The 'Real' Story Behind the XM/Sirius Merger
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I am both a satellite radio listener (consumer) and a major shareholder in Sirius (SIRI). As an investor, I have studied the technology and closely followed Sirius’ operations and those of XM Satellite Radio (XMSR) - its only competitor. I have also read its filings made over the years with the SEC and I not only have closely followed the merger proposal and the application Sirius and XM made for its approval to the FCC, but have actively participated in that proceeding.
Back in March 2007, approximately, I filed a Petition for Declaratory Ruling with the FCC asking it to determine whether the two companies had complied with the condition the FCC imposed on both XM and Sirius when it granted each their licenses in 1997. That condition, which many consumers and individual shareholders may still be unaware of, required the companies provide an interoperable radio that would permit consumers to receive either XM or Sirius service from a single satellite radio receiver.
I filed the Petition for Declaratory Ruling at the FCC because, though ten years has passed since the FCC imposed the condition and long after XM and Sirius became operational, consumers still do not have access to an interoperable radio capable of receiving services from both companies. Moreover, shareholders have been kept in the dark about the impact that providing an interoperable radio would have on both companies' financial performance.
For consumers, one example of the adverse consequences of not having interoperable radios occurred on January 1, 2007 - to NASCAR fans. These listeners purchased XM radios because it provided NASCAR coverage. But when Sirius acquired the rights to broadcast NASCAR events, these listeners were forced to purchase new equipment, switch their service contracts to Sirius and lose their other XM services. Had the companies complied with the FCC’s interoperable radio requirement, these satellite radio consumers would not have been forced to buy new equipment or choose other programming offers in order to retain NASCAR programming.
Both XM and Sirius were well aware of the potential that interoperability provided not only for consumers, but also for the fortunes of both companies. In settling patent litigation between the two companies in 2000, a press release on February 16, 2000 stated:
Sirius Satellite Radio and XM Satellite Radio today announced an agreement to develop a unified standard for satellite radios. The standard is expected to accelerate growth of the satellite radio category by enabling consumers to purchase one radio capable of receiving both companies' broadcasts. XM Radio and Sirius will jointly fund development of the technology and work together to proliferate the new standard by creating a service mark for satellite radio. As part of the agreement, each company will contribute its intellectual property to the initiative and have agreed to resolve any pending patent litigation.
The companies both further extolled the unified standard as good news not only for consumers but also for shareholders because they said it would increase consumer use of satellite radio services, which logically was expected to have a positive effect on both companies’ revenues. The auto buying public would find particular benefits because the companies announced that no future OEM deals (auto manufacturers) would be exclusive. This would have meant that each vehicle manufactured with an interoperable radio would allow the auto buying public the ability to chose either XM or Sirius or both depending on their personal content preferences.
None of this happened, however. Why? Why are consumers who have spent tens of millions of dollars on non-interoperable radios now faced with the future prospect of having to spend the same amount or more once XM and Sirius merge? How has the lack of interoperable radios all these years affected each company’s financials and falling share prices?
Even with the merger, it will be one or more years before the combined programming of XM and Sirius can be received. In the interim, consumers have stopped or slowed their buying of satellite radio services because of the surrounding uncertainty about when and at what price a receiver will be available that can receive the programming of the merged entity. This confusion has only exacerbated an already serious decline in both companies' valuations and their shareholders are the ones being victimized.
As a consumer and shareholder, I have been asking for answers about what happened to the FCC’s interoperability mandate and the companies’ failure to comply with it. Not only have Sirius’ and XM’s executives refused to answer, the FCC has refused to address the issue of the companies’ failure to comply with its own rule or how its refusal to do so comports with its statutory obligations to protect the public’s interests in communications services.
The companies do offer a defense. They say they only had to “design and develop” the interoperable radios… not make them available to consumers. Think of it as a government-forced and shareholder-funded science project that the companies allocated up to 25 million dollars to complete. When specifically asked about this defense, the FCC says it can’t talk about it because the matter is pending before the Commission. With all due respect, it’s been “pending” for ten years. This seems all too convenient. It permits the FCC to refuse to explain why it hasn’t enforced its own rule by its continuous failure to enforce its own rule.
It’s been nearly two years since I began to ask questions about the lack of interoperable radios. The companies have defended themselves by silence, by inconsistent, ambiguous, and self-serving statements and even in testimony before Congressional committees. Recently, Senator Brownback obtained documents that have caused him to make inquiry about the truthfulness of the testimony given by Sirius’ CEO during some of his appearances before Congressional committees.
The reason this merger has been delayed, at a grave expense to shareholders, is because the companies are not in compliance with their licensing requirements and the FCC does not have the interest to address whether or not the companies have failed to properly serve satellite consumers’ interests. But the failure of the FCC regulatory oversight is not the only problem. The Department of Justice granted its approval of this merger precisely because of the companies’ failure to comply with the FCC’s interoperability mandate. The DOJ’s rationalized that because there are no interoperable radios, the companies still use radios capable of receiving only their respective services and hence do not compete with each other. In other words, the companies having prevented competition by violating the FCC regulatory requirement, there is no competition that could be harmed by the merger and hence no antitrust concerns.
Consumers and shareholders have been and are being duped. Shareholders have lost billions of dollars in investment. Consumers have spent hundreds of millions on unnecessary hardware. Why? Because at some point, these companies converted their business plans into a concerted effort to consolidate all of the satellite radio spectrum into one company. To do this, they flaunted the interoperable mandate, negotiated the merger, created a audio entertainment market out of whole cloth and engaged a host of Washington insiders to lobby their plan before the FCC, DOJ and Congress. During the process they kept their exclusive OEM deals, spent outrageous amounts of money for exclusive content, scuttled true competition, saddled consumers with soon to be obsolete equipment and forced consumers to invest in new equipment or forego satellite radio service.
Consumers and shareholders have been cheated and the government appears to be part of the problem or at least unwilling to do anything about it. Congress should investigate. Enough is known to question the candor and credibility of the highest-ranking executives in both companies, but in particular in Sirius. A lack of candor and credibility goes to the heart of the qualifications to be a FCC licensee. Under these circumstances, for the FCC to allow XM and Sirius to consolidate their licenses when it is not clear they are fit to hold such licenses is to favor the private interests of a few executives over the public interest and a failure of the FCC to perform the duties Congress gave it.
Disclosure: Author holds a long position in SIRI
This article has 83 comments:
You're either a masochist, the world's worst investor, or an NAB mole.
Whatever you are, I question your motives and your candor, sir.
i am thinking of another person who enjoys all the blessings that America provides him but wants GOD to damn America.
So to compare to Sat Radio, it seems that if Siri and XM want to merge, they should have one box capable of receiving both Sirius and XM signals. Hopefully, they have been working on that for the past year. If they have not, shame on them, I now see the need for delay until they do have the proper radio in place for the consumer. I wonder if there is any news on this. Otherwise, this deal is a no-brainer. Sat Radio will have the same competition as Sat TV, which is other forms of broadcast, not companies within its own Sat Radio industry.
xm investor
Sir, I ask you to disclose the number of shares that you own in Sirius...
"major shareholder," give us the number of shares, and let us be the judge.
I, too, am a Sirius subscriber, and am a small shareholder in XMSR (5,000 shares), and at times have owned SIRI shares (but because of the spread converted them to XMSR).
My 5,000 XMSR shares will upon merger become 23,000 shares of SIRI, (5,000 XM shares x 4.6 ratio = 23,000 shares of SIRI), yet I don't consider myself a major shareholder...and, I doubt that you hold anywhere near that number of shares, otherwise, why would you take such a harmful position against a company you claim to be a major shareholder.
Sir, once again, I ask you to disclose the number of shares that you own....
xm investor
>>>Michael Hartleib is a member of the class in that he has been a shareholder of Sirius since October of 2003. Mr. Hartleib currently owns 151,000 shares of Sirius Satellite Radio, Inc. (See Copy of Mr. Hartleib’s Ameritrade Account Statement attached herein as Exhibit “A”).<<<
siriusbuzz.com/forum/s...
whether or not he still owns 151,000 shares or not, I don't know, but I can tell you that now I am even more confused by him.
I can't tell whether he is for or against the merger....some prior writings appear he is for it, but the above just does not make any sense to me. He also appears to be the person that had some dispute with the Sirius vote on the merger claiming that they did not disclose the actual vote count.
However to suggest that you are crazy or not long at all on the SIRI stock is typical of the narrow thinking of this message board.
As an investor, I expect risk but not complicity by a CEO to cover up information that would certainly have affected my decision on whether or not to purchase SIRI. One reason the market is depressed is total lack of confidence in the operations of the markets and those who should be governing/policing on behalf of investors. It seems that once again the CEOs and goverment-watchdogs have failed the consumer who is ultimately the loser, all-a-round. I thank you for the first full explanation about why this stock and merger have been so disappointing.
Unfortunately there will be no justice for those who lose their investment even if fraud has occurred; one can't get compensation from a dead company nor sue the government, Too bad the latter is not possible, too bad.
hes clearly for the merger as he understands it must happen for satellite services to survive with the current ownership and managment in place.
you need to place things in context,hes been on board with satellite from prior to the time of the first refi.
im sorry to say hes telling the truth here..SIRIUS did have a material change to its business plan that effected the interoperable/dual device deployment.they clearly stated well into calendar year 2006 the device would be on market by the eoy 06.
or they were less then candid or honest in the past?
the fcc mandate said deploy for consumer use, "one device that would enable choice" at the user/listener level. which would benefit both company's. and most likely the service with the better content offering would reap the benefit of subcriber growth..
this was the battle sirius claimed they would fight to the end they even stated many times the market would have a large enough base to support two services going forward.
one thing is certain michael's not one of the normal sheep.
and now sirus claims there was never a mandate by the fcc and if the merger does not take place forget about the dual/interoperable devices!
Kevin martin and team need to present all the real facts,failures and related information along with the timeline to the public for airing prior to moving on this merger issue..
the truth is you dont know, as he and i dont....but we want the facts
also hes not the only person that began asking the fcc for information and the then current status of the dual device issue prior to any merger news starting in 2006.
even the fcc noted the pending action when granting both xm and sirius the required douments to launch and operate xm3/4 and fm5
so the claim by sirius that the fcc never gave them a answer on the mandate is clearly false the fcc responded clearly.and requested a specific timeline for deployment..in 2005
even the fcc used the term arual when it defined the growing competing landscape for sdars in the license grant they have no choice but to ok the merger or be taken to task in the courts by sirius.as the ceo stated!
new investors better be careful as they could get burnt bigtime if action is taken.and i suspect they the fcc wiil take action on more then a single issue and it most likely wont be a simple slap on the wrist.
for somebody that just noticed score-media payperview yesterday? what does that say for being well schooled. nothing when placed in the correct context.
maybe others are using information that was based on hartliebs footwork you need to consider all angles here for your investment.
sheep are free rage food for the wolf pack.
a honest good investor looks at all points and issue for effect on pps
1
this is why they had a battle over content and paid to much in some cases
but, the fcc was then nice enough to say go ahead and offer a common shared device to the public consumers.as a joint effort which could have allowed both services to reap many of the rewards being claimed as a merger specific benefits.
and should have lead to faster consumer uptake rates do to manufactures and oems being able to offer either service in a single device..
the shareholders and public have been screwed on this issue.
The combined company will have interoperable units on the market. It would not make any sense not to. They would probably like to have them on the shelves for Christmas if the FCC would get off their duffs and approve the merger. On second thought, they could do it on their duffs.
nly
if you know ryan he would not let a blog post in error "uncorrected"... which indicates to me it was based on fact then.
egis i like your work but hartleib is correct on this issue
Holder Shares Reported
CLAYTON JOSEPH P 3,525,785 25-Mar-08
DONNELLY PATRICK L 1,755,103 16-May-08
GREENSTEIN SCOTT ANDREW 1,473,307 19-Feb-08
MEYER JAMES E 1,238,479 19-Feb-08
FREAR DAVID J 830,790 14-Mar-08
Mr. Hartleib place in line:
Michael Hartleib 151,000 24-Mar-08
151000 / 830,790 = 18% of what the lowest Major Direct holder has
151,000 * $2 = $302,000 invested
Considering he is not Paid by Sirius, this is a considerable investment. Although I too would deem it at a lower invetor category, "siginificat investor".
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Considering he is not Paid by Sirius, this is a considerable investment. Although I too would deem it at a lower investor category, "significant investor".
I am so confused by this information...it makes sense, but then again it does not - are only XM subs getting screwed in the deal?
www.selectsatelliterad...
Interoperable Technologies, LLC is satellite radio’s joint venture. Formed in 2003 as an independent Delaware corporation, our parents are SIRIUS Satellite Radio, Inc. and XM Satellite Radio Inc., who agreed to develop a unified standard for a common receiver platform. The common or dual-mode receiver platform enables consumers to purchase one radio capable of receiving the services of both XM and SIRIUS. The related technology is jointly developed and funded by our parent companies, who share in its ownership. Indeed, in 2005, we substantially completed the design of a radio capable of receiving both services.
It is acknowledged that SIRIUS, XM and their manufacturing partners already produce receivers that permit end users to access all Satellite Digital Audio Radio systems in compliance with FCC interoperability obligations. Furthermore, there currently is no assurance that the XM or Sirius manufacturing partners will build dual-mode radios, that they will be cost competitive, or that any significant market for dual-mode radios will develop. Even so, Interoperable Technologies stands to develop the opportunity for dual-mode satellite radio technology.
Having all XM and SIRIUS programming available together in a single radio can be quite the compelling experience. Or, for those consumers unsure of which of two great services to commit to, offering a choice between SIRIUS or XM - independent of purchased hardware may lower entry barriers and further accelerate the adoption of this exciting new media. To these ends, Interoperable Technologies continues to develop dual-mode receiver technology able to receive either or both satellite radio services.
I'm sure XM/SIRI held off simply because each company didn't want to subsidize a radio that would become a subscriber to the competitor's service. This is borderline shady by XM/SIRI if you ask me, but the FCC is mostly to blame due to the poor wording of the mandate.
The FCC (and NAB) are going to drag this on as long as possible, simply because they may have to backpeddle to "fix" their mistake as not to make them look like fools (too late in my book). The FCC also needs to decide whether or not to make good on their wording disallowing one company from owning both spectrum licenses. The FCC has their work cut out for them. Do they go against their word on the licensing, or do they fix the problem of making dual-band receivers available for sale?
All of this fluff has hit the stock hard, and made consumers wary of buying or investing in satellite.
Question his stock investment or interest in satellite all you want, but Michael has a point, and it's valid.
If the FCC should deny the merger and set a deadline for the exclusive sale of the combined radio then the following might happen.
Both companies will probably provide free programming and end any subsidy to manufacturers. Both will offer a la carte service that all new customers can access. Since their potential audience will double their subscriptions should increase. The new radios will become a standard offering in all cars since the incremental cost of adding the service will be the cost of the external antenna, and that is already combined with On-Star in that product offering. Expect to see On-Star type service in all cars in the future, since that has to be a profitable business.
That’s probably the best scenario for all concerned, even the stockholders. IPods can’t do sports and the Internet still need a “cell phone like” data channel which won’t be free. Satellite radio is here to stay, no matter what the FCC decides. Stay tuned.
Neither XM not Sirius's satellites or hardware are at all compatible, they were specifically designed that way. Should the merger ever go through, your shiny new Stiletto 2 or Inno will not work at all with the other service and you will have to either cancel or buy a new, more expensive, dual band radio. 2 Companies that flaunted the law, spent lavishly and now want a government bailout. I love my XM but tough luck.
pissed
fjallfoss.fcc.gov/prod...
why where they meeting because hartlieb is correct on many of his points...
On Jul 11 06:30 PM crfceo wrote:
> The NAB is using this article against Sirius. Thhe NAB is leaving
> out the commentary by people who disagree with Michael Hartlieb.
>
>
> fjallfoss.fcc.gov/prod...
yep your sort of correct and thats exactly why the fcc mandated a dual device for the consumer to use and chose the service they wanted based on content.
Satellite Radio System
Visteon's Satellite Radio System features an innovative head unit that can accept the decoded signals of either XM or SIRIUS satellite radio transmissions – thus avoiding the need for two different head units for the two services. Given two subscription options, consumers can identify their preference of satellite radio service providers at the point of purchase. Installation of the required components can be done at the factory or in the dealership.
This system is designed for integration with current automotive audio systems, utilizing existing space for the head unit and one package location for the satellite receiver module. In addition, Visteon is well positioned to provide the consumers with the next generation satellite data service features like dynamic traffic to integrate with navigation or audio systems.
Benefits
Provides a single-design head unit making it easier and more cost-effective for vehicle manufacturers to allow consumers to choose their satellite radio service provider without increased radio complexity.
Requires a small, external antenna to receive satellite and ground-based network digital signals.
Provides the ability to display the channel name and number, artist and song title through its enhanced radio display capability.
Uses current radio pre-sets to store your favorite channels for quick access and requires no additional displays with the enhanced Human Machine Interface (HMI) capabilities.
www.visteon.com/produc...
The premis of this article is "consumer fairness". Both of these companies have provided a great service to consumers for the low price of around 13 dollars per month. To date is has cost nearly double that amount to provide the service. I don't know how much more "fair" two companies could be.
thats a first generation interoperable device which requires a change out of some hardware in the form of a trunk mounted box most likely..and was planned as a transitional device prior to dual devices..
and this is based on what both sirius and xmsr told the fcc.
SIRIUS WORLD
If I were to develop an interoperable radio, and no one wanted it....the chances are high that I would always have an interoperable radio...worth nothing. Visteon has in fact produced one. It only requires a different tuner. NO ONE WANTS IT!
xm investor
proof is how fast the NAB submitted a copy of this letter to the FCC...
xm investor
....THIS ARTICLE IS A BLACK-EYE TO SEEKING ALPHA.
Seeking Alpha's credibility has gone down the toilet!!!
And, this is not just because I disagree with this guy...I disagree with many Seeking Alpha contributors; however, this is the first contributor that I have seen that I can emphatically say should not have been published. SEEKING ALPHA'S EDITOR SHOULD BE FIRED!
lOOK AT THE FILINGS HE MADE WITH THE FCC and how long ago that was.
Sirius and XM made the Sirius/XM radios long ago and have tried to fool everyone into thinking putting two radios together was a big undertaking. Just look at what is in handheld devices and you can see that two radios in one case is no breakthrough technology.
Yes it looks strange to hold stock in a company and do what he is doing.
Look at were Sirius would be today if Sirius and XM had made those radios available.
Many myself included think that Sirius with a higher market share were the customer had a choice would have put XM out of business.
Sirius and XM were told to make and sell the radios and that is most likley what they did but did not make make them commercially available
In other words did not turn them on so that they can pick up the other service.
Mr Hartleib stopped the Lawsuit that would have given Sirius what can be thought of as a umbrella protecting them from the shareholders.
As a stockholder of Sirius i feel that i have been cheated and lied to. Those radios should have been turned on years ago.
With XM to Sirius converters that we know are on the market one has to wonder why Sirius has not offered them to people that would like to switch to Sirius. That i see as more proof that Sirius did and does not want to do what is best for stockholders.
Then we have morons like nab,rainbow group and evrey other leach demanding that they be given tradio spectrum because its good for competion.
Well mr. writer am I missing something or do we not have the ability to listen to am fm or just a plain c/d. I choose to pay my 12.95 a month to listen to my music.
Now the radios will work with eachother I spoke to both radios about merger what the heck are you talking about they need new radios
also how can you say you are a shareholder i think you lie in your article and work for mr. jackson who by the way should be getting a fine from fcc for his comments about mr. obama.
This merger has really shown how bad our goverment,congress,sen... and all else are crap and CAN NOT DO THEIR JOBS THAT I PAY FOR THEM TO DO.
OIL PRICES,WAR WERE HEADING INTO A FRIGIN DEPPRESION AND JOHN KERRY MR. WANNABEE PRESIDENT SPENDS HIS TIME WRITING ABOUT HOW THIS MERGER SHOULD NOT HAPPEN LOL WHAT A JOKE YOU ARE MR. WRITER AND ALL ELSE WHO OPPOSE THIS MERGER GET A FRIGIN LFE YOU MORON
P.O. Box 7078
Laguna Niguel, CA 92607
March 17, 2008 SENT VIA UPS and E-mail
Attn: William M. Regan Attn: Jeffrey P. Fink
Simpson, Thacher & Bartlett, LLP Robins, Umeda & Fink, LLP
425 Lexington Avenue 610 West Ash Street, Ste. 1800
New York, NY 10017 San Diego, CA 92101
RE: Greg Brockwell et al v Sirius Satellite Radio, Inc. et al
Index No: 600819/07
Dear Mr. Regan and Mr. Fink:
As a member of the Class who will be filing an objection to the proposed settlement, and as per my telephone conversation with Mr. Fink on this day, this letter is respectfully submitted as a formal request for:
Transcript of the deposition of Mel Karmazin
All documents provided to plaintiff’s counsel regarding Morgan Stanley’s financial analysis of the merger. All interrogatories, questions and answers. Agreements between Morgan Stanley and Sirius Satellite Radio. All documents provided to plaintiff’s counsel regarding the additional fees of up to $7.5 million and documents and/or internal memos detailing the parameters and/or reasoning to determine whether or not to pay these proposed additional fees.
I am advised by Mr. Fink that the aforementioned information is under a confidentiality agreement and/or a protective order between the parties at the request of defendants and their counsel. This information is material to my filing of the Opposition to the Proposed Settlement and is warranted to a member of the Class, as my interests (as well as the rest of the Class) are not being represented in a satisfactory manner. Other members of the Class will be joining me in the Opposition of the Proposed Settlement and/or opting out of this Class. One has to wonder why plaintiff’s counsel would allow defendants and their counsel to obfuscate this case and shroud it in a cloak of secrecy when the plaintiff’s counsel is supposed to be providing clarity and complete disclosure of all material facts to the Class and its members.
Page 2
March 17, 2008
In speaking with Ms. Schmachtenburg today, she informed me the preliminary hearing is scheduled for March 31, 2008. I advised her I would be filing an opposition to the proposed settlement on my behalf and on behalf of all others similarly situated. I also informed her I was having difficulty obtaining the necessary discovery from counsel and that I would be seeking the Court’s assistance.
Please provide me with the requested information as soon as possible as time is of the essence.
Sincerely,
Michael Hartleib
MH/th
Encl
Cc: Honorable Richard B Lowe III
c/o Miss Schmachtenburg
xm investor
I think you have been duped into posting Mr. Hartleib's article so that he can have more attention, which in my opinion is what he really wants. I no longer think the guy is a NAB mole, although the NAB played him like a fiddle on this one. Proof of his desires here is the fact that he keeps re-posting his prior filings here, which merely gives him a new forum to get the attention he appears to so desire. I mean, seriously (or siriusly as those on board call it), how can the guy claim to own so much stock in the company, yet take actions that will financially ruin the company... He has probably lost a lot of money in the stock of this company as its PPS went down, and at this point, he has lost all perspective. My unprofessional advice is that he either sell all his shares and forget about the company, or instead double, triple or quadriple down on his investment, and get on board the merger,...
(background: mundane talk show, static, signal fading in and out"
"AM sucks!"
"You've heard FM..."
(background: station after station of obnoxious used car commercials")
"FM sucks, too!"
"Now, hear what you've been missing..."
(background: 15 second montage of the greatest songs from top 5 music genres, combined with a winding sound reminiscent of the Beatles "A Day in the Life", culminating with the Voice of Howard Stern saying, "It's happening, Robin!" while some bimbo riding the Sybian screams in ecstasy, "Oh my GOD!!!!!!!")
1 second of silence....
"Sirius/XM Satellite Radio...Finally, radio that doesn't suck!"
I've said it before, and I'll say it again...
SIRIUS WILL BE KING!!!!!!!!!!
your not getting it they the companys told the fcc the dual chips would be available mid 2004.which has came and went!
and sirius flat out stated in public forum after forum these devices were coming to market by 2007..
where are they, you as and investor have been harmed by this failure to deploy as mandated.
hartlieb is correct if a consumer is forced to pay and change out hardware as you now admit the visteon device require some componet change out...the mandate was about seamless change at no cost to the consumer for hardware..
if you were as well schooled as you claim you would understand the issue. sirius and xm can stream each others content today based on available spectrum which is limited.and this is what they plan to do when the merger is oked..
but if you have been following the documents you also understand sirius only requires a tuner mod or update to activate the concept.
however xms devices, based upon the same filed documets indicate clearly still need other areas modified to work with both services.
later you will need to purchase a new device if you want to access the content of both companys on a single device.
this is the effect that the fcc tried to prevent by requiring a truly dual device.
and the companys would have each paid half the cost/burden for the device.
how is this not a harm to the public and investors which were told time and time again the devices were coming.by sirius management.
xms position has been well maybe some devices but not all!
sirius has indicated within filings they have made under contract truly dual chipsets in lots of only 200 and even forwarded them for testing by certain oems.
you also accept at face value what your told by these companys.
hes also correct on the issue both companys used