Consumer Groups Push Issue on XM-Sirius
Consumer Federation of America, Consumers Union, Free Press Write Federal Communications Commission
By John Eggerton -- Broadcasting & Cable, 5/12/2008 12:27:00 PM
As the Federal Communications Commission continues to consider whether or not to allow XM Satellite Radio and Sirius Satellite Radio, the nation's two satellite-radio companies, to become one, a group of consumers groups wrote the agency putting in its pitch for "or not."
Writing for the Consumer Federation of America, Consumers Union and Free Press, CFA research director Mark Cooper called it a "roadmap to monopoly" and asked the FCC to throw up its own roadblock after the Justice Department gave the deal a green light.
They strongly opposed the merger. But if the FCC does approve it, they said, it needs to make it clear that it is not a precedent for other media-ownership mergers, nor a roadmap for others.
Justice has come under fire from some states’ attorneys general and FCC commissioner Jonathan Adelstein for its conclusion that the merger would not post an anticompetitive threat sufficient to block or condition the merger.
Cooper and company were on the same page. The letter sought to outline the "fundamental flaws" in the DOJ decision, which they said "abandons all of the most basic principles of antitrust analysis," and how the FCC should look at the deal differently. The FCC already must look beyond simply competition issues to include its impact more broadly on the public interest.
"The DOJ concludes that XM and Sirius have differentiated their products just enough so that they do not compete with one another on critical attributes, but not enough to prevent others from competing with them," Cooper wrote. "Thus, because XM-Sirius have pursued strategies that have locked in current customers by failing to provide interoperable radios and are differentiating their product with highly specialized marquee programming, and locked out competition for auto manufacturers for four years with long-term contracts, the DOJ concludes that the merger will not reduce competition enough to harm the public."
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