One of the knocks on the proposed satellite radio merger is that a combined Sirius/XM would resemble a combined EchoStar/DIRECTV - an entity that kept regulators from approving the DBS merger in 2002. Now, a new study shows that there are clear differences between the two scenarios, and the failed attempts of DBS to merge should not be used as a barometer to judge against satellite radio’s attempts now.

According to the League of Rural Voters, a group that recently went public with its support of the merger, there are clear differences between the DBS market in 2002 when EchoStar and DIRECTV tried to merge and the expanding audio entertainment market today. In the EchoStar/DIRECTV case, the FCC determined that there were only two DBS providers, but “the commission’s review of the proposed merger in 2002 provides no guidance to the analysis applicable here.” Further, the League said, “this is because the product markets at issue in the two transactions are fundamentally different.”

The paper cites the 2002 FCC analysis of the EchoStar/DirecTV market, which narrowly defined each local market as the two DBS providers and the local cable provider. This is in contrast to the “broad and competitive audio entertainment market in which satellite radio competes,” a market that today includes terrestrial radio, internet radio, iPods and other MP3 players, CD players and mobile phones. The FCC also found there were significant barriers to entry in the DBS merger. “This concern is moot in the satellite radio market, given the multitude of other competitors that have already entered the field and the anticipated release of future competitors such as HD radio and the Apple iPhone,” the study said.

As far as the impact on rural consumers goes, the study said the narrow finding on the DBS product market gave rise to a number of concerns, including the reduction of viewpoint diversity and the creation of a monopoly in areas where there was no cable. “The FCC found that DBS operators contribute to viewpoint diversity by playing a ‘gatekeeper role’ that ‘clearly affects’ which entertainment and news programming is available,” the paper says. “The audio entertainment market does not present the same concern, since it includes many different providers/editors.”

Additionally, the league’s analysis said that the FCC’s concerns in the DBS case do not apply to satellite radio because of its small saturation in a rapidly growing market, noting “the proposed merger between XM and Sirius comes at a time of strong and growing competition… In fact, even a merged satellite radio provider would possess a slight market share and be constrained by the multiplicity of other media.”