Orbital Decay - Footnote

Kevin Martin is not The Curly R Hall of Fame

I am not simply a disinterested party watching Sirius XM collapse from the sidelines. Not only do I get my NFL news from Sirius NFL Radio, I love the satellite radio model and I want it to thrive. Which is why I opposed the Sirius-XM merger from the very beginning. The Curly R posts a historical footnote to the failure of a bad merger.

Part One: Mismanagers In Space
Part Two: Whew, Looks Like the NFL Will Be Ok
Footnote: My Letter to the Federal Communications Commission

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I do not believe you need a degree in economics or an MBA to figure out that one is less than two. As so it was that when Sirius and XM, flush with cash they did not really have and spending on talent and access like drunken sailors, begged to merge in order that they be saved from themselves, I opposed it, and I followed the Federal Communications Commission case very closely. Below is the letter I submitted to the FCC via their website during the open comment period on this merger in July of 2007:

This merger must not be allowed to happen! This is at once a media merger and a consumer products merger. Consumers have not benefited from relaxed media ownership restrictions in the past decade as a smaller number of large companies dominate each market, resulting in homogeneous programming (as the companies that own the stations face reduced competition and need not take chances to differentiate) and increased barriers to new competition (in this case, another satellite firm that would be hundreds of millions of dollars and years away).

As competitors in the consumer products arena, it is simply not logical and bordering on an objective untruth for these companies to compete on and build their respective brands on sports offerings (baseball on XM, football on Sirius), on-air talent (Opie & Anthony on XM, Howard Stern on Sirius), music selection (the 90s station on XM, the 90s station on Sirius), etc and then state that consumers will actually get a better 90s station if we just stop competing. I am not a sympathetic consumer to the argument that, well we had no idea talent and sports leagues would cost so much and now we're in a hole and need the FCC and consumers to bail us out.

Eliminating like products is the goal of the business. Ensuring that like products continue to compete for our wallets is the goal of the consumer.

If allowed to merge, the combined company will offer weaker customer service and begin to offer tiered pricing, which incidentally Sirius has already started by asking for an extra 3 dollars a month for the 'premium' online internet stream. This is a new tier of service. The tiered pricing Mr. Karmazin has focused on will certainly mean we can keep paying the same and get less, or we can just pay a few dollars more and get what we are used to getting.

Finally, I do not find credible the claim that both systems have the transmission capacity to carry both services, which of necessity would fulfill Mr. Karmazin's promise that we can keep our radios as long as we want and get everything the new company has to offer. XM routinely drops one channel to add one, claiming capacity issues, and Sirius cannot even support the programming they currently have, as many sports events preempt music or talk programming regularly, a situation that caused C-Span to terminate its relationship with Sirius, as Sirius could not promise C-Span an uninterrupted channel 7x24.

This is not a good merger for consumers. Do not permit it. Please do not hesitate to contact me should you have questions, comment or require additional information. Thank you.

Imaginary Sirius XM combined logo from here.