Trucker Tech

Sirius/XM Merger Approved

It's not like I didn't expect it but, after 17 months, I have to wonder if the window of opportunity, to create one successful satellite radio broadcasting company out of two struggling companies, has passed. After all, a lot of things have changed.

The merger was actually approved on Friday, July 25th, and, in the last couple of days, I've read a few interesting posts, not the least of which was an article in Business Week entitled "XM-Sirius: Land Mines Aplenty". The article outlines "some of the new technologies and services rolled out since February 2007 that will surely make it more difficult for a combined XM-Sirius to compete".

A lot of those opposing the merger did so because they felt that the quality of a merged company would suffer due to a lack of competition. That narrow view, which I can only conclude stems from a lack of information or deeply held bias, almost makes me laugh. While XM and Sirius will no longer be competing against each other, they face stiff competition nonetheless.

Considering current economic conditions, and considering that the American consumer has a wide range of choices in mobile entertainment, a good number of which are free, the success of the merged satellite radio company is anything but assured.

It's my personal opinion that the determining factor in the success or failure of the merged company will rest in the programming choices offered to consumers. First, the programming absolutely, positively, must continue to be varied and innovative. Second, consumers need to have nearly complete freedom to choose the stations they want from each of the providers.

I'll pay a premium for a la carte programming but not if it means that some stations can only be chosen on a "one or the other" basis. If I can't get all the stations I want, I won't continue to be a subscriber; and I'm pretty sure I'm not alone in this attitude.

Way back when the merger was first proposed, the companies offered a glimpse into what the menu of price and content choices might be; I'm not sure if this is what will actually come about, and the menu lacks detail, but it's at least a place to start.

The merger's approved, let's hope the results live up to the hype. 

XM/Sirius Merger Approaches Approval

It's finally been reported that Federal Communications Commission Chairman Kevin J. Martin will support a merger between XM and Sirius. It's about time.

The Department of Justice signed off on the deal back in March with a lengthy statement that began with the following paragraph:

"After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers. The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers."

With that statement in hand it's a bit baffling, at least to me, regarding the reasons behind the delay on the part of the FCC in bringing this matter to a close. It could be that Chairman Martin and the commission had misgivings going beyond anti-trust issues.

Trucker Tech Podcast: Episode 3

In Episode 3, I discuss the soon to be released Slacker Portable Player, the recently released Amazon Kindle, and the relatively recently released Nautilus InCab trucking software application. This subject of this episode's Tech Tip is in regard to laptop hard drive protection and maintenance; a subject no laptop totin' trucker should be unfamiliar with. Finally, I've got a commentary dealing with the proposed Sirius/XM merger. After reading an article that brings up some interesting anti-merger points I just couldn't stay quiet.

Download the Trucker Tech Podcast: Episode 3

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Quick Links

Slacker Portable Player

Amazon Kindle

Nautilus InCab

Nautilus InCab Review

Backing Up!

Laptop Hard Drive Maintenance

What is Defragging and Why Should I do it?

Deleting Temporary System Files

PC Pitstop

The bumper music I use in this podcast comes from the PodShow Podsafe Music Network. Check it out at 'music.podshow.com'. If you'd like more information regarding the songs and artists just leave a comment and I'll fill you in.

My Odeo Channel (odeo/fcbb724b34f9b157)

Another Sirius/XM Merger Update

On Tuesday, November 13th, the shareholders of both Sirius Satellite Radio and XM, as anticipated, approved their proposed $4.6 billion merger. Of course, as I've written previously on both this blog and Life on the Road, this merger is, by no means, a done deal.

Sirius CEO Mel Karmazin continues to hold an optimistic outlook regarding Justice Department and FCC approval saying, during a post-vote announcement, "We look forward to completing the merger by the end of the year." TheStreet.com, however, has reported that both agencies have requested more information from all parties concerned. This request would seem to indicate that the merger might be undergoing "the same kind of treatment that broadcaster Clear Channel has gotten. A year ago, private-equity firms...offered an $18.7 billion buyout of Clear Channel. Shareholders approved the deal in September, but the regulatory review continues."

The FCC is, by rule, supposed to complete their reviews within a six month time-frame but it seems that these rules are really more like guidelines and, as in the case of the Clear Channel buyout review, the Sirius/XM merger review might drag out a little longer. We'll just have to wait and see.

In Addition

I thought that I'd posted this link in one of my other Sirius/XM merger updates but, alas, I can find it nowhere. If you're wondering what the service from a merged satellite radio broadcaster will likely include you can find some answers by following this link:

http://www.siriusmerger.com/uploads/ala-cart-Press-Rel-7-23-07.pdf

This proposal was written up in the early days of merger talks so there's a good possibility that a finalized version will be somewhat different but at least you can get an idea of what would, and would not, be available to choose from.

More on the Sirius/XM Merger

Come Tuesday, November 13th, the shareholders of both Sirius and XM will be voting on a merger. I've written about the Sirius/XM merger before so, if you've read that post, you know that I'm in favor of it going through. XM shareholders will be voting on whether or not to approve the buyout while Sirius shareholders will be voting on the issuance of stock to use for the purchase. If the shareholders of both companies approve the merger, which would result in Sirius issuing 4.6 shares of stock for each XM share and XM becoming a wholly owned subsidiary of Sirius, current shareholders of each company would be getting a roughly 50/50 share in the combined company.

That is, providing the FCC approves the deal. The two primary issues to be decided by the FCC are, first, whether or not a successful merger constitutes a monopoly and, second, whether consumers are better served by two competing satellite radio companies or one merged company.

I think the answers to both of those questions are fully answered in this Heritage Foundation article: Beyond the Fairness Doctrine: Radio’s Fight over the XM–Sirius Merger. Do yourself a favor and read this article 'cause it lays out, in plain English, just how disingenuous the argument against the merger, made mostly by terrestrial radio and their representatives, really is.

After you read that article you should probably hop on over to either XMmerger.com or SIRIUSmerger.com where they've got some decent information regarding the proposed merger as well as a form that you can complete, which will be forwarded to the FCC, so that you can make your views regarding the merger known to them. The message I sent reads as follows:

As a satellite radio subscriber, as well as an avid listener to both AM and FM radio, I truly believe that my best interests, and those of other subscribers and non-subscribers will be best served by approving the merger of Sirius and XM radio. Thanks for considering my opinion when making your decision.

You should probably come up with original language but, if my note mirrors your view, feel free to copy and paste.

Sirius XM Merger Update

Here's what I know about the proposed merger of Sirius and XM satellite radio:

• Wall Street is betting against it; as evidenced by the precipitous drop in both companies stock prices (around 20% for both companies).
• In February, Sirius Satellite Radio Chief Executive Mel Karmazin thought the deal had about a 50% chance of approval; last week he told investors he still expects regulator approval before the end of the year.
• FCC Chairman Kevin Martin and several senators, including Daniel K. Inouye (D-Hawaii) and Ted Stevens (R-Alaska) (the respective Chair and Vice-Chair of the Committee on Commerce, Science and Transportation) have stated they're skeptical that the public would be well-served by a merger.
• The FCC has, in the recent past, been supportive of mergers but they haven't been faced with a situation where it might be perceived that all the players in the game are seeking the opportunity to be the only player in the game.

The licenses issued to the two companies in the '90s specifically bar a merger, and that's a big hurdle, but XM and Sirius are making the argument that technology - unheard of when the licenses were granted - like HD Radio, musical mobile phones and mp3 players like the Apple iPod, have become the direct competitors of satellite radio. When, say XM and Sirius, all the competition is taken into consideration, competition wouldn't be significantly stifled by their merger.

I happen to agree and, because I believe that both XM and Sirius may be doomed without it, I'm hoping regulators choose to see it my way. The FCC will soon be opening the door for public comment and, if they choose to accept comments from the likes of you and me, I'll let you know how to go about making your voice heard.

XM and Sirius Announce Merger Plans

I can't imagine that you haven't heard but, just in case, you should know that, earlier today, Sirius and XM satellite radio announced plans to merge. I don't know about you but, as for me, I'm hoping that the regulators governing such things see fit to allow the merger. There's always the chance that they won't. There's an FCC provision, for example, that specifically forbids the two companies from combining and the deal must also gain approval from the Department of Justice; because of antitrust concerns.

Personally, I think convincing arguments can be made that would satisfy both the FCC and the Department of Justice. In an earlier statement, FCC Chairman Kevin J. Martin said that " the companies would need to demonstrate that consumers would clearly be better off; with both more choice and affordable prices". Well, assuming that programming, currently exclusive to one company, is provided to subscribers of either, there's nothing but upside for you and me. In order for me to hear broadcasts of both the Minnesota Twins and the Indianapolis Colts, for example, I'd have to subscribe to both XM and Sirius. If the merger goes through, I'd be able to hear both for the price of a single subscription. That, in my book, makes me "better off; with both more choice and affordable prices".

It‘s, obviously, far too early to speculate what the deal might mean for subscription prices but the merger could bring down overall operational costs while, at the same time, increasing the pricing power of the resulting company. That would be good for investors and, because the merged company would be more stable, good for consumers, as well. The problem will be in convincing the Department of Justice that consumers won't become the unsuspecting victims of a satellite radio monopoly that continually raises it's price.

The argument against that happening, and the argument most likely to convince the DOJ, is that, as things now stand, the two satellite radio entities are competing with each other as well as terrestrial radio and a growing number of digital audio sources like MP3 players, mobile phones and, even, terrestrial digital radio. Eliminating the competition between the two satellite radio providers will, in no way, eliminate audio competition; which should keep prices low.

"We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Gary Parsons, Chairman of XM Satellite Radio and Hugh Panero, CEO of XM Satellite Radio, in a joint statement. "The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago."

"This combination is the next logical step in the evolution of audio entertainment," said Mel Karmazin, CEO of SIRIUS Satellite Radio. "Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies. The combined company will be positioned to capitalize on SIRIUS and XM's complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders."

There are a number of other potential benefits to the merger. For example, a number of truck and auto manufacturers have struggled with the decision of which satellite radio providers equipment should be offered in their vehicles. With the merger retailers will have "the opportunity to provide a broader content offering to their customers". I think a lot of people have avoided making the move to satellite radio because the radios themselves are only compatible with a single satellite radio provider; if they find they've made the wrong choice they'll have to buy new equipment. The merger will eliminate that concern and, I think, usher a whole herd of new subscribers into the world of extra-terrestrial radio.

Additionally, according to the press release, "the merger will enable the combined company to develop and introduce a wider range of lower cost, easy-to-use, multi-functional devices through efficiencies in chip set and radio design procurement." In other words, the radios should be both better and cheaper.

I guess you can tell; I'm hoping this merger happens. Besides providing better programming choices at about the same price, better and more innovative radios at a reasonable cost, I believe the merger may be the only chance that satellite radio has to survive.