The continued flow of rhetoric between the interested parties concerning the proposed merger of Sirius Satellite Radio and XM Satellite Radio has seemed itself to provide enough content for a new channel on either broadcast provider. But recent incidents and reports demonstrated a quantum leap in the debate, none of which officially counts before the ultimate decision is left to regulators from both the U.S. Federal Communications Commission (FCC) and the antitrust division of the Department of Justice.

Public testimony has been offered before both House and Senate committees, and further hearings are expected. Meanwhile, the sound bite apparently plays about as well for satellite radio as it does in TV commercials and YouTube clips; that is, sometimes effectively, often entertainingly, rarely informatively.

Appearing in both sessions, Sirius CEO Mel Karmazin stated his case for the merger and found himself opposed by representatives of the National Association of Broadcasters (NAB), which is providing fiercely staunch opposition to the merger.

In February, Karmazin argued before the House Judiciary Committee Antitrust Task Force that a merger is in the consumers’ best interests by offering more choice, lower prices and less confusion about the offerings of the two satellite broadcasters, who often provide similar-but-not-same content such as Major League Baseball or National Football League games, Oprah Winfrey or Martha Stewart or "shock jocks" Howard Stern or Opie & Anthony.

Conversely, David Rehr, president and CEO of the NAB, told the panel that a "government-sanctioned monopoly" would "undermine audio competition, not enhance it." Yet the NAB’s historically persistent attacks on the satellite radio operators and Rehr’s very presence at the hearing belied the assertion that a merged company would lack competition for listeners.

So which is it?

A white paper released April 3 by market analyst from the Carmel Group (which has been cited as an opponent to the rejected 2003 merger of the satellite TV providers DirecTV and EchoStar) recommended that federal regulators not approve the merger "under any conditions." It was immediately seized upon by pro-merger critics, primarily for two points: That the 11-page study had been paid for by the NAB, and that its conclusion contradicted an October 2005 paper by its author, Jimmy Schaeffler, Carmel Group’s chairman and chief service officer.

The first point was correct: As Carmel Group claimed on the cover of its position paper, it had been retained by the NAB to review the proposed merger.

The second point lacked context, serving as an apt anecdote for a debate in which often what is technically accurate may not be true, and what seems true at present cannot be predicted with any accuracy.

To wit: A day after the white paper was released, the Orbitcast blog ("All Things Satellite Radio") ran the headline "Busted: Carmel Group Has Already Defined Satellite Radio’s Competitors," and described Schaeffler’s "point-by-point blows combating each argument in favor of the merger."

Rather than addressing those points, however, the blog asserted that Schaeffler contradicted himself in the white paper by describing the pro-merger definition of competition from current outside media as "ludicrous" after having in 2005 defined "traditional analog and terrestrial AM/FM radio, MP3 players, and video- and Internet-to-the-vehicle" as potential competitors. Orbitcast also suggested a taint to Carmel Group’s conclusions since it was retained by the NAB (meanwhile, on its site, Orbitcast apparently accepts advertising and gifts from Sirius, XM and satellite radio-related businesses).

From Schaeffler’s perspective, his 2005 analysis "talks about how great the satellite radio market is with two competitors, and attacks the differentiated competition as individual players.

"People are calling me ‘busted’ and inconsistent," he said. "There is no inconsistency. There was one paragraph [in 2005] about the market being defined completely differently. The whole thing is about being differentiated, and not ready for prime time."

The 2005 piece described how "the U.S. is pitched in a new battle over the same kind of telecom development, where again, the pie grows and numerous competitors thrive, side- by-side," and defines how digital terrestrial radio lacks broad content; MP3 players continually require time, effort and money to program and operate (as opposed to having Sirius and XM’s self-styled "effortless" features); and that vehicle drivers need their eyes and attentions focused on the road instead of in-car video or Internet.

Indeed, in the next paragraph, Schaeffler quoted Sirius’ own pronouncement of its competitive capability by noting:

"Sirius’ programming chief, Jay Clark, summarizes the in-vehicle competitive experience in the following manner: ‘I think there’s room for all of us. And I certainly don’t think that just because there’s an MP3 in our space, that we can’t be there, too.’"

"Differentiation was true one and a half years ago, and it is today; that’s point one," Schaeffler added. "And two is that [other technologies] are not yet ready for prime time," or straight competition for content and listeners.

"When all is said and done, not only has the ‘contradiction’ not hurt me," Schaeffler insisted, "but the message is more consistent. It shows the same theme, year after year after year."

Schaeffler ended his 2005 study by noting "Carmel Group has for eight years — well before the rise of digital terrestrial radio and MP3 players — projected the 2010 subscription base for satellite radio at roughly 30 million. We retain that calculated estimate today, despite the oncoming competitive base. The only thing that has changed is that we today have created projections for the other competitors. Suffice it to say, those other projections remain fairly bullish as well."

By their own count, Sirius and XM’s combined subscribers at filing had climbed beyond 14 million.

Still, suspicions abound. Attorney Gigi Sohn, president and founder of Public Knowledge, a Washington, D.C.-based public-interest advocacy organization dealing with intellectual property rights, also appeared before both Congressional hearings. She took exception to the white paper’s subtitle, describing the merger’s "harmful impact on consumers, content providers and performing artists."

"I haven’t seen any performing artists file against it," Sohn said. "The only people filing against it are the broadcasters."

She added while "I haven’t seen the [white paper], are there any econometrics or study of consumer behavior?

"If the broadcasters are not competitors, why are they so upset?," she wondered. "They are almost making the argument against themselves. Are you telling me that an ownership group with 1,000 stations is not aggregating their audience? Of course they do. They have seen satellite radio as a threat since day one, they’re seeing an opportunity to stop them, and they are going for blood."

Sohn explained "they know that two weaker companies are easier to compete against than one strong one. The DirecTV-EchoStar example is why they should be merged. They would have been competitive and [now] have the capability for real broadband service. Cable prices have gone up since; I trust it probably wouldn’t have happened had they been allowed to merge… Are you telling me that a free water fountain wouldn’t constrain the price of bottled water that they sell for $2 or whatever it is now on the [National] Mall? Free keeps prices low, or lower than they would normally be. To the extent that they wanted those two to merge to keep cable from taking over the multichannel video space, you want the same thing here. You want them to merge so that the broadcasters don’t take over."

She concluded that "the broadcasters cannot legitimately argue to the FCC, ‘well, satellite radio is a much broader market’, then tell the antitrust folks that they don’t compete. So which is it?"