Let's Play Satellite Radio Monopoly

Yesterday the DOJ fired the shot heard 'round the entertainment industry. It paved the way for the long-anticipated merger of Sirius Satellite Radio with XM.

Now the only thing standing in the way is FCC approval which will come -- maybe in a month or so.

But the question is: how will the FCC screw up this merger by mandating add-ons that have little or nothing to do with the merits of the merger?

Let us count the ways.

Don't get me wrong.

Once Sirius merges with XM it will be a monopoly -- the kind of thing the DOJ is supposed to protect us from. But they gave up on that mission a long time ago.

Now, it's all about what kind of monopoly satellite radio will be.

A group of self-serving organizations is pressuring the FCC to restrict their approval of the satellite radio merger. The suspects include Public Knowledge, Media Access Project, New America Foundation, U.S. Electronics, National Association of Telecommunications Officers and Advisors, iBiquity and HD Radio Alliance.

They are up to no good.

Under the banner of Open Access (sounds as good as The Patriot Act, doesn't it?) this group is out to get the FCC to make the satellite radio operators wish they never thought of the merger option in the first place.

They say they want consumers to have the choice of receiving both satellite networks on the same radio.

That's funny.

That's exactly what the two satellite radio licensees were mandated to do when they got their approvals to launch. Somewhere along the way they were allowed to bypass the rule.

Anything iBiquity or HD Radio Alliance wants is also suspect.

They are sore losers. The public voted, re-voted and the radio equivalent of the Supreme Court has ruled and HD radio didn't win. That's not stopping them. They want HD channels mandated on new satellite radios. You know, the consumer pays for satellite service every month then gets what they clearly don't want -- HD Radio -- for the same price.

That's like going to Ralph's and buying a roasted chicken and being forced to take home raw chicken livers at no extra cost.


Terrestrial radio is also acting like a sore loser.

The granddaddy of self-preservation -- Clear Channel -- has petitioned the Commission to give terrestrial radio access to 50% of their satellite capacity. Think about how ridiculous that is? Imagine Clear Channel giving anything up to a competing medium. But you know the routine by now -- the argument is more diversity in programming.

Stop me if I'm wrong here -- aren't satellite customers paying their monthly subscription fees to get diversity in radio programming? Aren't they consenting adults who knowingly have entered an adult relationship with a satellite radio operator?

Oh, I get it -- it's about a declining radio industry wanting in on a business other than terrestrial transmission.

This whole thing has been a farce.

Sirius CEO Mel Karmazin -- with a straight face, yet -- argued that the merger was not a monopoly because satellite radio now has to compete with the Internet and mobile devices. I wanted to bust out laughing.

One more time -- from two into one equals a monopoly. Period.

But that's okay with me if everyone else including the DOJ doesn't mind.

I'm just getting this awful feeling that the geniuses at your FCC are about ready to screw up a business that was already screwed up before the first satellite was launched.

1. Would they have ever considered mandating building terrestrial radios that were also satellite receivers if the shoe were on the other foot?

2. Would they have considered requiring satellite radio on HD receivers -- God forbid -- had the situation been reversed?

3. Would the FCC have considered a demand by, say, one of the satellite radio applicants in the early 90's to force terrestrial operators to give up 50% of their capacity to the emerging new satellite business?

Fat chance.

The terrestrial radio business would have pitched a fit so loud they would have embarrassed even themselves -- not easy to do.

So my advice to the FCC is hold your nose, approve the Sirius/XM monopoly as is and don't play kingmaker with a bunch of sore losers.

I've got an even better idea.

Once approved, do like Mister Rogers and ask Sirius and XM "won't you be my neighbor"?

Because when all is said and done, the only way radio and satellite radio can coexist is if they are under the same tent. And while we're at it, let's add interactive and mobile media.

Divided we fail. United, well -- we become a new growth business.

Either that or keep fighting these parochial battles even though the consumer has moved on.

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