NAB quotes law firm Crowell & Moring saying the proposed satellite merger is “clearly anticompetitive.”
The firm prepared an analysis that was sent to lawmakers and the FCC. NAB hired it to conduct the analysis.
“The proposed merger between XM and Sirius will eliminate the only effective competition among the two providers of satellite DARS and is clearly anticompetitive,” the authors concluded.
“The growth of satellite DARS over the past five years, and the pricing of those services, illustrates that the parties’ offerings are not price constrained by other forms of audio content delivery. Instead, the only restraint on the ability of either firm to charge supra-competitive prices, offer less-than-competitive quality of service or output, or purchase content for less-than-competitive prices, is the very existence of the other firm as its only competitor,” the company found.
“The proposed merger would replace this duopoly market structure, set up specifically by the FCC to ensure at least some level of price and service competition, with a monopolist in the downstream subscription market (and a monopsonist in the upstream content market) that is unrestrained in its ability to harm competition. There simply is no ‘fix’ that will restore the competitive structure of this marketplace, and thus DOJ should challenge the transaction to preserve existing and future competition.”