logic, along with a heaping helping of hard-to-believe claims. You can read the whole thing by clicking here.

For a marvelous, point-by-point deconstruction of the dubious arguments presented by DOJ, you should take a look at this article by Washington Post business columnist Steven Pearlstein.

Along with a first-rate dissection of DOJ's nonsensical case for approving the deal, Pearlstein also raises some of the bigger implications for consumers beyond satellite radio.

"It took some doing -- and more than a year of "investigation" - for the Justice Department to come up with its undisclosed evidence and tortured logic to justify this strikingly anti-consumer decision," says Pearlstein. "As precedent, it could be used to justify the merger of ABC with both CBS and NBC, Clear Channel with the Bonneville radio network or even Coke with Pepsi. The message it sends to business executives is clear: If you find yourself in a tough competitive environment, the best strategy is not to find a way to offer better products and services at a better price, but rather to call your investment banker and negotiate a truce with your biggest rival."

We couldn't have said it better ourselves.

We were also particularly struck by just one sentence in the DOJ announcement which, by itself, speaks volumes about DOJ's "process" in scrutinizing the merger.

"During the course of its investigation, the Division reviewed millions of pages of documents, analyzed large amounts of data related to sales of satellite radios and subscriptions for satellite radio service, and interviewed scores of industry participants."

So let's get this straight: The chronically overwhelmed and overworked civil servants at DOJ's antitrust division "reviewed millions of pages of documents" on this one deal over the past year? We aren't sure exactly how the Justice Department pulled that off, but we did a few calculations on what it might take.

Say the total number of pages "reviewed" added up to just the absolute minimum allowed for "millions" - just two million. A "review" of two million pages would require at least 10 employees working on nothing else for a year, slogging through at least 800 pages a day each.

Put another way, the minimal number of those "reviewed" pages laid end-to-end would stretch more than 347 miles, roughly the distance between Baltimore and Boston.

At the same time, the antitrust division "analyzed large amounts of data related to sales of satellite radios and subscriptions for satellite radio services, and interviewed scores of industry participants."

If this really is an accurate reflection of what the antitrust division did in scrutinizing the merger, it is truly one of the bureaucratic miracles of our time. If they pulled off this Herculean task as described, each and every person involved is to be praised and held in awe.

The paperwork aside, we also couldn't help but notice that while DOJ bragged that it "interviewed scores of industry participants," we couldn't find any mention of it interviewing actual satellite radio consumers.

That's more than little odd, don't you think? Wouldn't you think you might want to interview some actual satellite radio consumers before concluding none of them will be harmed by this highly controversial deal that will turn the country's satellite radio industry into a monopoly enterprise?

But we digress.

With the blessing of the DOJ in hand, the only major stumbling block remaining for the XM/Sirius merger is approval from the Federal Communications Commission.

It should be noted that it was the FCC which cleared the way for XM and Sirius to get in the satellite radio business more than a decade ago, but with one very important caveat - the two companies could not merge.

FCC Chairman Kevin Martin has said the two companies face a "high hurdle" in gaining his agency's approval of their merger. We hope he is being sincere.

The FCC is clearly charged with protecting the public interest in its consideration of the proposed merger, but then so was the Justice Department. We hope the FCC takes that charge more seriously than the Justice Department did and rejects this merger as the anti-consumer travesty it is.

Washington Post article

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032503269.html

Out of Tune With Consumers
The go-ahead for the merger of Sirius and XM is the embodiment of BushCheney capitalism, which reflexively favors shareholders over consumers.
The go-ahead for the merger of Sirius and XM is the embodiment of BushCheney capitalism, which reflexively favors shareholders over consumers. (By Daniel Acker -- Bloomberg News)

By Steven Pearlstein
Wednesday, March 26, 2008; Page D01

The latest example of a government bailout of a troubled industry has nothing to do with Bear Stearns. It is, instead, the Justice Department's decision to give the green light to the merger of the satellite radio companies XM and Sirius.

For the past several years, these two companies have been competing so hard for talent, distribution channels and customers that neither has been able to turn a profit, and probably wouldn't have for years. Consumers have been the big winners, with great programming at affordable prices.

All that is about to change now that the Bush administration has concluded that we'll all be better off if these heretofore fierce rivals are allowed to stop competing and concentrate instead on reducing costs, paring down their combined offerings and finally delivering profit to their shareholders.

It took some doing -- and more than a year of "investigation" -- for the Justice Department to come up with its undisclosed evidence and tortured logic to justify this strikingly anti-consumer decision. As precedent, it could be used to justify the merger of ABC with both CBS and NBC, Clear Channel with the Bonneville radio network or even Coke with Pepsi. The message it sends to business executives is clear: If you find yourself in a tough competitive environment, the best strategy is not to find a way to offer better products and services at a better price, but rather to call your investment banker and negotiate a truce with your biggest rival.

The essence of the decision announced Monday by Thomas Barnett, the head of the Justice Department's antitrust division, is that, contrary to all appearances, XM and Sirius really don't compete much with each other.

One reason, according to Barnett, is that when you buy a new car, you don't have a choice of whether to install an XM or Sirius radio. That's because the two radio services have negotiated exclusive contracts with all the major carmakers, who in many cases have cemented these relationships by taking equity stakes in XM and Sirius.

Now you might think that if the Justice Department were doing its job all along, it would have stepped in to prevent these kind of exclusive relationships, which in the long run tend to raise prices and restrict consumer choice. You would particularly want that kind of vigilance in the case of a government-sanctioned duopoly, which is how the Federal Communications Commission viewed XM and Sirius when it granted only two licenses for satellite radio.

But not Tom Barnett. Not only did he turn a blind eye to such "vertical restraints," but now uses them as a justification for approving the XM-Sirius merger, arguing that they eliminated whatever competition once existed in the auto "channel" of the satellite radio market.

The second argument Barnett puts forward is that while some of us consider XM and Sirius as next-best substitutes for each other, most people do not. This apparently is based on "empirical evidence" that consumers chose one or the other service for its exclusive program offerings -- baseball or football or Howard Stern or Oprah -- that aren't available from the rival service. So the choice isn't between XM and Sirius, according to Barnett, but between XM or Sirius and nothing at all.

Anyone in business, of course, will recognize this as a static view of how competition is waged -- it's as if you divide the world into Pepsi people and Coke people and declare the competition over.

It makes no allowance for the possibility that, if you force the two companies to compete, XM might come up with a morning host who is funnier and more outrageous than Howard Stern. Or Sirius, lacking a Major League Baseball offering, might take a chance on World Cup soccer or college lacrosse and tap into a whole new audience that nobody knew existed. The prospects for that kind of innovation will be greatly reduced after XM and Sirius merge and the combined company focuses on protecting its existing hit channels rather than creating new ones to displace them.

Perhaps the silliest of Barnett's arguments is that, since XM and Sirius really don't compete for customers, there will be no real loss of pricing competition after they merge.

As a matter of first impression, it's hard to square that analysis with the fact that both companies charge $12.95 for basic monthly service.

Nor is it particularly convincing that the new XM Sirius will be forced to hold down its prices because of competition from traditional AM-FM radio, iPods and MP3 players and, within a few years, streaming Internet radio delivered over all manner of portable devices.

Obviously, all of these are forms of audio entertainment, just as trucks, trains and airplanes are all ways of moving freight around the country. But that doesn't mean that they are such perfect substitutes for one another that we need not worry if there were only one trucking firm, one train line and one airline.

In the case of AM-FM radio, or even Internet radio, these are services that get their revenue from advertisers rather than listeners, so it's hard to see how they impose much pricing discipline on XM or Sirius. Obviously, consumers have to make trade-offs in deciding between free service interrupted constantly by advertising and a higher-quality subscription service with few or no commercial interruptions. But that's a loose and indirect form of pricing discipline that in the case of TV cable rates, for example, has yielded unimpressive results.

Nor are those iPods and MP3 players ready substitutes for satellite radio. Although they deliver you the music you like and want, you have to know exactly what music you want (as opposed to having a knowledgeable disc jockey choose it for you) and take the time to download it. Even then, you're going to spend way more than $12.95 a month to get the kind of variety offered by satellite radio. And if it's live broadcasts of news and sports you're looking for, then iPods and MP3 players are not much of a substitute and offer no pricing discipline at all.

XM-Sirius is the latest in a long series of cop-outs by the antitrust police, but it's also more than that. As an unregulated monopoly, it is the perfect embodiment of Bush-Cheney capitalism -- a capitalism that reflexively favors shareholders over consumers, rewards financial manipulation over genuine innovation and is never shy about harnessing the power of government to the service of private interests.