The Basic Arguments - Radio World

The Basic Arguments

To begin the satellite hearing, Conyers asked, “If we are going to define the market as broadly as the merger supporters advocate, what kind of precedents are we setting?” He wondered how consumers who already have satellite radio equipment would be affected if the merger is approved. The FCC and Justice Department must review the proposal.
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To begin the satellite hearing, Conyers asked, “If we are going to define the market as broadly as the merger supporters advocate, what kind of precedents are we setting?” He wondered how consumers who already have satellite radio equipment would be affected if the merger is approved. The FCC and Justice Department must review the proposal.

Ranking minority member Lamar Smith, R-Texas, said proponents believe the efficiencies of a merger will allow them to give consumers more choice while opponents say approval would allow Sirius and XM to raise prices without providing customers any new services.

The satellite merger is one of the highest-profile lobbying tests to date for new NAB leader David Rehr, and he repeatedly called the proposed alliance a “government-sanctioned monopoly.” He testified that the satellite radio companies have a history of violating their FCC licenses and “cannot be trusted.”

By their own admission, XM and Sirius are not failing companies and should not receive a government bailout, he said.

Gigi Sohn of advocacy organization Public Knowledge said, “The salient question is whether consumers will be better off.” She called broadcasters hypocrites for opposing the deal “given their own merger tendencies.” And she laid out three conditions for possibly approving the merger; more below.

Mark Cooper of the Consumer Federation of America was passionate and clear: Mergers that result in a monopoly are bad for consumers in any way, shape and form. “We reject that consumers are better off with a benevolent monopoly. Without the stick of competition, innovation will slow down, rather than speed up.”

I have to give kudos to Sirius’ Mel Karmazin for abandoning his written statement to simply talk. His main point: He believes a merged company is pro-consumer and the satellite radio companies need to convince regulators that the merger will be better for consumers, not worse. “Because if we can’t, the merger won’t happen.”

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