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Sirius, XM Merger Gets FCC Approval 187

Posted by Soulskill
from the who-wants-a-choice-anyway dept.
Multiple readers, including koavf, have written to tell us the FCC has finally approved the Sirius-XM merger that has been in the works for quite a while now. CNN has picked up AP coverage as well. We discussed approval of the merger by the Justice Department a few months ago. From CNN: "The Federal Communications Commission voted 3-2 to approve the buyout, with the tiebreaker coming Friday night from Republican commissioner Deborah Taylor Tate. Tate had insisted that the companies settle charges that they violated FCC rules before she would approve the deal. The companies agreed this week to pay $19.7 million to the U.S. Treasury for violations related to radio receivers and ground-based signal repeaters. FCC Chairman Kevin Martin confirmed the final vote Friday night. 'I think it's going to be, in the end, a good thing for consumers and be in the public interest,' he told The Associated Press."
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Sirius, XM Merger Gets FCC Approval

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  • Business as usual (Score:5, Insightful)

    by Chester K (145560) on Saturday July 26, 2008 @02:10AM (#24346037) Homepage

    Of course, the merger comes with strict conditions to keep things in the public interest.

    Conditions like the conditions XM and Sirius were originally given when they were granted space on the spectrum. Conditions such as "these two companies may never, ever be allowed to merge".

    • by TooMuchToDo (882796) on Saturday July 26, 2008 @02:37AM (#24346143)
      If the companies can't survive without each other, what's the harm in letting them merge? It's not like they're going to lock you out of terrestrial radio. Times change. Just because before we said "You may never merge" doesn't mean it should apply today.
      • Oversight as usual (Score:5, Interesting)

        by jevvim (826181) on Saturday July 26, 2008 @03:01AM (#24346219) Journal
        In the beginning, there were a lot more ads on satellite radio. One of the two companies (I forget which) decided to focus on ad-free music channels; amazingly, the other company reduced the number of channels with ads as well. Post-merger, I'm concerned that Big Satellite (B.S.) will finally take aim at the terrestrial market. With only one satellite service type, how long until we see automobiles that come with a free B.S. receiver but the terrestrial receiver (AM/FM) costs extra? To me, though, it comes down to the apparent difference between Republican and Democratic oversight: Republicans reject regulations unless a direct fault can be seen (well, satellite competes with terrestrial, so it's not a monopoly) whereas Democrats demand regulations unless a direct fault can be guaranteed not to happen (well, they could become a monopoly, so forbid them from merging). I'm curious how much the FCC could "change" this decision in a year, should the executive branch return to Democratic hands.
        • Re: (Score:3, Insightful)

          by jd (1658)
          If they're willing to pay twenty million dollars to whoever criticizes the combined company, expect lots of trivial criticisms followed by sudden silence. Frankly, there are very few radio stations worth a damn any more, because of excessive mergers and over-generous media ownership rules. Radio Caroline is still ok, but they've alway been wiling to be different.
        • "how long until we see automobiles that come with a free B.S. receiver but the terrestrial receiver (AM/FM) costs extra?"

          Never. A lot of people like the idea of local radio with weather, traffic, and news. And as long as a lot of customers want the free AM/FM, the car companies will include the radio.
      • by Chester K (145560) on Saturday July 26, 2008 @03:35AM (#24346319) Homepage

        If the companies can't survive without each other, what's the harm in letting them merge?

        The companies might have a valid case about 'not being able to survive without each other' if they didn't make almost suicidally bad business decisions like paying Howard Stern 300 million dollars only to find out he can't bring in enough subscribers to even break even on his paycheck.

        And if they were to have failed individually, I'm sure there are plenty of buyers who'd love to have gotten their assets and put together a profitable satellite radio company with their current subscriber numbers.

        Instead they got what amounts to a bailout -- except instead of dollars, the currency of their bailout is fair competition to the benefit of consumers in a market that's now effectively being made into a government approved, privately maintained monopoly

        • by afidel (530433) on Saturday July 26, 2008 @05:17AM (#24346617)
          meh, the Stern deal was probably worth it for the publicity alone, think about it, you and millions of others still remember it years later.
        • I never would have bought Sirius if it wasn't for Stern.

        • Re: (Score:2, Troll)

          Before Howard signed, Sirius had only about 500,000 subscribers. Only 2.5 years after Howard broadcasting, they are over 8 million.
          Before Howard signed, Sirius was about to fold up shop because XM was creaming them in subscribers. Now, Sirius is spearheading the merger with XM being the "loser" of the two.

          I'd say the He/She that owns Sirius (with Mel's help, of course) made a damn good business decision with signing Howard.



          Yes, I am a Stern fan. I've been a listener since '90 +/-.
        • by lawpoop (604919)

          The companies might have a valid case about 'not being able to survive without each other' if they didn't make almost suicidally bad business decisions like paying Howard Stern 300 million dollars only to find out he can't bring in enough subscribers to even break even on his paycheck.

          What are you talking about? The big talking point when the new broke that Sirius had signed Stern was that "Oh, Stern has to bring in one million subscribers for them to break even."

          Sirius gained 1 million subscribers, going from 1 million to 2 million subscribers, in the year between the time Stern signed and the show started broadcasting. 2.5 years later, they are over 8 million subscribers.

          So, to recap -- Sirius had 1.1 million subscribers on Dec. 31st, 2004 [sirius.com]. They are now over 8 million. Could they ha

      • Re: (Score:3, Interesting)

        by loraksus (171574)

        Oh please. Their struggles are about as legitimate as Microsoft's whining that there aren't enough H1B visas being handed out and that there are no qualified Americans for X thousand jobs.

      • "Just because before we said "You may never merge" doesn't mean it should apply today."

        You have a very strange understanding of the word "never".

        • Maybe it's you who has the strange understanding of the word. People use the word 'never' all the time, but they don't actually MEAN "not ever." What they most likely mean is "not in the foreseeable future."
      • by strabes (1075839)

        If the companies can't survive without each other, what's the harm in letting them merge?

        There's little harm because nobody I know even uses satellite radio anymore. Direct iPod/mp3 player connection is far better.

        • Indeed, I only use my XM when I'm at home and want to listen to some new music. When driving, I use my iPhone hooked up to my car's Aux Input.

          What gets me, is that it was cheaper to get the iPhone than to get the XM radio installed in my "XM READY" car. $630 for the XM antenna and decoder card vs $199 for my iPhone.
      • It's not like those terms were agreed upon 50 or 100 years ago, it was agreed upon not too long ago. What is the point of having laws/agreements/contracts if the parties can randomly decide that the terms are no longer valid?
    • by Shihar (153932) on Saturday July 26, 2008 @03:14AM (#24346251)

      Yeah? And Ford has a monopoly on cars made by Ford. w00t. Someone call the lawyers.

      All companies are monopolies if you narrow the 'slice' of what you are looking at down far enough. You need to look at the big picture though. Sure, Sirius and XM have a monopoly on satellite radio, but satellite radio sure as hell doesn't have a monopoly on ears. I happily listen to an MP3 player or free radio on my way into work without feeling the slightest pressure to go dump however much it costs for bad satellite radio.

      Monopolies only work when there are no or few other viable option. If there is a simple substitution, the monopoly is broken, even if it isn't exactly the same product. It is like if Apple all of a sudden started to charge even higher prices for that silly little MP3 players. You couldn't cry foul over their "monopoly" on iPods. Sure, iPods might not be available at a reasonable price, but a smart person would just pick up another MP3 player that is cheaper.

      The reason why they two are being allowed to merge is because one is going to tank if they don't merge. One is going to tank because satellite radio is getting murdered by the competition. If one is going to go bust, it is better to let them do it in a less destructive manner. It would be one thing if satellite radio was dominating and people were clawing at each other to break into the market. That isn't the case though, satellite radio is just barely hanging on. Letting the two companies merge is far more likely to result in quality improvements and price drops as they consolidate their infrastructure and struggle to compete in the less than profitable radio market.

      • by mazarin5 (309432)

        Although if you widen the slice enough, nothing is a monopoly. Microsoft is not a monopoly, because you can always buy a Mac, or a typewriter, or a toaster. :)

        They have monopolized the satellite radio market, but not the greater radio market in general - that's still Clear Channel's domain.

      • Monopolies are relevant for discussion within a market, and satellite radio is a market distinct from other audio formats, so yes this is a 100% monopoly. Simply because buyers can find other things to listen to doesn't mean this isn't a monopoly or that the impact on consumers won't matter if they merge. Your argument amounts to "no one really wants this market anyway so why don't we let one company have the entire thing, you won't even notice, you can still buy iPods!"

        • Re:Business as usual (Score:5, Interesting)

          by Shihar (153932) on Saturday July 26, 2008 @01:24PM (#24349201)

          You miss the point entirely. Honda has a monopoly on Honda Civics. Only Honda is allowed to make a Civic by law. Despite this, we don't consider Honda a monopoly, simply because there are lots of other cars by other companies that we consider "civic like" such that you can easily find an alternative. If Honda was to double the price of a Civic tomorrow, you would just by a different car and feel only mildly annoyed.

          On the other hand, if Honda was the only one allowed to build cars in general, we would call them a monopoly. Many people need a car and have no real alternative to a car. Sure, airplanes, trains, and buses compete with cars, but they compete poorly in many instances. Only a car is going to drive you 25 miles through a New England winter from one small town to another.

          The Sirius and XM merger is not a big deal for two reasons.

          1) There are lots of alternatives. If the price of cars doubled, many people would simply shell out double the cash to get one. If the price of XM/Sirius doubles without a quality improvement that people find fair, they will simply stop using the service. Free AM/FM radio are direct competitors with satellite radio. MP3 players are also direct competition for satellite radio. I can't substitute riding the bus for buy a car in many instances, but it is pretty trivial to substitute an iPod for satellite radio.

          2) There is going to be only one satellite company, like it or not. Neither Sirius or XM are profitable. One of them WILL go bankrupt in the next couple of years. Once that happens you will be left with... one satellite radio station. They are begging to be allowed to merge because they want the destruction of the companies to be productive, rather then have one scattered to the wind while the other scrambles to pick up the pieces.

          Like it or not, there will be only one satellite radio station. The only question is if it is going to happen in a couple of years when one finally throws in the towel, or because they merged and combined programing in an attempt to better compete with AM/FM and MP3 players.

          • >Free AM/FM radio are direct competitors with satellite radio. MP3 players are also direct competition for satellite radio.

            Bear with me, as a UKian talking about the US market. Would it also be acceptable for there to be a single cable TV station and a single over-the-air TV station? After all, DVDs and camcorder recordings are direct competitors for peoples' eyeballs if they wish to spend time staring at their plasma screen.

            If a person in the US has a satellite radio receiver, there will be only

            • by Shihar (153932)

              I think that you could make a pretty solid argument that a single cable operator would be a approaching a monopoly in its area. The reason why this would be is that cable has extremely high infiltration (at least in the US). It is almost viewed as "needed" with minimal alternatives That said, there are many spots in the US where there really only is one cable company. In my area, I have two to pick from. I have chosen to use neither exactly because I think it is a rip off. My world hasn't ended.

              In the

          • iPods are non-live content devices, and a good amount of the content available on satellite radio is likely not available for download freely anyway. So as a content delivery model they couldn't be more different.

            In other words, you expand the definition of alternative that wide and anything that makes sound counts.

            I don't care if they are profitable or not, if no one really wants satellite radio service it should die. Simply joining 2 failed companies isn't going to magically make people want the service.

  • by Anonymous Coward on Saturday July 26, 2008 @02:36AM (#24346139)

    When I think of satellite radio, I think of this:
    *Major genres unrepresented.
    *Station playlists that would become predictable within a week.
    *Sub-genres within all genres utterly unrepresented in general (for example, one Metal station on all of Sirius, and it only plays death metal).
    *A whole slew of stations essentially devoted to playing the exact same stuff that you hear on standard Top 40 radio.
    *Commercials, despite being advertised as commercial-free.
    *Annoying DJs (the receivers display the name/artist playing, you do NOT need DJs trying to be funny between every song).
    *Oh, and a monthly fee on top of that.

    Frankly, satellite radio was created 10 years too late. Why should I put up with satellite radio when I can use my mp3 player?

    • Re: (Score:3, Interesting)

      *Major genres unrepresented. *Station playlists that would become predictable within a week. *Sub-genres within all genres utterly unrepresented in general (for example, one Metal station on all of Sirius, and it only plays death metal). *A whole slew of stations essentially devoted to playing the exact same stuff that you hear on standard Top 40 radio. *Commercials, despite being advertised as commercial-free. *Annoying DJs (the receivers display the name/artist playing, you do NOT need DJs trying to be fu

      • Re: (Score:2, Interesting)

        by memiliesm (1329199)

        Unfortunately, consumer demand drives it. People listen to what's comfortable. I don't understand why the top40 stations are some of the most popular. Even the "indie" and punk stations play all the same crap. It's clearly selling though.

        There's not that much to understand, and you said it yourself- it's what's comfortable. Radio is listened to primarily (really, almost exclusively) in cars and in offices. It's a passive medium, just on in the background while the listener is doing something else.

        That's why "shaking things up" rarely works in radio. For the most part, listeners don't want a challenge or to be actively entertained, they just want some inoffensive noise to keep them company.

      • by gumpish (682245)

        It's clearly selling though.

        Right. Selling so well that if the companies don't merge they'll both die.

    • by altek (119814)

      Why should I put up with satellite radio when I can use my mp3 player?

      I think a lot of the points you make are true. I don't have satellite radio either, but for a lot of people there is a value in it that isn't valuable to you. It's that music isn't something they want to spend real mental energy or time or money on, building a collection, having and maintaining devices to transport and play it, learning of new bands and albums, etc. They just know that they like certain types and want to select those types at will, with minimal effort. Satellite radio does exactly that.

    • Re: (Score:2, Interesting)

      *Major genres unrepresented.

      Name 1. I dare you. A major genre must be a genre of music, let's say, more than 10,000 people in their market (The United States) listen to.

      *Station playlists that would become predictable within a week.

      No. Not even close. I have an XM system and the exact reason I have it is because the play lists are constantly in flux. Adding to the mix is that most stations have weekly radio shows that feature brand new (some of it without a label or release yet) music. An example if this is XM 82 The System's hosting of Armin van Buuren's A State of Trance. It doesn't get

    • Re: (Score:3, Interesting)

      by Enry (630)

      Have you ever listened to satellite radio? I'm not sure who modded you up, but they (and you) have no clue.

      There's a few top-40 stations, but I never hear them. I have my favorite songs and groups programmed in and it'll alert me when any of them appear on any channel (try doing that, HD Radio).

      There's a monthly fee. There's a monthly fee for your Internet service too I bet. So what?

      I'm not sure where you get commercials from. A few stations have them, and I don't think any of the music ones on Sirius

    • by grumling (94709)

      You must be a Sirius subscriber. I started out with them, but wanted the XM portable receiver. I'm very happy I switched. XM has 2-3 channels I would call "metal" (I'm not a good judge of that), 4 Jazz channels, 3 classical channels (with higher quality/bitrates than normal channels), a few channels that play all sorts of strange stuff. And their pop-style channels have a much larger playlist than what I heard on Sirius (I switched just after they picked up Stern so maybe things have changed, but it doesn't

    • You've obviously never been to a rural area.

      I live in Saskatchewan, Canada.

      Right now I am working as a distributor for a small company based in Moose Jaw.

      My job, essentially, is to drive around the province as a specialized courier in a vehicle provided for me.

      None of the vehicles have CD players, AUX in, or any options other than an AM/FM Tuner. And wearing headphones while driving is illegal in some places -- so an MP3 player is out of the question.

      Sirius radio is more targeted towards this kind of market

  • No place to go. (Score:2, Interesting)

    by Anonymous Coward

    I had considered XM radio then the merger rumors started to fly so I held back. The problem I have is supporting content I strongly dislike. I can't stand Howard Stern. Yes I know he's God to some people but it reminds me of high school and I escaped from that place a long time ago. I was thrilled when he went satellite but it did drop Sirus off the options list. Now if I get satellite period I have to help pay his over sized paycheck for being annoying. I realized most reading this are likely to be fans bu

    • Re: (Score:2, Informative)

      by Anonymous Coward

      I can't stand Howard Stern garbage either. I suspect that there were a fair number of XM users who felt this way, who will most likely let their membership expire now. So, in the end, it will be the Howard Stern radio with a some people who do not care. You would wonder if the accountants did a study to the number of people that he drove away versus those that he attracted. He really does poison satellite radio for me.

      • Re: (Score:2, Insightful)

        by Isotopian (942850)
        Yeah, there are very few people who care THAT much that they'd drop their subscription because they didn't want to be able to NOT listen to Howard Stern.
    • by Enry (630)

      My dad hates Stern with a passion (I like him, but that's just me). After listening to Sirius in my car for a while, he decided he wants it. He's had it and has enjoyed it for two years. I don't think he's ever once come across Stern by accident.

      I don't like some of the channel selections that is on Sirius (I don't want my money going towards Fox News), but that's the choice I'm given. The benefits of Sirius outweighs the few pennies I send to Roger Ailes every months.

      And yes, I can't stand O&A, but

    • Why would someone drop XM/Sirius because of Howard Stern? According to their respective wiki pages, Sirius has 135 channels and XM currently has something like 150 channels. Does Howard Stern play on all channels at once or something? I still listen to radio even though I could still potentially hear Rush Limbaugh on it. I still watch TV even though I could potentially see Nancy Grace on it. Sometimes people's logic escapes me.

  • Why did the FCC only grant two satellite licences? It's not like there's limited bandwith. Now that Sirius and XM merge and the FCC still doesn't allow new satellite companies there's no competition at all.
    • by rossdee (243626)

      How come the FCC even has jurisdiction over satellite radio? (I guess on this case both companies are based in the US so have to fo;;ow US laws, but anybody from another country that can afford ut ciuld put up thier own satellite using Russian or Eurpean launches...)

      • by goaliemn (19761)

        If you have a satellite and it transmits into a country, they do have some say in it. Or, if its a worldwide service (like GPS) it goes to the ITU, which sets alot of the radio band plans around the world and helps coordinate them between different countries.

    • by goaliemn (19761)

      um... there is limited bandwidth. they have specific frequency ranges they can use, so there is a definite hard limit.

  • Finally! (Score:4, Insightful)

    by agwis (690872) on Saturday July 26, 2008 @03:56AM (#24346387)

    Ultimately this will benefit the consumer. I've subscribed to both companies and my preference is for talk radio/sports. The competition for paid subscribers forced the 2 companies to continually one-up each other for exclusive content and caused problems for me when one company would win the contract from another at renewal time (nascar, baseball, etc.) At one point I had to give up programming I enjoyed listening too or pay for a second receiver with a second subscription in order to keep it.

    In the last few years, I've noticed the quality of the programming has deteriorated considerably as well. Once the companies are merged, all the duplicate costs for talent, administration, customer service, etc. should be eliminated and hopefully benefit the customers with a much improved service. My understanding is that nobody will even need to buy new hardware as the channels will be combined on your existing radio.

    This is not a monopoly in the sense that we cannot get similar service from another provider. If you find satellite too expensive, or don't like what they have too offer, then get rid of it and listen to terrestrial radio, or your ipod, mp3 player, etc.

    What I would be more concerned about than anything else to do with this merger is the question why did this take so long to pass? Oil companies have merged in a fraction of the time with minimal resistance compared to this one!

    • The problem is that they did break regulations, and another was that the condition of the original license that they not merge, and only a few years later, they whine about the conditions that they themselves explicitly agreed to abide.

      Also XM had more powerful repeaters than allowed, and they were not located where they said they would be when they applied to install them. They also allowed hardware licensees to produce FM transmitters that were a lot more powerful than the license allows. They've also b

  • Internet Radio (Score:3, Informative)

    by Strange Ranger (454494) on Saturday July 26, 2008 @04:49AM (#24346537)
    When you can stream a seemingly unlimited supply of internet radio straight to most connected devices, like the iPhone for one...
    satellite radio seems almost quaint. How long will it be before "internet radio" puts satellite radio totally out of business?

    BTW, for iPhone and iPod touch users, here's a good place to start:
    http://www.seeqpod.com/ [seeqpod.com]

    If you just want a radio gadget, there seem to be a few good ones available now:
    http://www.google.com/search?client=googlet&q=portable%20internet%20radio [google.com]
    Of course with these you can't play "kill your battery" using them over a 3G network... but then there's always the next thing..
    • by MtViewGuy (197597)

      Except for one thing: streaming Internet radio only works if you pretty much close to standing still (e.g., if you are at a Wi-Fi "hotspot" or if your device is directly connected to broadband connction). If you driving--especially on long-distance trips--satellite radio is a better choice, especially west of the Mississippi River, where far fewer metropolitan areas exist.

    • by grumling (94709)

      From AT&T's terms of service:

      "Prohibited and Permissible Uses: Except as may otherwise be specifically permitted or prohibited for select data plans, data sessions may be conducted only for the following purposes: (i) Internet browsing; (ii) email; and (iii) intranet access (including access to corporate intranets, email, and individual productivity applications like customer relationship management, sales force, and field service automation). The Data Plans and Features MAY NOT be used for any other pu

    • by Secrity (742221)
      For me there is no competition to satellite radio. XM and Sirius works in my car, internet radio doesn't -- and terrestrial radio sucks. I don't mind paying a reasonable subscription fee for satellite radio, but allowing them to become an unregulated monopoly is a very bad thing.
  • by Coolhand2120 (1001761) on Saturday July 26, 2008 @05:30AM (#24346669)
    Howard Stern has some pretty choice words about the FCC's decision here: http://www.businessandmedia.org/articles/2008/20080724152511.aspx [businessandmedia.org]

    Stern took it a step even further and called Democrats on the FCC "communists" and referred to their tactics as "gangsterism."

    I don't necessarily agree with Stern, just adding some relevant info.

    • Howard Stern has been whining about the merger since day one and and ranting about how it's not a monopoly. But it's all bullshit. The only thing he cares about is himself -- if the merger is approved it probably means more money for him. After one year on satellite he got an $82 million bonus because Sirius reached certain subscriber levels. If the merger doesn't go through Sirius might go under and he doesn't get the rest of his $500 million.

      • by barzok (26681)

        If the merger doesn't go through, Sirius will keep going. It may be a struggle, but they'll keep going. It's XM that needs this merger to go through if they want to stay afloat.

      • by btellier (126120)

        But it's all bullshit. The only thing he cares about is himself -- if the merger is approved it probably means more money for him. After one year on satellite he got an $82 million bonus because Sirius reached certain subscriber levels. If the merger doesn't go through Sirius might go under and he doesn't get the rest of his $500 million.

        He's said repeatedly that the $500 million is in escrow, meaning that he gets it whether they close shop or not. Oh, and do you think he would've ever gotten $500 million

    • by cowscows (103644)

      I'm pretty neutral on Howard Stern in general, but why should anyone give a rats ass what he thinks about something like this? He's done very well for himself as a guy who will say controversial things on the radio, good for him. Why that makes his opinion useful or worthwhile on something like government regulation and potential monopoly issues...I just don't see it.

      But regardless of how well informed he is on the issue, someone stating that they're going to discount something as broad as an entire politic

  • Kiss your ass goodbye.

    For a long rime I could figure it out. Why would two companies, both losing hundreds of millions of dollars a year, want to merge? How does that make sense? Then I realized -- if Sirius gets XM's subscriber revenue (XM has more subscribers than Sirius) and eliminates as many XM employees as possible -- presto!! They are instantly profitable!

    • by v1 (525388)

      in that way it does make economical sense. If there are two companies in a market that are competing for business, with fickle customers that will change loyalties in a heartbeat for a coupon, you can be running on an unreasonably low margin. Merge them, and for one you can completely dump one of the marketing departments. If the services are similar enough you may even be able to remove some of the now redundant infrastructure. Satellites are expensive.

      • by grumling (94709)

        Except that most people can't switch with a coupon. If their factory installed stereo came from GM, it is ready for XM, not Sirius. If they drive a Dodge, Sirius not XM. While I agree that if someone specifically wants one service over the other, they would purchase on the after market, a large number of people just wouldn't bother if they didn't want the service their car comes with. It just isn't important enough for them to make the switch. And as one who regularly deals with the after market solution, I

  • by v1 (525388) on Saturday July 26, 2008 @08:25AM (#24347225) Homepage Journal

    Tate had insisted that the companies settle charges that they violated FCC rules before she would approve the deal. The companies agreed this week to pay $19.7 million to the U.S. Treasury for violations related to radio receivers and ground-based signal repeaters.

    Oh well that's different! They agreed to pay their fines! We should give them a reward for being such good little boys.

    And when I go downtown to pay my speeding ticket I expect nothing less than a thank-you card and a candybar.

    What's WRONG with these people?

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