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Sat Radio Merger Update
Washington - Jun 15, 2007 - The main news items of the week in the ongoing satellite radio merger debate include a study of the proposal commissioned by XM and Sirius, and a letter from Congressmen Conyers and Chabot of the House Judiciary Committee to FCC Chairman Martin and U.S. Attorney General Gonzales.

The study
XM and Sirius retained the services of Thomas Hazlett, the former chief economist of the Federal Communications Commission, a professor of law and economics at George Mason University, and a principal in Arlington Economics, to prepare a study regarding the merger. The paper, titled The Economics of the Satellite Radio Merger, was filed with the FCC on June 14.

The 49-page report explores the financial and strategic rationale behind the merger and concludes that the merger offers the potential to yield substantial efficiencies, benefit consumers and enhance the dynamics of competition within the audio entertainment marketplace. In a press statement about the study, Hazlett said, "After a thorough analysis, it is my opinion that the merger of XM and Sirius will predictably enhance consumer welfare. The National Association of Broadcasters' staunch opposition to the merger illustrates [its] similar expectation. The improved economic vitality of a combined satellite radio company would drive industry innovation, promote competition and enhance programming and pricing options for customers."

As expected by a study commissioned by the merging companies, the key findings favor the merger. The main arguments state:

  • The proposed merger will increase competition among providers of audio entertainment. Terrestrial radio competes with satellite radio, as evidenced by long-standing opposition by terrestrial stations to satellite rivalry and to the proposed merger.
  • If terrestrial broadcasters genuinely believed that the merger would substantially increase price, they would support the merger, given that higher prices for satellite radio would translate into larger audiences and ad revenues for them.
  • The merger is expected to lift the financial prospects of satellite radio, lower capital financing costs, and foster economies of scale.
  • Consumers will benefit from the proposed merger. By combining two small players in the audio entertainment market, the transaction will bring economic vitality to satellite radio. This, in turn, will sustain a wide range of valuable consumer options and spawn new services and products.

    Hazlett concludes that it is for these reasons that Wall Street analysts have argued in favor of this transaction since long before the satcasters negotiated a merger agreement. Likewise, these same reasons serve as the basis for incumbent broadcasters' opposition.

    The full report is available at or

    Not surprisingly, the National Association of Broadcasters issued a statement that opposes the conclusions of the study, saying that the report "defies logic" and that stating that consumers would benefit from the merger is "laughable."

    The letter
    The June 13 letter from Congressmen Conyers and Chabot of the House Judiciary Committee to FCC Chairman Martin and U.S. Attorney General Gonzales poses several questions to the two leaders who are being charged with allowing or rejecting the merger.

  • The letter notes that original license conditions note that one entity cannot own the full satellite radio spectrum and asks if the circumstances today have changed to allow it.
  • The Congressmen seek a clear definition of the relevant market as it relates to the antitrust issues.
  • The letter references the previously denied Echostar/Directv merger and asks how that situation compares with the Sirius/XM proposal.
  • The Congressmen ask how a new competitor could enter the satellite radio market if the merger is allowed.

    The letter is available through the NAB's website at this link.

    FCC to Hold Localism Hearing in Portland, ME
    Washington, DC - Jun 8, 2007 - The Federal Communications Commission will hold a localism hearing in the afternoon and evening in Portland, ME, on June 28, 2007. The purpose of the hearing is to gather information from consumers, industry, civic organizations, and others on broadcasters' service to their local communities.

    The hearing format will enable members of the public to participate via an open microphone session. The FCC will release further as they are decided. The specific time and place for the hearing will be announced by June 12, 2007.

    A live audio webcast of the hearing will be available via the FCC website ( on a first-come, first-served basis. The hearing will also be recorded for later distribution.

    FCC Seeks Comments on Sat Radio Merger
    Washington - Jun 8, 2007 - On March 20, 2007, Sirius Satellite Radio and XM Satellite Radio submitted applications seeking consent to transfer control of its FCC licenses and authorizations pursuant to an agreement and plan of merger from Feb. 19, 2007. On June 8, the FCC opened the application for comment, which is the first step of the FCC's consideration process. The FCC has accepted the consolidated application for approval of the transfer of control of the licenses and authorizations.

    Petitions to deny, comments, or informal comments must be filed by July 9, 2007. Responses or oppositions to such submissions must be filed by July 24, 2007. Filings should refer to MB Docket No. 07-57.

    Last week's headlines were full of statements of opposition to and support of the proposed merger, and it was still uncertain as to when the FCC would begin the review process. Some forecasters believed that the FCC would wait until the Department of Justice approved the merger before acting.

    The FCC move at least moves the process forward instead of letting it sit while speculation and assumption run rampant. Many voices gave already spoken on the issue, and these groups will surely file comments in the coming days.

    Music First Coalition Seeks Radio Airplay Royalties
    Washington - Jun 13, 2007 - A group of recording artists and organizations have banded together to seek royalties for their music when it is played on the radio. According to the group's website, "Corporate radio has had a free pass for too long." The group wants commercial radio stations to pay the performers for playing their music on the air. Quoting the group's website again, "Big radio [refuses] to pay even a fraction of a penny to the performers that brought it to life."

    The coalition is comprised of more than 100 artists and 10 music and recording interest groups including the RIAA, Soundexchange, the American Federation of Musicians and the Christian Music Trade Association. While group seeks compensation for radio airplay, the group's site does not specify exactly what it seeks.

    Recording artists have sought radio airplay royalties for many years, but radio broadcasters have been able to avoid paying the royalties on the grounds that radio airplay and music sales are linked. Broadcasters cite that it is because of exposure from radio airplay that artists can sell records.

    Music royalties have become a major issue in recent years. The Digital Millennium Copyright Act brought many of the previous loopholes to light. The NAB has already begun its campaign against the coalition's efforts, and if its zeal in this case matches what the NAB has done in the satellite radio debate, there will be a great deal of attention on this issue.

    The NAB's rebuttal to the coalition's announcement singles out John Legend, a member of the coalition, who also participated in a terrestrial radio promotional campaign in 2005 where the artist thanked radio for its contribution to boosting the performer's career.

    It's true that terrestrial radio has been able to avoid the royalty fees for music airplay, and few will deny that musicians should be compensated for their work. The coalition artists deny that radio airplay helps them in any way, but this is not true. Perhaps a mutually agreeable royalty payment is in order, keeping the airplay benefit in mind. Unfortunately, the Internet streaming royalty situation has already shown that determining a mutually agreeable rate is a difficult task.


    Wicks and Marketron Merge
    New York - Jun 11, 2007 - Wicks Broadcast Solutions and Marketron International have announced that the two companies will merge. Pete D'Acosta, CEO of WBS, will remain as CEO of the new company, operating under the name of Marketron Broadcast Solutions.

    WBS and Marketron offer broadcast management software to radio, TV and cable. Marketron Broadcast Solutions will maintain offices in Reedsport, OR; Opelika, AL; Hailey, ID; Birmingham, AL, and Toronto.

    Crown Celebrates 60 Years
    Elkhart, IN - Jun 14, 2007 - Six decades ago, an Indiana minister named Clarence C. Moore (1904-1979) established a company to manufacture audio electronic products. Moore, a longtime radio enthusiast, had spent the early part of the 1940s in Quito, Ecuador, working for HCJB, the non-profit Christian broadcasting and engineering group. After his return to the United States, he focused his attention on supplying Christian broadcasters with quality electronic products. As a result, Moore founded International Radio and Electronics Corporation (IREC) in 1947 and converted a former chicken coop into the manufacturer’s first production facility.

    The company’s early reputation was built on a family of rugged and compact open-reel tape recorders designed to operate reliably when used by missionaries in remote, often-primitive regions of the world. After modifying and distributing several existing models (Magnecord, Recordio, Pentron and Crestwood) for the first couple of years, Moore obtained a patent in 1949 for a groundbreaking invention: the world’s first tape recorder with a built-in power amplifier (15 watts).

    Eventually, Moore’s wife and co-founder, Ruby (who died in 2002), suggested that International Radio and Electronics Corporation was too long a name for the company. Because IREC had by this point produced vacuum-tube tape recorders branded Royal and Imperial, and that the emblem on these products was a fancy crown, she felt that the company should simply be called Crown. Her husband agreed, and, in the 1960s, the company’s name was changed to Crown International, a division of International Radio and Electronics Corporation. In 1975, the stockholders voted to change the name of the corporation to Crown International, Inc.

    In the 1960s, the company introduced the DC300 high-power, solid-state amplifier, which offered 150 watts per channel at eight ohms and AB+B circuitry. Forty years later, many DC300s are still being used. In the 1970s, Crown launched the PSA-2 power amplifier with a built-in computer to maximize performance of its output transistors. Product diversification began with the introduction of the Pressure Zone Microphones (PZM) and TEF audio analyzer.

    The company introduced its Grounded Bridge circuitry in the 1980s, and by the 1990s it developed computer-controlled audio systems. In March, Crown became part of Harman International.

    A mid-1950s photo of Clarence Moore (left) and his son, Clyde (also later a Crown president), with a some of the company’s early tape recorders.

    Sales Call
    Schweizer Radio DRS, Swiss national state radio, has standardized on the Digigram UAX220-Mic USB audio interface for all its mobile computer recording applications.
    Asahi Broadcasting Corporation (ABC) of Osaka, Japan, has installed APT Worldnet Oslo codecs at its Osaka and Tokyo facilities to transport multiple radio program feeds between the two facilities.
    Radio Mosaique in Tunis has installed a Netia Radio-Assist automation system as part of it complete facility upgrade. The broadcaster reaches more than one third of the Tunisian population.
    Neutrik recently provided an assortment of its products to the La Sierra University Music Technology Program for the Neutrik Cable Making and Interconnectivity Workshop, which will be available to select students during the Fall 2007 semester. The workshop provides students with practical and theoretical instruction techniques for building audio cables and for testing the quality of the signal through those cables. The Neutrik donation includes NP2X-B mono phone plugs, NP3X-B stereo phone plugs, NC3MX-B XLR connectors NC3FX-B XLR connectors and a NYS-SPP-L patchbay.


    Ibiquity Adds Tober as Broadcast Marketing Manager
    Columbia, MD - Jun 11, 2007 - Ibiquity Digital has hired Kelly Tober as broadcast marketing manager. Tober will work with HD Radio broadcasters to support their local market programs, on-air presence, Web promotions and trade shows.

    Tober will report to Don Kelly, Ibiquity Digital director of broadcast marketing. Tober was most recently the promotions director at WBIG-FM in Washington, DC. Previously, she was an account executive at WMAL-AM in Washington, DC. Tober began her broadcast career as a promotions coordinator at WJZW-FM.

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