One More Jab at Sirius/XM Merger

The National Association of Broadcasters took one more opportunity to voice its opposition to the proposed merger between Sirius and XM last week in comments sent to the Federal Communications Commission.

In a letter from the organization’s president David Rehr, the NAB said if the merger is approved, the new company will control all of the spectrum allocated for satellite radio in the U.S., effectually barring any competitive entry in the foreseeable future. Rehr said the merger will create the opportunity for widespread abuse of power, and consumers ultimately will be the ones to suffer.

The NAB believes competition between the two satellite radio companies has served consumers of the technology well with each company differentiating itself through programming and equipment. Rehr said despite what satellite radio executives are claiming to be merger-specific public interest benefits, all “alleged” benefits would be more likely to occur without the monopolistic merger.

For example, “both of the parties are free today to unbundle their channel offerings… (and) a smaller programming package for less than $12.95 per month is possible without a merger,” Rehr said.

“The repackaging of channels from both services into one offering is an illusory consumer benefit because it will result in the elimination of existing channels or formats.” In the long run, he said, reductions in overall program availability will decrease program diversity.

Another “hollow” promise Rehr said XM and Sirius are making is of reduced prices for less overall programming being a benefit for consumers. The NAB head said any price concessions offered after the merger will “clearly be temporary, unlike their monopoly power, which will lead to price increases in the future.”

Satellite radio officials have said that changes in the digital audio distribution marketplace justify the reversal of the commission’s rules governing competition in the sector - namely that two companies must hold separate licenses. But Rehr said this notion is false, citing the group’s incorrect definition of the competitive marketplace in order to “obscure” the merger’s monopoly in satellite radio. “It is simply wrong to equate internet radio, local AM/FM and HD radio, MP3 devices, and iPods with satellite radio,” Rehr said. “No other audio service is an effective substitute for a national multichannel mobile audio programming service, (nor can they) be expected to restrain the monopolistic impulses of a united XM/Sirius.”

Driving the NAB’s stance home, Rehr reminded the FCC that it previously rejected a merger between DIRECTV and EchoStar’s DISH Network years ago to avoid a monopolistic satellite TV service. The broadcasting group is urging the commission to “recognize the value of continued competition in satellite radio and the adverse consequences” of the potential merger.









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