Two quick notes about the aftermath of the Convergence 2.0 conference earlier this week.

Gizmodo has the first hands-on review of Vonage's new V-Phone. We broke the news here of the new USB device.

Techdirt had some particularly uninformed comments regarding Mel Karmazin's keynote at the conference as well. The post titled, "Does Mel Karmazin Realize That XM Isn't The Only Competition?" blasts Sirius' CEO for failing to acknowledge that terrestrial radio is also a competitor to Sirius, not only XM. The post concludes with, "There's still one major problem though with the idea of a Sirius/XM merger: given all the animosity between fans of either service, will they be able to make peace if they're combined?" These are all valid points, so valid, in fact, that Karmazin addressed them in the keynote. Karmazin said the first regulatory debate would be whether you consider satellite radio as its own market (in which case regulatory approval would be virtually impossible), or look at radio as a whole. He then said post-merger integration would be difficult because a "Coke vs. Pepsi" atmosphere has grown between XM and Sirius users. The following are Mel Karmazin's remarks from the transcript of his keynote at the Convergence 2.0 conference.

"If, in fact, we even like the idea (of acquiring XM), there would definitely be the regulatory issue. The people who would be against it would say, gee, there's the number one and number two company, there are only two companies in satellite radio, how could you think that a merger like that is in the public's best interest? The people who would be in favor of it would say that radio is a fragmented business, there are thousands and thousands of terrestrial radio stations; they're going to have age D radio, there's the iPod, there's the internet, so what would it matter if, in fact, two companies were to combine, so—but it would be a question mark as to whether or not the Justice Department would do it, but you'd have to get the companies to want to do it, and the price would have to be right, and things like that, but it's also very tough, because most people see the analogy between the two satellite companies as Coke and Pepsi. In other words, there are certainly going to be two companies. Yes, they can be owned by one company, but both survive, both business plans are good, both have enough money to get to free cash flow positive, they don't need—or at least we don't need, I can't speak for them—we don't need to raise another dime in the public market. We'll be free cash flow next year, we have enough cash to get to free cash flow positive, so it makes your options really a whole lot more than if you were sort of troubled, and we're not."

It's one thing for attendees of a conference to take a quote out of context, it's another for someone who wasn't there to vilify the speaker without at least talking to someone who was. — Brian Ward

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