more on Thoughts on XM, Sirius, and playing by the rules

[David Farber <dave () farber net>]

Begin forwarded message:

From: "David P. Reed" <dpreed () reed com>
Date: February 20, 2007 3:43:42 PM EST
To: dave () farber net
Cc: ip () v2 listbox com
Subject: Re: [IP] more on Thoughts on XM, Sirius, and playing by the  
rules

Rules change with the times.   The companies were given spectrum,  
exclusive access, which prevented other services from using it.   The  
proper remedy to "we aren't making enough money" is to take the  
spectrum away and give it to a service that the public wants enough  
to make it profitable.

Iridium was a 10 year investment betting that cellphones would never  
be cheap.  It isn't the job of the government to make losing bets pay  
off.   Risk is paid off by exceptional returns, but only if there is  
real risk and 9 out of 10 such bets DON'T pay off.




David Farber wrote:
> Begin forwarded message:
>
> From: Patrick Ross <Pross () pff org>
> Date: February 20, 2007 7:49:00 AM EST
> To: dave () farber net, ip () v2 listbox com
> Subject: RE: [IP] Thoughts on XM, Sirius, and playing by the rules
>
> " Sorry boys, but 'we're
> still losing money' isn't an excuse -- you both knew the ground
> rules when you signed up."
>
> I'm sorry, Lauren, but rules are meant to change with the times,  
> from big ones such as "only white men with property can vote" to  
> more minor ones such as the spectrum rules that had to be changed  
> to allow services such as wireless phones and wi-fi.
>
> When the sat radio rules were put in place, there was no HD radio,  
> no Internet radio, no iPods, no iTunes, no Napster to Go, and no  
> music-enabled cell phones. The market has changed. You see a market  
> of two providers going to one. I see a larger digital music and  
> talk market with two competitors in it hemorrhaging money, and they  
> have merger restrictions on them none of their competitors do.
>
> You say XM can't really charge you more than they do. So what are  
> their alternatives to profitability? You seem to assume these  
> services would keep operating at a loss just to keep you happy.  
> Actually, you're lucky there are so many absurd spectrum rules in  
> place; if spectrum were treated like property (as it should be) XM  
> and/or Sirius would long ago have sold their "land" to someone who  
> could make money off of it, and it wouldn't have been satellite  
> radio I'd bet.
>
> For the sake of those who find value in seeing satellite radio  
> continue, I hope the FCC and DoJ find the backbone to approve the  
> merger.
>
> Patrick Ross
>
>
>  -----Original Message-----
> From:   David Farber [mailto:dave () farber net]
> Sent:   Tuesday, February 20, 2007 07:24 AM Eastern Standard Time
> To:     ip () v2 listbox com
> Subject:        [IP] Thoughts on XM, Sirius, and playing by the rules
>
>
>
> 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
>
>
>
>
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