Key Senator's Letter Opposing Satellite Radio Merger Leaves Out The Part About How It Affects Him

from the conflict? dept

Fri, May 25th 2007 5:50pm — Carlo Longino

The tussle over approval of the XM-Sirius merger is largely defined by masked agendas and conflicts of interest. The biggest, of course, is the ongoing rhetoric from the National Association of Broadcasters, which has been the most vocal critic of the merger, despite its insistence that satellite radio doesn't compete with the terrestrial stations owned by its members. The NAB's resorted to paid shills, paid "independent" research, and astroturfing; other media companies want the right to own as many terrestrial stations as they want, while opposing the satellite companies' consolidation. One Alabama legislator even went to far as to abuse his office by convincing his colleagues to pass a resolution against the merger, even though he owns a bunch of radio stations. Earlier this week, Wisconsin Senator Herb Kohl, chairman of the Senate antitrust committee, told the FCC and the DOJ that he opposed the merger. His opposition could be significant, even though the decision ultimately rests with the FCC and DOJ. The letter has plenty of holes in its own right, in particular Kohl's assertion that "a competitive marketplace that would not require extensive regulatory oversight is far preferable" to one that requires "intrusive government regulation", so the best way to ensure that is by interfering with regulation and blocking the merger.

But what Kohl fails to mention is his own conflict of interest. As Orbitcast points out, Kohl owns the Milwaukee Bucks NBA team. Starting with the 2007-2008 season, the Bucks will handle advertising sales for their radio broadcasts, and pay a Milwaukee AM station for the airtime to broadcast their own games. This move puts them in direct competition with Sirius, which broadcasts NBA games, and could be seen as a conflict on interest in the matter, since it would behoove the Bucks, and in turn, Kohl, to limit access to broadcasts of Bucks games outside of the channels which they directly control and from which they directly profit. While the Bucks situation may not have influenced Kohl's views on the XM-Sirius deal, and admittedly is a pretty minute conflict, it would seem to be enough for the esteemed Senator to rule himself out of the matter, or at the very least, disclose it. Even more so when one considers that Kohl's campaigns for office have focused on his integrity and how he isn't beholden to special interests. Of course, Kohl shouldn't be singled out unfairly -- there's plenty of conflicts of interest on the matter on Capitol Hill.

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22 Comments

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Shawn, 26 May 2007 @ 7:29am

Doesn't matter to me
I think it's foolish to believe that anyone opposing this merger has a hidden agenda. I don't like it. I think anytime that a company is without a major competitor, that is a bad thing for consumers.
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Bill, 26 May 2007 @ 8:09am

Re: Doesn't matter to me
But Sirus is not the only competitor of XM or vise-versa. Why do you think the NAB is the biggest opponent of this merger? A merger would enable satellite radio to better compete with terrestrial radio, a fact that terrifies the NAB. The government is going to end blocking this merger in the name of saving competition, when it fact it will wind up having the opposite effect.
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YogiFish.com, 26 May 2007 @ 4:31pm

Re: All Eggs In One Basket Will Crack
We don't think it's a smart move for them to want to merge in the first place. Without an alternative for the consumer, what really are their motivations for buying.

What makes us buy something is being alble to see a vaulue from comparision. Value versus price, features versus additional options etc. A merged company offeres us nothing but one option, pay their price, or have nothing.

They seem to want to be like a cable or electric company now.. a utility we can't live without. trust me, we are living just fine without satellite radio.. thank you very much.
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FH, 26 May 2007 @ 6:19pm

Re: Re: All Eggs In One Basket Will Crack
What makes us buy things is perceived value and cost to value ratio. What many fail to recognize is there is no guarantee that either one of these two will be around unless they merge. Neither one is making a profit and nither one has enough customers to sustain themselves. I couldnt care less.... I have my IPOD!
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Jim, 27 May 2007 @ 12:05am

The affected market
Let the merger happen -- the market for sat radio is in competition with regular radio and HD radio, so there's plenty of competition.

Besides, the market is the best determiner in economic decisions, not any legislator, with or without a personal interest.
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Fuc You, 27 May 2007 @ 7:33am

We,We,We, All the way Home.
FH says: "What makes us buy things is..."
YogiFish.com says: "We don't think it's a smart move for..."

Fuc You says: "I don't speak for everyone. In my opinion, both satellite radio companies are struggling to remain in business because of the aforementioned reason (value for cost). The companies wish to merge so that a greater market share can be realized, operating costs can be reduced by restructuring, and more channels and media content will be available to existing customers. The price will not be raised because the free radio broadcasts will remain on air. The market will determine whether enough people would subscribe to satellite radio at greater than $10 a month. Keep in mind that satellite cable, which offers music and videos, is available around $30 a month so price wouldn't exceed that."
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Jon, 27 May 2007 @ 12:34pm

Why is party never mentioned with corrupt Dems??
If it is a Republican caught in something like this, the giant R after his name is mandatory every time the name and allegation are mentioned. With Democrats, though, interesting the party affiliation is rarely pointed out. More "fair and balanced" reporting from the mainstream drive-by media types I guess... Pretty typical (both the allegation and fact of a corrupt Dem and the media refusal to acknowledge corruption on its "team")...

And now, the flames will start, no doubt, which I will never read...
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SPR, 27 May 2007 @ 2:30pm

Re: Re: All Eggs In One Basket Will Crack
Come on YogiFish, fess up which NAB member station do you work for, or do you work directly for the NAB? The FCC is owned and operated by the NAB specifically for the purpose of eliminating their competition, and that is what they are trying to do now. With thousands of AM, FM and upcoming HD radio stations how can you say that the merger of Sirius and XM would mean no competition for the satellite companies?

By the way, have you ever noticed how one stations signal will interfere with and sometimes override another stations signal. Well guess what, the station that is being drowned out is NOT an NAB station and the FCC allows NAB stations to drive their competitors out.
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alternatives, 28 May 2007 @ 7:18am

And now, the flames will start, no doubt, which I will never read...

Then why bother posting? I can understand if that is your paid job, but if doing such is yyour hobby....you should get your meds adjusted.
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Jeremy Johnson, 28 May 2007 @ 11:32am

It's ridiculous that we're even discussing this. Satellite radio isn't a necessity item. Regulation of the marketplace is unnecessary.
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Thoughtful, 28 May 2007 @ 12:20pm

Serius should not be blocked by looby groups
It is obvious that Serius Radio is competition to
existing radio stations. The have attracted more then a million ears and the acquiring new custoemers at more than 60% per year. Serius listeners are a loss of advertising dollars to the other radio stations. The fact that they are stealing rom the land radio stations means that Serius is a new competitor. As such Serius should be allowe to expand.

There is nothing to stop other Satallite ratio stations
from starting up in the future.

However I wonder if the spread of WiFi and other
internet wireless delivery could not be the next competitor
for Serius. [Hopefully we can get rid of the 'stealing
internet conenction' crime as this will slow the
next level of communication.] I am sure that as the
technology gets cheaper/faster/more popular we will have
new ways to get something to listen to.]

It is important to stop lobby groups from creating
monopolies by regulation. This does not serve the public.
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Anonymous Coward, 28 May 2007 @ 12:29pm

I say no!!!
With no competition, the combined company will no longer have to compete for programming (ie: howard stern) and will have a lot less to choose from.
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Tired of Spin, 28 May 2007 @ 4:23pm

Re: Why is party never mentioned with corrupt Dems
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Tired of Spin, 28 May 2007 @ 4:27pm

Re: Why is party never mentioned with corrupt Dems
At first I thought you were the typical right wing meathead.

Then... hmm.... I wonder if he has a point...

So I read the article, and they also mention another busted politian, Rep. Mike Hubbard, who happens to be a republican.

They didn't put an R after his name.

So please...enough with the phony right wing whinning.
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Anonymous Coward, 28 May 2007 @ 6:42pm

AM radio? You've got to be kidding!
How much money does it take to sell your soul? How much money are we talking about for AM radio broadcasts? Sen Kohl is already quite wealthy. Does he need money enough to lie about the merger for another dollar from AM radio? Technically it is a conflict of interest but come on!
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Merger Arbitrage Investing, 28 May 2007 @ 7:00pm

XM/Sirius Competition
If you think the only competition XM and Sirius have are each other, you're not looking very hard. The main problem with this merger is that both companies said they would not merge when they got their licenses.
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Cpt. Disclosure, 28 May 2007 @ 7:03pm

Why would a politician have to disclose their pers
Politicians have this cool little prefix (Sen., Rep., Gov., POTUS.) in front of their names that automatically discloses that whatever it is that they are talking about is not in your best interest.
I personally say that we get rid of them all. Everyone votes themselves from the internet on everything. And I mean everything. Raise taxes, no. Wake up the next day, and tadaaaa!!! No new taxes. Legalize marijuana? Later that evening theirs a parade down Main St in every town in America with the Mayor toked up in the back of a convertible.
War? Finished.
Immigration? Solved.
Blogosphere? Goes off the charts.
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Walt, 29 May 2007 @ 8:24am

Still not the full picture
The part OrbitCast and TechDirt leave out: That Herb Kohl doesn't actually OWN the radio station, he just has a business relationship with them. Also left out: Sen. Kohl is a very wealthy man, whose overall financial outlook is unlikely to be affected very much by the merger.

Kohl has real problems with the merger (and as Merge Investing notes, XM and Sirius initially promised they would not) and yet OrbitCast and TechDirt are just kicking sand, hoping someone will think it's an argument. It's not -- it's a purposeful distraction.

Relevant disclosure: I consult for the NAB, so I must be one of those paid shills.
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Eugene, 29 May 2007 @ 8:47am

puh lease
The fact is that these two companies cannot stay afloat without merging and getting rid of all the redundancy. There's a reason that they can't turn a profit and that has to do with the enormous operating costs.

The NAB in all their hurry to protect the consumer's right to choose with one hand looks to kill off a major competing industry by having it spend its way into extinction, while with the other is lobbying for media conglomerates to be able to buy up all the radio stations in any given market for the sake of... choice?
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Carlo, 29 May 2007 @ 9:37am

Re: Still not the full picture
Walt, you might want to read the second paragraph I wrote before commenting, where I note that Kohl owns the basketball team, not the radio station. I also noted that the conflict was pretty small. Still, the conflict of interest remains, and for a politicians whose campaigns have focused on ethics and the Senator's lack of special-interest connections, one would imagine that even the appearance of impropriety would be enough for him to recuse himself from the matter.

Still, I guess as an NAB consultant, you'd be in a pretty good place to judge "purposeful distractions", eh?
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YogiFish.com, 29 May 2007 @ 11:24am

Re: Re: Re: All Eggs In One Basket Will Crack
We work for the internet, which is owned and broadcast to the world :) We agree with you that NAB and the FCC do work too closely together, but they are fading into the past.

Off-Air radio is also available on the internet, which reaches a bigger audience than satellite radio. We're sure that satellite radio will be making a bigger push to put they're content online as well.

Unless the NAB and FCC move to a online focus, what value will they have over the internet?
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Anonymous Coward, 25 Mar 2008 @ 9:32am

Re: Doesn't matter to me
Ahh. Looks like someone that works for the NAB.....
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