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Tuesday, April 03, 2007

NAB Sponsors The Carmel Group Report Against Merger

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By PETER LAURIA, The New York Post, April 3, 2007

The Carmel Group, the influential research firm whose analysis helped kill the 2003 merger of EchoStar and DirecTV, will release a new report today that outlines the strongest arguments yet against merging satellite radio companies Sirius and XM, The Post has learned.

Sponsored by the National Association of Broadcasters, which has already come out against the deal, the 11-page independent white paper includes a point-by-point rebuttal to the six main arguments put forth by Sirius and XM in favor of a merger.

It concludes - in precisely the opposite terms that Sirius CEO Mel Karmazin has espoused - that approval of the deal will result "in less service, less affordability, less diversity and less choice in content and hardware."

A key element of the report, and one likely to be a main focal point for regulators, is the "ping-pong chart" in the appendix, which lists nine actions initiated by either Sirius or XM and the reaction they provoked in the other.

For instance, under "retail promotion," the chart notes that in December 2002, XM launched its first portable satellite radio, which prompted Sirius to do the same just 5 months later.

The chart is designed to show that "competition, even in a duopoly, forces improvements in service, choice and pricing" and that "consumers benefit when Sirius and XM compete to do a better job to earn and retain their subscriptions."

The Carmel Group devised a similar chart in its analysis of the EchoStar-DirecTV merger that is widely credited with providing the foundation for the arguments that the Federal Communications Commission applied in unanimously rejecting that deal.

The report's author, Carmel Group Chairman Jimmy Schaeffler, focuses much of the analysis on debunking the most generally acceptable argument put forth by Sirius and XM in favor of a merger - that the competitive marketplace includes terrestrial radio, MP3s, Internet radio and music-enabled cellphones.

Schaeffler notes that while those services may become competitors to Sirius-XM in the future, not one of them is "substitutable" for satellite radio today.

"[We are] hard-pressed to find any instance where Sirius and/or XM acted in a competitive manner against [these] so-called digital competitors," claims the report.

Schaeffler also charges that the merger attempt reflects "remarkable impatience," on the part of Sirius and XM, noting it's been just five years since the companies launched, and both have plenty of cash reserves on their balance sheets...read more: here

4/03/2007 07:00:00 AM


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2 Comments:

  • The Carmel Group, the influential research firm (says who? influences who? FCC? if so,nefarious)

    outlines the strongest arguments yet (says who?)

    Sponsored by the National Association of Broadcasters
    the 11-page independent white paper includes (independent? ridiculous! oxymoron)

    XM launched its first portable satellite radio, which prompted Sirius to do the same just 5 months later (who else has portable?)

    competition, even in a duopoly, forces improvements in service (keep hitting the talking points, duopoly)

    The Carmel Group devised a similar chart in its analysis of the EchoStar-DirecTV merger that is widely credited with providing the foundation for the arguments that the Federal Communications Commission applied in unanimously rejecting that deal (says who, and if so it's a travesty)

    Schaeffler notes that while those services may become competitors to Sirius-XM in the future, not one of them is "substitutable" for satellite radio today (we must wait until the foot is on the throat!)

    "[We are] hard-pressed to find any instance where Sirius and/or XM acted in a competitive manner against [these] so-called digital competitors," claims the report (i'm hard-pressed to see independence in carmel group...stilleto?)

    Schaeffler also charges that the merger attempt reflects "remarkable impatience," on the part of Sirius and XM, noting it's been just five years since the companies launched, and both have plenty of cash reserves on their balance sheets (oh brotha!)

    HACK JOB, CRAMMED WITH BIAS!!!!

    By Anonymous Anonymous, at April 03, 2007 8:23 AM  


  • "[We are] hard-pressed to find any instance where Sirius and/or XM acted in a competitive manner against [these] so-called digital competitors,"

    "Beyond AM, Beyond FM, XM" "The best Radio on Radio" seems like a competitive manner against terrestrial radio. The NAB has undoubtedly actedin a competitive manner against satellite radio. Creating handheld portable radios that can save individual songs is an attempt to compete with MP3 players. Working to get a large installed base before HD radio gets a foothold is a competitive action. Offering streaming audio online is qa competitive action against other internet radio offerings....

    By Blogger myquealer, at April 03, 2007 11:33 AM  


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