The XM/Sirius Radio Merger: You're Kidding, Right?

As the hours tick by while interested observers of the XM/Sirius digital radio merger await word on final approval by the FCC, it may be worthwhile to wonder how in the heck we even got here. We're holding our collective breath, but aren't we supposed to be laughing?

The merger of Sirius Satellite Radio and XM Satellite Radio Holdings -- the only two providers of digital audio radio service -- creates a satellite radio monopoly. Look in the dictionary. They have no other entities to compete with in the entire digital audio radio space. That's what a monopoly is.

The guy in charge of this lovely noncompetitive shebang is Mel Karmazin, CEO of Sirius and CEO of the monopoly-to-be. He is a real charmer with a long history of sexism and racism. Some of his finer moments include saying he wouldn't have fired Don Imus for his racist comments last year about the Rutgers women's basketball team. (Don't take my word for it, take his.) He's a great supporter of shock jock and fellow charmer Howard Stern who, as we all know, loves women of all colors--that is, as long as they show him their breasts. Now Karmazin says he will allocate four percent of the public spectrum for coverage of minorities and women. He's keeping the other 296 channels -- a vast amount of spectrum, or enough programming for every local market in the country -- for his own delights. That's peanuts. Maybe he thinks putting Imus on to denigrate African Americans constitutes coverage?

There was a time when the very idea of XM and Sirius coming together was verboten. The FCC itself distributed licenses to XM and Sirius in 1997 on the condition that the two companies never merge. Then in March the Justice Department said nah, a monopoly satellite radio provider would not harm consumers because there are other alternatives for consumers. Not digital radio ones, of course. But they're right -- there are all kinds of alternatives for consumers. They can listen to local radio, or go to the movies, or read comic books. (Can you imagine the Justice Department saying you can't find minority programming on cable TV but you can always put up bunny ears? Hope you kept yours.)

Yet the FCC is now hard at work deciding how to make sure the merger can satisfy public interest standards by setting aside channels for noncommercial and minority programmers. You go right ahead, FCC, think up some nice tight rules to force Karmazin into some kind of position of fairness to women, minorities, and consumers. You've got your work cut out for you.

Comments

[LeaveArtieAlone]

Steph do you work for Somner Redstone? I mean seriously! The merger of the oil companies and telecom companies took way less time than this and THOSE mergers effect Americans WAY more than those who find the satellite merger bad.

Good grief, what the hell is the matter with people. Radio is NOT just satellite! So how the hell is it a monopoly? If you don"t want it you do not have to pay for it, yet amazingly you still have iPod, Internet Radio, CDs, Free FM, iTunes and on and on.

Clear Channel IS a MONOPOLY!!! They own almost every radio station in the USA, yet some how that is conveniently left out! Got love the spin---NOT!

[eleutheros]

This thing has Clear Channel's prints all over it. And to that end, let's just suppose the merger falls through and SIrius and XM go under. That will leave two licenses out there for somebody else to take over, and let's suppose it's Clear Channel or another government friendly company that steps in. Then they will have both satellite and government controlled radio under their belts .... Now that's a monopoly.

[morbie5]

They may have a "satellite radio monopoly" but they don't have a radio monopoly. Someone can always switch over to AM or FM.

If one of them goes out of business because it can't make money (seems likely in the near future), than we will still get your dreaded "satellite radio monopoly."

[NashRBongo]

I would go so far as to say this merger is irrelevant, because the competition is too strong for satellite radio. Why would I pay a subscription fee for their channels when I can stream the radio for free on my iPhone (eventually this will be all cellphones) or computer? I can even get radio stations that are in markets that are nowhere near me. And with programs like Pandora you can essentially make and stream your own custom stations. It's much more flexible and engaging than anything satellite radio can offer. In short the picture is grim. Merger or no.

Btw, Stephanie you may want to look up 'ad hominem attack' before write your next media piece.

[mmike]

Your premise is flawed (at least I think this is your premise...you got sidetracked in your little PSA on Mel)

"The merger of Sirius Satellite Radio and XM Satellite Radio Holdings--the only two providers of
digital audio radio service--creates a satellite radio monopoly. Look in the dictionary. They
have no other entities to compete with in the entire digital audio radio space. That's what a
monopoly is."

Other providers/competitors in the digital audio radio space:

1) HD Radio also known as HD "Digital" Radio
2) iphone/smartphones with unlimited data plans include internet streaming radio
3) 3G digital radio capable automobiles coming to market next year

Satellites are just a mechanism for transmission. There are plenty of competitors that bring
digital content, both local and worldwide, into the home/car/office/portable device through various means.

Also, 8 is the correct percentage Mel agreed to allocate for minorities, not 4.

[satxguy1967]

At least Sirius would have gone out of business in the next few months without this merger, and as a Sirius subscriber, I would have been screwed. I would have had to buy a new receiver that receives the XM signal and pay an even higher XM subscription fee than we will be getting with the merger. This is not an ideal situation no matter how it works out, but at least with the merger, the FCC has some negotiating leverage to make the inevitable transition to one satellite radio provider somewhat palatable. Also, this is not a monopoly if you consider that XM/Sirius will be competing with MP3 players, HD Radio, the Internet, and regular radio for the full audio entertainment market, which I think is the correct way to evaluate it.

[CyberTrucker]

If you want to read a well written and well thought out piece concerning the Sirius/XM merger you might want to take a look at this post:

http://blog.pennlive.com/cyberscribble/2008/07/the_sirius_xm_merger_revisited.html

And here's what Reed Hundt, the Chairman of the FCC in 1997, says about the "no merger" clause he included in the original licensing agreements:

http://www.siriusmerger.com/uploads/FINAL_Hundt_release__00189470-2_.pdf

[Dunnage]

XM and Sirius are actually fighting to survive. Note the price of their shares.

[handyallen1]

pay for radio what a joke, but then again i dont pay for tv either so what do i know

[DRaymond]

To say that Sirius and XM are the only two providers of ditital autio service completely ignores the existence of HD radio. These are two companies that are still going to have a hard time finding a profit. Radio is being crushed by ipods.

[liberalsrheros]

well, i think stephanie wants it both ways. protect the right of speech but her biggest criticism is for those that actually use it.

might be useful to address why, economically, this is a bad idea. whether the gov't has any right to dictate the business practices of a concern that requires it's users to buy special equipment and pay for a subscription service. hardly the public airwaves.

[CyberTrucker]

You have GOT to be kidding ME!! Do you just pick out the parts of a story or issue that sound as though they'll get a rise out of the readers? There's a ton of good posts and articles regarding this proposed merger, some pro and some con, but this post cannot, by any stretch of the imagination, be counted among them.

People, if you're interested in learning more about this merger then do some real research. If you just read the drivel written here you're woefully uninformed.

[RobinSeattle]

Okay, again for the slow of mind:

This merger doesn't happen and it is likely that both XM and Siruis go out of business. So instead of two or one satellite provider you get nothing. Nada. And, according to this inane article, you should like it.

And that is aside form the fact that any other entity willing to get involved in that market can do so, but none have so far stepped up.

As for Stern, yes, he likes women's breasts, like all heterosexual men. You are merely demonizing men for having sex drives in taking this cheap shot at Howard (who I haven't listened to since he went to satellite). It is you who is the sexist here, maybe downright misandryst. And he has probably had a more stable intimate life than you to boot.

As for Karmazin, he is a double talking boor, but what Republican isn't? In any event, to deny the merger based primarily on your less than fond regard of Karmazin is juvenile.

[GerardJones]

Karmazin sounds like just the guy you don't want running a media monopoly, all right. But even if he were a diversity-loving two-fisted progressing, I'd still be appalled that the FCC is apparently willing to allow a satellite-radio monopoly in the first place. The willingness of our present government to allow undermonitored corporate interests to determine what should be public policy goes beyond energy and war and into nearly every corner of our lives. News, music and mass culture are susceptible too. As business combines have swallowed more and more radio outlets I was thrilled to see satellite radio arrive to provide an alternative. Now that's in danger of becoming just another monolith too. Thanks, Stephanie, for bringing this to our attention--and with economy and heat.

[livingsp]

Here's one for the SHEESH meter. I just didn't know about this. So this means that all those people who love satellite radio for all the reasons you can love it (supposedly vast programming, cachet factor, must be more reasons) now have all the choices from A to B. Or maybe A to Aa. Well, on a lot of levels I'm p.o'ed. Plus as a woman, well, this is yet more of us getting stuffed down and not taken seriously isn't it.