FCC Approves Sirius-XM Merger
Space. The final frontier. These are the voyages of Sirius-XM. Its continuing mission: to explore strange new anti-consumer practices. To seek out new revenue streams and crowd out new competitors. To boldly safeguard the dangerous monopoly granted last night by the FCC.
Or something like that.
The Commission approved the controversial merger last night on a 3-2 party-line vote. The nation's only two satellite radio operators have agreed to abide by several voluntarily conditions:
- Consumers will be able to purchase small a la carte packages.
- Third parties will be allowed to design and sell their own receivers.
- Sirius-XM will soon rollout an interoperable receiver that can receive signals from both companies.
- 4% of the new conglomerate's channels will be reserved for public interest programming.
- No price hikes for three years.
The two Democratic Commissioners were receptive to a merger, but voted against the deal after the companies refused to offer strong consumer protections.
"I was hoping to forge a bipartisan solution that would offer consumers more diversity in programming, better price protection, greater choices among innovative devices and real competition with digital radio," Adelstein declared. "Instead, it appears they're going to get a monopoly with window dressing. We missed a great opportunity to reach a bipartisan agreement that would have benefited the American people."Last week, Adelstein told reporters that he'd back the proposed union if the two parties honored a six-year price cap, include digital radio in all tuners, and "make one-quarter of their satellite capacity available for public interest and minority programming."
Both Sirius and XM received their satellite radio licenses from the FCC in 1997 under the condition that they never merge.
Satellite Radio Merger Approved [Washington Post]
Report: FCC set to approve XM Radio-Sirius merger (updated) [Ars Technica]
PREVIOUSLY: XM-Sirius Merger Will Double Monthly Prices?
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Comments:
Monopoly... give me a break. It's essentially a way to listen to music, yeah?
So let's analyze:
FM radio.
AM radio.
HD radio.
Every MP3 player known to man.
CDs.
Tapes. (Apparently people still use 'em)
DVD Audio.
Any kind of internet streaming.
Youtube.
Rhapsody.
Napster.
...I think I've made my point.
@aphex242: You are exactly spot on, not only is it not a monopoly, they directly compete (and lose) to almost all of those formats you just ran off.
The NAB fought this tooth and nail because they don't want the competition that satellite radio gives them, the fact that this whole thing took so long, is such an expose of government hypocrisy, it is embarrasing
No price hikes for three years.
Hint: price hike in three years.
"I'm not going to pretend to be objective here. But politics held this deal up and frankly it's a government embarrassment. I also never got how Sirius and XM were a monopoly given that they compete (and lose) to Apple's iPod and other music choices. Sure, Sirius and XM have a satellite radio monopoly, but it's still a shack in an upscale audio entertainment neighborhood (Apple has the best house on the block). Zoom out a bit and you see a monopoly that's basically meaningless."
it could make satellite radio a stronger competitor to terrestrial radio
Yes I have to agree with aphex242. This is not a monopoly.
A monopoly is control over a product or service. The product/service here is audio entertainment. They have a lot of areas to fight with here. One of the things they considered making them do as a condition was to make the recievers pick up hd radio. Funny how the HD radio group doesn't need to make its recievers pick up sat radio.
This delay was nothing more then the FCC kissings the ass' of the big AM/FM radio stations owners like clearchannel. This should have been a done deal a year ago.
I am not going to pay for radio so I don't care. Its mostly crap.
Finally! I remember being ecstatic about this when it first broke half a century ago. Sirius has BBC, but their music channels suck! Any bets on how long it takes for this to actually go to market....
So long overdue...hey, what were the FCC fines for anyway?
Yes! Satellite radio needs to be able to join together to fight off all the cheap evil Chinese satellite radio companies and provide the best service to us!
Wait, what?
@aphex242: Well, that's the argument that the Satellite radio companies are making. But, I would say that the bulk of radio's programming is real-time. Most people listen to the radio for the news, weather, live event programming, talk shows, and event listings. Personally, I think this is a sign of Satellite radio's demise, and you'll see the network eventually bought out to expand the reach of the terrestrial options.
As an XM fan I am glad to see the merger approved, there really wasn't enough pie to go around for 2 sat radio companies at this time. I am semi worried about programming changes of course, no one wants to lose their favorite station, but I hope the increased capacity of having BOTH groups of sats will bring some cool features to the XM/Sirius company.
@IslandKiwi:
XM had overpowered FM transmitters in their radios and repeaters to cover there poor signal areas and they were misplaced, Sirius had the same but Sirius shut them off when FCC told them so the fees weren't just Sirius.
XM was 16.9Million
Sirius was 2.2 Million i believe
man you guys should read the post tag, and take it literally. That's the way I took it anyhow, that it was a monopoly, in (outer) space.
I sure hope satellite radio stays afloat. Can't stand ClearChannel or regular radio for that matter. And I don't know what I'd do without my Sirius-Faction, AltNation, LftCntr, etc
One good thing about this merger is that customers who listen mainly to content that's licensed to only one provider (I'm thinking specifically of live sports broadcasts) don't have to worry about being stuck with a contract and hardware if those stations move to the other provider.
I got XM a few years ago, mainly so I could listen to Big Ten football and Detroit Tigers baseball games on the east coast. One year in, the Big Ten contract came up, Sirius gave them a better deal, and they switched. I canceled the XM, chose not to make the same mistake with Sirius, and now neither of them have my business. Without either a merger or an end to content exclusivity, there's no way I would consider giving either one another try.
terrestial radio is a joke. What you are paying for with Satellite Radio is no commercials and more programming choices. All HD radio does is give you the same 3 songs and 45 minutes of commercials every hour, but in CD quality sound.
I can't figure out why another company can't license some other chunk of spectrum, blast a few satellites into orbit, and start another satellite radio company to compete. Spectrum is being shuffled around all the time.
I'd personally like to see a new satellite radio company that offers fewer channels at higher quality. XM's variety is nice, but the sound quality blows. I'd rather have 50 music channels at a high bitrate than 200 channels at barely-listenable quality.
I love listening to the old Howard Stern shows they play on the Stern Channels on Sirius. I used to listen in on Stern in highschool with my walkman. How did I ever hide that thing? It was huge.
@gaberussell: There is a massive cost of entry, and there isn't always a chunk of the spectrum available. It's probably the same reason most people aren't buying into Sirius and XM. There's an upfront cost and no guaranteed return on investment.
Space monopoly? Sheesh, if another company wants to spend the cash and throw some more satellites up there they're welcome to it. ¯\(º_O)/¯
Never listened to sat. radio a day in my life, and I get it for free. MYtunes FTW!
Does anyone listen to terrestrial radio anymore? Seriously? Does AM still exist???
I agree. How is this a monopoly? I'm not forced into paying to listen to radio.
They're the only companies who could come up with capital to launch their satellites. Anyone else can do the same, provided they have the money. Give me a break.
But I guess anything can be a "monopoly" if you look at it narrowly enough.
@Pro-Pain: I listen to FM radio. AM seems to work for very local uses. (Traffic information for a specific bridge or highway, for example, or "talking houses" for sale.) It's worthless in terms of sound quality, but if all you're doing is conveying information, who cares if it's not in stereo and it pops and hisses a bit?
It's interesting that Carey calls this a monopoly (trying to make it seem tongue-in-cheek). Aphex242 already listed the OTHER companies that compete with this "monopoly." Let's not all forget that government organization called the Department of Justice that said it wasn't a monopoly and should be approved with NO STRINGS in March.
And let's not forget...this is about an entertainment format. Not oil. Not electricity. Not telecommunications. 16 months to approve a music merger is ridiculous. Personally, I think there should be a GAO investigation of the NAB's lobbyists, the DOJ and the FCC. The hold up of this merger has cost both companies 100's of millions of dollars. Oversight does cost money but it shouldn't halve the value of companies seeking to merge.
Tapes, DVDs, MP3s and CDs are not the same in that what you listen to is limited to prerecorded stuff, and stuff of which you have physical possession.
It is not in any way shape or form a substitute for radio stations (or at least, radio done right...regardless of how it is broadcast), because none of those send you music you would never have requested...therefore none of those are as effective a means of being introduced to new music as radio CAN be (but hasn't been since Clearchannel started spreading like a disease...centralized control can mean homogenization of not just the overall content, but the content of individual channels).
Youtube and internet streaming are not the same in that they are not available in most people's cars (and youtube would be a Bad Idea anyway), and even where they ARE, the only way you've got them outside a small fraction of the country's road network (let alone actual area) is if you have satellite internet set up in your car. This is much more expensive.
The closest thing is terrestrial radio, which, again, doesn't reach the entire country (unless you're into christian talk and spanish-language music), and which does not give you access to the same programming wherever you go.
No...actually the closest thing is terrestrial short-wave radio, but that is more subject to terrain and weather.
There are partial substitutes, but if you want all the capabilities of satellite radio, your only choice is satellite radio. If your only choice in satellite radio is Sirius-XM, then that makes them a monopoly. It is not a requirement that it be something you cannot do without. They are a monopoly regardless of how important they aren't.
SIRIUS-XM WILL BE A MONOPOLY, BY DEFINITION. THIS IS GOING TO BE MORE BAD THAN GOOD.
Yeah, always a good idea to increase your pricing when competing with FREE radio! Why is it that people are so hell-bent on a fixed price? Sirius & XM should be able to raise prices if they need to. Why? Because you don't need satellite radio. If you don't like the price, don't buy it.
Regardless, what is even more baffling here is that by lobbying for these restrictions, the NAB has basically made Sirius & XM more attractive. Consumers now can get interoperable & newer radios, a fixed price, better programming, etc - these are all things consumers couldn't get before the merger. I am at a loss as to why this is considered "anti-consumer" when the merger makes everything better about satellite radio.
By the way, I'm a dedicated Sirius subscriber of the past two & half years. So, I'm not totally talking out my butt.
@aphex242: Do you like tapes and cd's?
Well then tape this d--- to your face, so you can cd's nutz!!!!
Roz, if you haven't heard this one, it's an oldie but a goodie from middle school... and yes, I'm apparently 12 years old.
aphex- please don't get offended, it was just going through my head as I read you comment...
It is a monopoly of one niche of music distribution, but my feeling was more that the reason I wouldn't jump in as many others would was because it creates confusion like it was between HD-DVD and Blu-Ray. I think the most pro-consumer option would be for them to allow their transmissions to be picked up on one standard of equipment, and then customers could pick stations from both services a la carte. The monopoly seems like a step in the right direction, and I think it does compete with other music distribution technologies.
My car came with Sirius radio receivers built in, but it was used so I got no free service. I looked up the prices online, saw it was too rich for my blood. If I drove around a lot, and drove more than 50 miles away from my home, I would splurge on it, but my favorite radio station comes in loud and clear, and it has no commercials as it is a college radio station. If I lived out in the midwest and had to drive around a lot, I would get it, because it's hard finding a new station you like in the middle of nowhere.
The important thing is that in almost any car less than 3 years old, it's about as difficult to install XM/Sirius as an iPod, and of course CD and FM radio are built in. Thus, I think that the competition for the soundtrack in the American automobile is safe and strong, even with this monopoly. If Sirius/XM were to require carmakers who add their receivers to remove FM functionality, or remove the MP3 player jack, then I would get angry.
While we're speculating, are there any plans to offer IP radio in a format that works well with car radios? 3G and WiMax are getting better and better penetration, and I think that someone who drives a lot around different metropolitan areas would benefit from a new type of radio that was less region dependent. Also, I sincerely believe that WiMax, when finished, will cover the last mile that has yet to recieve internet, so it could end up being a cheaper and possibly better alternative to Satellite radio.
@Pro-Pain: If you live near PA, check out WXPN (88.5). They're pretty good. They also have an online music stream. Google it. It's a college, donation-supported station, so it has no ads and very infrequent fund raising drives which they still break up with a good amount of music. They play mostly alternative stuff. It's really good.
@TechnoDestructo: Sure, there are no EXACT substitutes. But, that would be true if there were 10 Satellite players, because only ONE of them would have Howard Stern, etc....
When economists look at whether there is a monopoly, the first thing to do is to define the market. And, to do that, you look to the substitutes that people use when/if one provider stops selling them what they want. FM radio is a substitute for Satellite Radio. They also look to natural barriers to entry -- apart from a big upfront cost, Satellite radio has no significant barriers to entry. (And, since that cost is the same for existing and new entrants, that doesn't count.)
Sure, Satellite Radio typically sounds better than terrestial radio, has a broader range of channels and has a much larger service area. But, they are both basically ways to deliver music and information into a car. And, that's what people buy -- all of aphex242's list does this. (I'm including internet-based services over wireless 3G networks. I regularly stream music to my cell phone into my stereo...)
A monopoly? Let's not get too hysterical. It isn't a monopoly. I, personally, can't stand terrestrial radio, therefore I subscribe to XM. I am looking forward to the merger because then I can subscribe to the smaller ala carte packages. Perhaps a few more facts and alot less overreaction may be in order.
@Pro-Pain: I absolutely listen to radio. In LA we actually have great radio stations, as opposed to NYC where about all I could stand was the NPR stations.
Do you drive?
I would listen to my ipod in the car but don't have the hook up, dealing with cds can get annoying and the radio gives me traffic info and music I would probably not listen to on my own.
Indie 103.1, 98.7, KROQ, KCRW...there's plenty of terrestrial radio to listen to here...
@TechnoDestructo:
+1
This is a monopoly by definition.
To people saying that there are other options, imagine this: say Comcast was the only cable TV provider in the US. Sure there are other options, like internet video, BitTorrenting, renting movies and TV boxed sets, and free broadcast channels. However, Comcast would be the only way to get cable TV. Therefore they would be a monopoly. Period.
In the same way, if Sirius-XM is the only way to get satellite radio (including the exclusive content that they broadcast), then they are a monopoly. Sure, you can buy CDs and fill your mp3 player with all you want to, or listen to FM/AM/HD stations, but if you wanted satellite radio (same programming coast-to-coast), your only option would be Sirius-XM. Only option = monopoly.
Satellite radio is as unnecessary as cable TV. But if Comcast were the only cable TV option in the US, you could be sure that the same people saying Sirius-XM is not a monopoly would be calling Comcast a monopoly.
I hope the a la carte choices are actually broken down some. Even with a price hike later my bill would probably be lower since I'm not going to listen to any channel playing kids junk, christian, country, college football, hockey, stupid DJ/shock jock talk, etc. etc.
News, rock/alt and MLB is all I need.
This isn't any more a monopoly than the Blu-Ray video format is a "monopoly" on the high end home video market.
In May I got notice from XM that my monthly rate was about to double in June so I called an canceled. I don't know this for sure but suspect they wanted to get rid of early adopters who had really good pricing plans (mine was $6.99/month).
I liked XM as they were a big help during the hurricanes of 2004-5, but I suspect these price increases are on the way despite what the announcement said.
I don't blame XM, they are just wanting to make more money like everyone else. I blame the FCC who seem to have sold out the American public long before this announcement. While I love technology, I think the way they are handling DTV is going to be a disaster the way they are selling off the public's airways that the FCC manages, but does not OWN. Older people like my parents are confused and upset but they still vote.
The only option that was interesting was the inclusion of hd radio. Nice of the fcc to cave in. At least there is a chance since 3rd parties can make receivers and that off the bat is one feature to easily pull customers away from official xm radios.
never had satellite radio...
and I never will.
Besides, i can put my own favorites on a mp3 player.
@aphex242: Given your seriously generalized logic, then no "transportation" company should ever have a problem merging...nor any "technology" company (of any kind or segment)...etc, etc...
There are NO other options for satellite radio, period.
@aphex242: There's an argument that this ruling might set a precedent to allow further deregulation of broadcast media, despite the heavy protests from the NAB and the broadcast lobby. They could make the same 'failing medium' argument to challenge market ownership caps in radio stations, meaning the Clear Channels and Citadel's of the industry gain even more stations to run and ruin.
I'm an XM subscriber and am pretty happy about the merger ... so long as they don't take away my classic alternative stations, Fred and Lucy! They're almost the only thing I listen to in the car. (My son is going to grow up with absolutely no knowledge of current music, I think ...)
I love how the dog looks like it's pooping out the xm.