Contents - Front Page - Mailbag - News - Daveland - Support DCRTV 3/24/08 - STATEMENT OF THE DEPARTMENT OF JUSTICE ANTITRUST DIVISION ON ITS DECISION TO CLOSE ITS INVESTIGATION OF XM SATELLITE RADIO HOLDINGS INC.’S MERGER WITH SIRIUS SATELLITE RADIO INC.... Evidence Does Not Establish that Combination of Satellite Radio Providers Would Substantially Reduce Competition... WASHINGTON — The Department of Justice’s Antitrust Division issued the following statement today after announcing the closing of its investigation into the proposed merger of XM Satellite Radio Holdings Inc. with Sirius Satellite Radio Inc.: “After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers. The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers. “The Division’s investigation indicated that the parties are not likely to compete with respect to many segments of the satellite radio business even in the absence of the merger. Because customers must acquire equipment that is specialized to the satellite radio service to which they subscribe, and which cannot receive the other provider’s signal, there has never been significant competition for customers who have already subscribed to one or the other service. For potential new subscribers, past competition has resulted in XM and Sirius entering long-term, sole-source contracts that provide incentives to all of the major auto manufacturers to install their radios in new vehicles. The car manufacturer channel accounts for a large and growing share of all satellite radio sales; yet, as a result of these contracts, there is not likely to be significant further competition between the parties for satellite radio equipment and service sold through this channel for many years. In the retail channel, where the parties likely would continue to compete to attract new subscribers absent the merger, the Division found that the evidence did not support defining a market limited to the two satellite radio firms that would exclude various alternative sources for audio entertainment, and similarly did not establish that the combined firm could profitably sustain an increased price to satellite radio consumers. Substantial cost savings likely to flow from the transaction also undermined any inference of competitive harm. Finally, the likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband Internet devices, made it even more unlikely that the transaction would harm consumers in the longer term. Accordingly, the Division has closed its investigation of the proposed merger.” ANALYSIS... During the course of its investigation, the Division reviewed millions of pages of documents, analyzed large amounts of data related to sales of satellite radios and subscriptions for satellite radio service, and interviewed scores of industry participants. Extent of Likely Future Competition between XM and Sirius The Division’s analysis considered the extent to which the two satellite radio providers compete with one another. Although the firms in the past competed to attract new subscribers, there has never been significant competition between them for customers who have already subscribed to one or the other service and purchased the requisite equipment. Also, competition for new subscribers is likely to be substantially more limited in the future than it was in the past. As to existing subscribers, the Division found that satellite radio equipment sold by each company is customized to each network and will not function with the other service. XM and Sirius made some efforts to develop an interoperable radio capable of receiving both sets of satellite signals. Depending on how such a radio would be configured, it could enable consumers to switch between providers without incurring the costs of new equipment. The Division’s investigation revealed, however, that no such interoperable radio is on the market and that such a radio likely would not be introduced in the near term. For example, in the important automotive channel, such a radio could not be introduced in the near term due to the engineering required to integrate radios into new vehicles. The need for equipment customized to each network means that in order to switch from XM to Sirius, or vice versa, a subscriber would have to purchase new equipment designed for the other service. In the case of a factory-installed car radio, switching satellite radio providers would have the additional disadvantage of requiring an aftermarket radio that would be less integrated into the vehicle’s systems. Data analyzed by the Division confirmed that subscribers rarely switch between XM and Sirius. As to new subscribers, XM and Sirius sell satellite radios and service primarily through two distribution channels: (1) car manufacturers that install the equipment in new cars and (2) mass-market retailers that sell automobile aftermarket equipment and other stand-alone equipment. Car manufacturers account for an increasingly large portion of XM and Sirius sales, and the parties have focused more and more of their resources on attracting subscribers through the car manufacturer channel. Historically, XM and Sirius engaged in head-to-head competition for the right to distribute their products and services through each car company. As a result of this competitive process, XM and Sirius have provided car manufacturers with subsidies and other payments that indirectly reduce the equipment prices paid by car buyers to obtain a satellite radio. However, XM and Sirius have entered into sole-source contracts with all the major automobile manufacturers that fix the amount of these subsidies and other pertinent terms through 2012 or beyond. Moreover, there was no evidence that competition between XM or Sirius beyond the terms of these contracts would affect customers’ choices of which car to buy. As a result, there is not likely to be significant competition between XM and Sirius for satellite radio equipment and service sold through the car manufacturer channel for many years. The Division’s investigation identified the mass-market retail channel as an arena in which XM and Sirius would compete with one another for the foreseeable future. Both XM and Sirius devote substantial effort and expense to attracting subscribers in this arena, with both companies offering discounts, most commonly in the form of equipment rebates, to attract consumers. Retail channel sales have dropped significantly since 2005, and the parties contended that the decline was accelerating. However, retail outlets still account for a large portion of the firms’ sales, and the Division was unable to determine with any certainty that this channel would not continue to be important in the future. Effect on Competition in the Retail Channel... Because XM and Sirius would no longer compete with one another in the retail channel following the merger, the Division examined what alternatives, if any, were available to consumers interested in purchasing satellite radio service, and specifically whether the relevant market was limited to the two satellite radio providers, such that their combination would create a monopoly. The parties contended that they compete with a variety of other sources of audio entertainment, including traditional AM/FM radio, HD Radio, MP3 players (e.g., iPods®), and audio offerings delivered through wireless telephones. Those options, used individually or in combination, offer many consumers attributes of satellite radio service that they may find attractive. The parties further contended that these audio entertainment alternatives were sufficient to prevent the merged company from profitably raising prices to consumers in the retail channel – for example, through less discounting of equipment prices, increased subscription prices, or reductions in the quality of equipment or service. The Division found that evidence developed in the investigation did not support defining a market limited to the two satellite radio firms, and similarly did not establish that the combined firm could profitably sustain an increased price to satellite radio consumers. XM and Sirius seek to attract subscribers in a wide variety of ways, including by offering commercial-free music (with digital sound quality), exclusive programming (such as Howard Stern on Sirius and “Oprah & Friends” on XM), niche music formats, out-of-market sporting events, and a variety of news and talk formats in a service that is accessible nationwide. The variety of these offerings reflects an effort to attract consumers with highly differentiated interests and tastes. Thus, while the satellite radio offerings of XM and Sirius likely are the closest substitutes for some current or potential customers, the two offerings do not appear to be the closest substitutes for other current or potential customers. For example, a potential customer considering purchasing XM service primarily to listen to Major League Baseball games or one considering purchasing Sirius service primarily to listen to Howard Stern may not view the other satellite radio service, which lacks the desired content, as a particularly close substitute. Similarly, many customers buying radios in the retail channel are acquiring an additional receiver to add to an existing XM or Sirius subscription for their car radio, and these customers likely would not respond to a price increase by choosing a radio linked to the other satellite radio provider. The evidence did not demonstrate that the number of current or potential customers that view XM and Sirius as the closest alternatives is large enough to make a price increase profitable. Importantly in this regard, the parties do not appear to have the ability to identify and price discriminate against those actual or potential customers that view XM and Sirius as the closest substitutes. Likely Efficiencies... To the extent there were some concern that the combined firm might be able profitably to increase prices in the mass-market retail channel, efficiencies flowing from the transaction likely would undermine any such concern. The Division’s investigation confirmed that the parties are likely to realize significant variable and fixed cost savings through the merger. It was not possible to estimate the magnitude of the efficiencies with precision due to the lack of evidentiary support provided by XM and Sirius, and many of the efficiencies claimed by the parties were not credited or were discounted because they did not reflect improvements in economic welfare, could have been achieved without the proposed transaction, or were not likely to be realized within the next several years. Nevertheless, the Division estimated the likely variable cost savings – those savings most likely to be passed on to consumers in the form of lower prices – to be substantial. For example, the merger is likely to allow the parties to consolidate development, production and distribution efforts on a single line of radios and thereby eliminate duplicative costs and realize economies of scale. These efficiencies alone likely would be sufficient to undermine an inference of competitive harm. Effect of Technological Change... Any inference of a competitive concern was further limited by the fact that a number of technology platforms are under development that are likely to offer new or improved alternatives to satellite radio. Most notable is the expected introduction within several years of next-generation wireless networks capable of streaming Internet radio to mobile devices. While it is difficult to predict which of these alternatives will be successful and the precise timing of their availability as an attractive alternative, a significant number of consumers in the future are likely to consider one or more of these platforms as an attractive alternative to satellite radio. The likely evolution of technology played an important role in the Division’s assessment of competitive effects in the longer term because, for example, consumers are likely to have access to new alternatives, including mobile broadband Internet devices, by the time the current long-term contracts between the parties and car manufacturers expire. The Division’s Closing Statement Policy... The Division provides this statement under its policy of issuing statements concerning the closing of investigations in appropriate cases. This statement is limited by the Division’s obligation to protect the confidentiality of certain information obtained in its investigations. As in most of its investigations, the Division’s evaluation has been highly fact-specific, and many of the relevant underlying facts are not public. Consequently, readers should not draw overly broad conclusions regarding how the Division is likely in the future to analyze other collaborations or activities, or transactions involving particular firms. Enforcement decisions are made on a case-by-case basis, and the analysis and conclusions discussed in this statement do not bind the Division in any future enforcement actions. Guidance on the Division’s policy regarding closing statements is available at: www.usdoj.gov. ### 3/5/08 - NPR ACQUIRES 1111 NORTH CAPITOL STREET NE, WASHINGTON, D.C., FOR NEW WORLDWIDE HEADQUARTERS... Facility to Include 60,000 Square Foot Newsroom for Broadcast and Digital Activities; NPR to Serve as Anchor in Redevelopment of NoMa Community... Washington, D.C.; March 5, 2008 – NPR, one of the premier worldwide media organizations, has acquired the 1111 North Capitol Street NE property in the District of Columbia for its new global headquarters. The news was announced today at a press conference by Ken Stern, Chief Executive Officer, NPR and Adrian Fenty, Mayor, District of Columbia. Also scheduled to participate at the press conference are Eleanor Holmes Norton, Congresswoman for the District of Columbia, and members of the Council of the District of Columbia. NPR has been located in D.C. since it was founded in 1970, and based in the city’s Penn Quarter neighborhood since 1992. This acquisition will relocate NPR’s 600 Washington-based staff to the new D.C. business improvement district of NoMa (North of Massachusetts Avenue), an emerging area that has begun redevelopment into a multi-use community. The façade and portions of the current four-story 1111 North Capitol Street property – constructed in 1927 for the Chesapeake & Potomac Telephone Company and listed on the historical registries of both the District and the U.S. government – will be retained and be integrated with a new 10-story office tower. All of NPR’s Washington journalism, multimedia, business and executive activities will be housed in this new facility, with occupancy planned for 2012. This will include a 60,000 square foot space for NPR News’ extensive, award-winning broadcast and multimedia operations and a public space for live shows and events. “NPR has been a part of the District of Columbia community for nearly four decades and we are delighted to continue our relationship for at least 20 more years,” said Mr. Stern. “A major factor in our decision was the opportunity to play a role in the revitalization of NoMa, much as we did 16 years ago as a pioneer in the Penn Quarter renaissance. We thank Mayor Fenty and his team for their dedication to NPR and their belief in our value to the city.” “NPR is a Washington icon,” said Mayor Fenty. “Their decision not only to stay in the District, but to build their new headquarters in one of our most important emerging neighborhoods says a lot about how far we’ve come in transforming our city.” Added Congresswoman Norton, “I am very pleased that NPR recognizes the considerable resources that the federal government and the private sector have put into making NoMa the place to be in downtown Washington. The nation’s premier public broadcaster belongs in the nation’s capitol.” NPR began its search for a new headquarters 19 months ago and initially identified over 100 sites in 35 locations throughout D.C., Maryland and Virginia. Following extensive analysis, this list was narrowed down to 1111 North Capitol Street and a location in Silver Spring, MD. “We appreciate the interest and enthusiasm of the Silver Spring community and the Montgomery County officials who worked hard to bring NPR there,” added Mr. Stern. “Silver Spring is justly recognized as a welcoming location for media companies. As a news organization that provides significant coverage of national news, our interest in having all NPR staff in a single facility, rather than creating a satellite office downtown for News staff requiring duplicate costs and systems, ultimately affected our decision.” Stern noted that the new space will be designed to reflect NPR’s evolution from a radio company to a company active in all forms of broadcast and digital media. “The new headquarters will be the physical manifestation of our broader thinking about NPR for the future – what kind of organization we must be so we can best serve the 800-plus NPR Member stations around the country and our 26 million listeners. This translates to a setting that offers our staff the most creative, collaborative and interactive atmosphere to do their best work and an environment that will permit us to nimbly adapt to changes and opportunities, whether in two years or in 20.” 3/4/08 - Imus in the Morning Returns to Washington, D.C. Radio - NEW YORK (Mar. 4, 2008) - ABC Radio Networks announced today that the Imus in the Morning radio program will return to the Washington, D.C. airwaves on the new True Oldies 105.9 beginning Thursday morning, March 5. The Citadel-owned station recently made the switch in formats to True Oldies and will now be adding the highest-profile morning show in the country for the all-important morning drive time slot. The show is hosted by legendary broadcaster Don Imus and launched on December 3, 2007 from flagship station WABC in New York. Imus in the Morning is syndicated nationally by the ABC Radio Networks and airs from 5 – 9 a.m. EST. “We’re thrilled to add Imus to our lineup as we wake up the movers and shakers in Washington,” said Jeff Boden, President and General Manager of True Oldies 105.9. “This is a great fit for us and we know Imus will bring new listeners to the station who will stick around for the new mix of oldies we’ll be playing the rest of the day.” Imus in the Morning is widely recognized for the hosts’ opinions and banter with a lineup of top-name guests, particularly from the political arena. In addition to Don Imus, the cast includes longtime newsman Charles McCord, producer Bernard McGuirk, engineer Lou Rufino and comedian Rob Bartlett. Karith Foster and Tony Powell are new comedic additions to the program. The show is heard in markets across the country including Los Angeles, Boston, Tampa and Providence. “Don’s unique ability to draw top newsmakers to the show and get them to speak candidly on topics they wouldn’t elsewhere is tailor-made for our nation’s capitol,” said Phil Boyce, Vice President of News/Talk Programming for Citadel Broadcasting. “The current presidential campaign is generating a level of interest and excitement that this country has never seen and Imus’ radio show will be the morning focal point for listeners and newsmakers alike.”  Imus has been honored by the Radio Broadcasters Hall of Fame and the National Association of Broadcasters and is the recipient of four Marconi Awards. He and his wife, Deirdre, run the Imus Ranch in New Mexico, which provides life experiences to children fighting cancer and he has raised millions of dollars for the CJ Foundation for SIDS and Tomorrows Children’s Fund through his broadcast career. 2/4/08 - LEGENDARY BROADCASTER DON GERONIMO TO PRESENT HIS LAST SHOW ON WJFK-FM ON FRIDAY, MAY 30 - Mike O’Meara Continues With Station As Host Of “The Mike O’Meara Show” - For more than 16 years, Don Geronimo has entertained millions of listeners with his acerbic and honest wit. The show he has anchored has been named one of the top radio talk shows in the country by Talkers magazine, and Don & Mike have been recognized by Washingtonian Magazine as favorite Air Personalities several times over the years. It is with mixed emotions that WJFK-FM announces Don’s final broadcast on the station will be on Friday, May 30 as the acclaimed radio host with a rich history of success in markets across the country steps down from hosting the popular DON AND MIKE SHOW. Broadcast on flagship station WJFK (106.7 and www.wjfk.com) in Washington, D.C. for more than 16 years, the DON AND MIKE SHOW has been the perennial No. 1 program among male demographics for several years and also rates well with Adults 25-54. Co-host Mike O’Meara will continue with the station hosting the self-titled MIKE O’MEARA SHOW on-air and online (3:00-7:00PM, ET) along with newsman Buzz Burbank and producers Robb Spewak and Joe Ardinger. “To say Don will be missed is an understatement,” said Michael Hughes, Senior Vice President and General Manager of the station.  “He delivers for his audience every single minute of every hour he’s on the air and that kind of talent is hard to find. For the better part of two decades Don has kept us all entertained and engaged with his ability to tell it like it is and willingness to share the most personal of details in his own life. We’ll certainly feel the absence of his sense of humor, but wish nothing but the best for him in the future.” “I want to thank CBS RADIO for standing by my side during not only the 17 years I've had the pleasure of working for them, but especially since the passing of my beloved wife, Freda,” said Geronimo. “As anyone who has lost a loved one knows, it's tough. But Freda was more than my wife of 25 years and mother to our son. She was my at home program director and an on-air participant when I needed one. She was there for the joy of my being hired at WLS, and the one to pick me up after being canned from KIIS-FM. We discussed our sex life on the air, for God's sake. How could I continue to do this show after this happened? It was then, and three times since, that I've tried to quit. My life has changed. Time doesn't heal all wounds, but it does help. I've got a wonderful girlfriend and we're planning our lives together. My son is graduating college, I've got three grandchildren in Minneapolis and I need a break to enjoy these times.” He added, “I made this decision not because I was defeated by loss, but because I am rejuvenated by life. So, Dan Mason, Michael Hughes and the rest of the jolly gang have been nice enough to allow me to take a hiatus, to see what else is out there. Radio is not something I can get out of my blood. I just don't know where I fit in right now. I need to get some down time, and see what happens next. Maybe on air, maybe off air. But for a while, no air. Since 1985 I've had the pleasure of sharing a studio with Mike O'Meara. I am thrilled for him to get a chance to start a sentence and not have me cut him off. He is like my brother. I love the guy and would do anything for him. I hope he enjoys this new chapter as well. I've worked with Buzz Burbank since 1983 and Robb Spewak since, well, a long time. These guys will continue to be the continuity Mike needs, and I love em too and wish em well. CBS has left me some future options, and I again am in their debt.”   "My partnership with Don has been an amazing experience,” said O’Meara. “I will miss his friendship as well as his radio genius.  As we move forward, I am excited to build on the success of the show, with Buzz, Robb and the rest of my dysfunctional radio family." Hughes added, “It gives me great pleasure to know Mike will be staying on with the station having played such an integral part in the success of the Don and Mike Show. Mike’s far-ranging talent from insightful observer of news and pop culture to a myriad of “dead-on” impersonations is something listeners count on to get through their afternoons. Working with Buzz and the rest of the team, Mike’s new show will have that same familiar feeling with a few new elements and surprises.” 106.7 WJFK serves the Washington, D.C. area with a top-rated lineup of personalities including The Junkies, Big O & Dukes, and The Don & Mike Show. The station is owned and operated by CBS RADIO. All original material on this website is copyright by Dave Hughes/DCRTV.