When you talk out of your REHR it is hard to get things straight. This happens quite often when someone is put into a position of arguing differing stances for differing subjects, and often your statements counteract.

In his five page letter to the FCC Chairmain, David “Talking Out My” Rehr made several key errors. For someone who has followed this issue so closely, or should have been following it, how could he make such mistakes? Perhaps it is the constant need to switch gears depending on which group you are speaking to or to whom you are writing a letter.

Let’s review the errors and doublespeak:

1. In the opening paragraph, David Rehr says Sirius and XM have “based their merger on a public relations campaign, slogans over substance, promises without proof.”

Well, let’s look deeper into this issue. Was it not the NAB that went about slogans? Ever hear “Merger to Monopoly” or “Sirius+XM=Monopoly” or “Do the Math”? These are all NAB slogans Mr. Rehr, and in the spattering of public support you were able to muster, it was an obvious theme. Secondly, we have the "promises without proof". The proof has been outlined for you David TOM Rehr. Sirius and XM have stated their intentions, and even laid them out for everyone to see. A La Carte pricing, lower tiers, family friendly pricing, etc. The NAB wants to be the champion of local content, but often times that simply never happens.

2. David Rehr stated, “You can’t make a silk purse out of a sow’s ear.”

Mr. Rehr, in case you missed this, satellite radio has a market of less than 5% of the nation. Satellite radio is still shaping and forming. Satellite radio can build to become a “silk purse”. David Rehr, what we have here is your desire to relegate satellite radio to being a sow’s ear by stifling the competition. All because you are now placed into a position of having to compete with satellite, I-Pods, cell phones, and internet. What you would rather see is these emerging technologies be dumbed down to the point where your service looks attractive. I have a better idea that makes the consumer win. CHANGE YOUR BUSINESS MODELS AND BECOME CONSUMER FRIENDLY. If you have a product consumers want, they will listen.

3. Rehr says, “These new concessions are nothing more than a shameless attempt to curry the favor of the government regulators.”

Currying favor? What is the NAB PAC all about? Is it wrong to offer something that the FCC feels is in the best interest of the public? When you are in business don’t you try curry the favor of consumers? David Rehr, did you think before you penned this statement? Don’t you think that this statement is a bit insulting to Chairman Martin as well as consumers? Is giving consumers a great product at a reasonable price a foreign concept to the NAB?

4. Rehr states, “Sirius and XM appear to have invented the term “audio entertainment market”, which they allege is the relevant market, out of cloth.”

David Rehr, perhaps over the past five years you have failed to see the emergence of I-Pods, faster speeds on internet enabling streaming content, and cell phones capable of streaming radio stations on a national basis. If you missed that cell phone thing, perhaps you can contact some of your membership…they participate. Perhaps what has you all disconcerted is that all of this competition has emerged. In your mind it is better to stifle that competition rather than raise your own standards.

5. Rehr states, “The merger parties argument that satellite radio and local radio are interchangeable is nonsense. If the two services were truly substitutable products, why would anyone pay $12.95 per month if they could get what they want free from local radio stations?”

David Rehr, you need to consider several things. Churn is a great demonstration of the substitution. People who leave one satellite radio service do not switch to the other. In the vast majority of cases, they find a substitute for satellite radio, oft, terrestrial radio suits the consumers needs. Satellite radio has a 20% annualized churn. Further, half of the people exposed to satellite radio in their new car elect not to keep the service. This again demonstrates that for many people there is a substitution. Secondly, and I almost hate to bring this up, but perhaps your lack of giving consumers what they want is what makes people decide to pay for satellite radio. Catching 20 minutes of commercials on a 22 minute commute simply may not be the local content consumers have in mind.

6. David Rehr says, “Sirius hiked it’s rates by 30% only 2 years ago and still managed to grow subscription rolls by 84%

Wow, you really are talking out of your Rehr. Sirius has NEVER raised prices. The same subscription price has existed since DAY ONE. Two years ago, XM satellite Radio dropped their commercial format and raised their price to match Sirius. How could you be doing the job of representing terrestrial radio members and blow such a basic fact when writing what should be such an important letter? Perhaps you should answer that question to your membership. Again, this is an illustration of what happens when you have differing stories or opinions relating to very similar subjects. It becomes difficult to keep your facts straight.

7. David Rehr states, “In other words, subscribers now paying $12.95 for 133 XM channels, or 170 Sirius channels…”

Yet another blunder on a very basic fact. How can you represent a group, and fail to even understand which satellite radio is which? Perhaps passing the merger on the merits that it would be less confusing to YOU is reason enough to see this pass. For the record, XM has 170 channels, not Sirius, and although this should seem obvious, I feel that perhaps it will sink in better if I point out that Sirius has 133 channels, not XM.

8. David Rehr states, “Wall Street may force the companies to abandon their bundling proposal. For example, RBC Capital Markets believes the new proposals may ultimately harm the merged company financially: ‘ In giving the FCC safeguards that should greatly enhance the probability of regulatory approval, potentially lowering average revenue per user, XM and Sirius could also erode operating fundamentals, offsetting merger synergies.”

Mr. Rehr, you are being very selective in your quoting here. First, RBS capital sees a potential of a 5% reduction in ARPU. However, they are professional analysts, and would fully understand the concept that ARPU is but one metric. Simply stated, would you rather have $1 from 300 people, or $12.95 from 20 people. This is a basic economic equation. Obviously, in this instance, I would rather have a $1 ARPU. Basic business Mr. Rehr. Are you once again trying to insult the intelligence of the FCC Chairman. Further, RBC Capital never stated that this pricing would offset ALL synergies. Despite your clever and selective quotes, Mr. Martin should see the full context of the report.

9. David Rehr states, “However, both Sirius and XM already use all of their spectrum capacity for existing channels. This means that Sirius wants to add XM channels to line-up post-merger, to create their promised “best of both worlds” package, Sirius will have to drop existing channels on a one-to-one basis.”

Mr. Rehr, I realize that the Sirius and XM filing was lengthy, but perhaps by now you will have seen the proposed line-ups for Sirius and XM. You will note that there is no channel deletion happening. Additionally, if you have been following the sector, you would realize that modulation overlay has been developed by each company. This allows the addition of channels, as well as other services. Your entire statement is baseless, and factually incorrect.

Mr. Rehr, what we have here is desperation on the part of the NAB to maintain a status quo so that your membership can continue on their current path without modification to satisfy consumers. What we have is you stumbling over facts and figures to suit the argument of the moment, and getting to a point where you are confusing yourself. I could have gone on and on, but I think the point has been made. The FCC, DOJ, satellite radio subscribers, and consumers alike can see clearly that they need to take what you say with several grains of salt.

Consider yourself exposed for talking out of your Rehr by this nattering blogger.