Interesting People mailing list archives
Thoughts on XM, Sirius, and playing by the rules
From: David Farber <dave () farber net>
Date: Tue, 20 Feb 2007 07:17:36 -0500
Begin forwarded message: From: Lauren Weinstein <lauren () vortex com> Date: February 19, 2007 11:35:14 PM EST To: dave () farber net Cc: lauren () vortex com Subject: Thoughts on XM, Sirius, and playing by the rules Dave, There will be plenty of analysis of the proposed XM - Sirius merger, from a variety of economic, technical, and political standpoints. I'd like to briefly focus on just two points for now. First, the risks to both companies in a merger, in terms of actually alienating their existing customer bases, is significant. XM and Sirius both have different styles and operating philosophies, and their subscribers tend to be very much niche-oriented. As an XM sub myself -- who happens to feel that the service is balancing right now on the edge of being too expensive for the value received, I know that significant changes to my personal favorite niches would cause me to drop the service flat -- even if a la carte options were available. But this is merely a business consideration, let's look at something that should be more important. As I understand it, a foundational element in the granting of the XM and Sirius licenses was that they not merge. The talk is that the merger has been pursued at this time since it was deemed more likely to succeed under the Bush administration. In other words, if you don't like the way the game has been going, try to get rules changed. Despite the protests of XM and Sirius to the contrary, the current situation is very much analogous to the proposed DirecTV - EchoStar (Dish Network) merger which was turned down by the FCC. The outcome in the XM - Sirius case should be the same. Sorry boys, but "we're still losing money" isn't an excuse -- you both knew the ground rules when you signed up. Of course, there are lots of details and issues surrounding this situation, that will be explored in many venues. But as it stands, both XM and Sirius were permitted extremely valuable franchises under clear rules, and if the FCC has any backbone they'll require both firms to stick by those rules. Initial comments by the FCC Chairman seemed to suggest that a merger was unlikely to be approved -- but later remarks appear to be wavering a bit already. Some financial analysts seem to be assuming that the FCC will ultimately keel over on this one -- perhaps hoping that the "do it now while Bush is in office" theory is a solid one. We shall see. More to come. --Lauren-- Lauren Weinstein lauren () vortex com or lauren () pfir org Tel: +1 (818) 225-2800 http://www.pfir.org/lauren Co-Founder, PFIR - People For Internet Responsibility - http://www.pfir.org Co-Founder, IOIC - International Open Internet Coalition - http://www.ioic.net Founder, CIFIP - California Initiative For Internet Privacy - http://www.cifip.org Founder, PRIVACY Forum - http://www.vortex.com Member, ACM Committee on Computers and Public Policy Lauren's Blog: http://lauren.vortex.com DayThink: http://daythink.vortex.com ------------------------------------------- Archives: http://v2.listbox.com/member/archive/247/@now Powered by Listbox: http://www.listbox.com
Current thread:
- Thoughts on XM, Sirius, and playing by the rules David Farber (Feb 20)