From satellite to Internet?

Last year at about this time, we opined that the Federal Communications Commission decision to give the green light for an XM and Sirius satellite radio merger was a “Sirius” mistake.

We’ve seen nothing to change that opinion – and we’ve observed anything but the “lower prices and more choice” that Sirius CEO Mel Karmazin claimed the merger would bring. He called it a “no-brainer."

“Hair-brained” is more like it.

As I attempted yesterday to access XM on-line, which had been available in the past as a bonus to XM subscribers, I was told that it is, indeed, still available, but as a $2.99 per month add-on to the satellite fee.

Even more disappointing than the growing fees is the collective amnesia that has swept XM and Sirius officials regarding “a la carte services,” where customers would pay only for those channels they want. It’s a service that’s long overdue for both satellite radio and cable television. The technology is there, but the corporate will to offer it seems to have vanished – if it was really ever there in the first place.

Corporate desire to maximize profits is not a bad thing. The real culprits here are the mutton-headed bureaucrats at the FCC – and in Congress – who don’t seem to have a clue about how a monopoly preys on consumers, but eventually comes home to roost. We had hoped that Liberty Media's bailout of Sirius-XM last winter might provide some impetus for business practices that would revitalize satellite radio. It appears we were wrong.

Look for continuing problems in the satellite radio business.

In the meantime, I’ll continue to spend more time with a few good local broadcasters – and their advertisers.

Oh, yes, today I also test drove a couple of Internet Radios – interesting gizmos that may have a real impact on all broadcasters, but especially the Sirius-XM monopoly.

Like I said, look for more tough times for the satellite radio folks.

Another chance for satellite radio?

Liberty Media, which is based in the Denver suburb of Englewood, has struck a deal to keep Sirius XM satellite radio afloat. Sirius XM stock has tanked and the company has been on the verge of bankruptcy. John Malone’s Liberty Media has agreed to prop up the ailing satellite radio company with a $530 million loan in exchange for 40 percent of the company and seats on the Sirius XM Board.

While we’ve opined often on the inherent value of good local radio service, we’ve always enjoyed and appreciated eavesdropping on other radio services such as the BBC, Voice of America, C-SPAN Radio, and others. As a fan of Big Band music, tunes from the early ‘50s, Bluegrass, and others, we found XM satellite radio a good source for targeted musical formats and a wide array of pretty good news and information programming.

But since we first subscribed to XM in 2004, their rates have increased and their service has remained stagnant. And while opposed to the Sirius-XM merger, their talk about "a la carte" choices caused me to wax hopeful. After all, they were touting something that many cable TV and satellite radio listeners have desired for years. The idea of paying ONLY for the channels you want is a delicious concept! And Sirius boss Mel Karmazin only whetted our appetites just prior to the merger by issuing the following statement:

XM and SIRIUS to Offer A La Carte Programming
Companies' FCC Filing to Detail Array of New Offerings Priced From $6.99 to $16.99 SIRIUS CEO Mel Karmazin to Discuss at National Press Club Address Today

NEW YORK and WASHINGTON, July 23, 2007 /PRNewswire--

~

SIRIUS Satellite Radio (Nasdaq: SIRI) and XM Satellite Radio (Nasdaq: XMSR) announced today that the merged company will offer American consumers for the first time the opportunity to choose programming on an a la carte basis. This unprecedented offering will provide subscribers with more choices and lower prices and pave the way for a unique form of competition in the entertainment industry -- one based on the individual programming preferences of listeners.

Alas, we’ve seen and heard only a blending of XM and Sirius program services in their new combined Sirius XM operation. It’s only the “pay channels” that offer choices, and I’m not about to fork over greenbacks for the likes of Howard Stern.

We're certain that John Malone has much more in mind than just offering a la carte radio programs and thus making good on a Sirius XM commitment. He and his new colleagues are likely exploring ways to capitalize upon new and more profitable wireless services.

BUT….it would be good if he could hold the collective feet of Sirius XM owners to the fire and make them deliver on promises that flowed ever-so-easily when they were trying persuade the FCC and the public of the virtues of a single satellite radio service.

Technology makes such a la carte services readily available. Only the will to do the right thing remains in doubt.

We hope John Malone and Sirius XM will do the right thing.

A Sirius Mistake

The Federal Communications Commission approved the XM-Sirius merger last Friday (7/25), bringing to an end a 16-month battle over whether or not such a move would be in the public interest.

South Dakotan Jonathan Adelstein was one of the dissenting Commissioners in the 3-2 decision, hailed by FCC Chairman Kevin Martin as a move that will give consumers greater choice and greater flexibility.

Sirius and XM are the only satellite radio companies, and they concede that the $3.5 billion "merger" -- really a buyout of XM by Sirius -- will save them lots of money.

For the 18-million of us who are satellite radio subscribers, don't look for a rate reduction any time soon. The deal would freeze basic subscription increases, but you can rest assured the new company will find ways to get around that inconvenience. There were some compromises, but nothing that keeps it from falling into the category of a really bad public policy decision by the Federal Communications Commission.

The FCC can spell m-o-n-o-p-o-l-y, but they don't understand its meaning.

For more background on this deal, read these articles from Broadcasting & Cable and the New York Times.