Sirius CEO Mel Karmazin has become a regular fixture on Capitol Hill of late.
He was at his third hearing–this one before the Senate Antitrust subcommittee–in as many weeks yesterday making the case that the merger of XM and Sirius would be good for everybody concerned.
Karmazin is doing his best to accommodate Washington, pledging to keep prices down, value up and even to give subscribers some of their money back if they chose to bock adult channels. That should make FCC Chairman Kevin Martin and the people at Parents Television Council happy.
But the stumbling block, and the key, is the definition of the marketplace. If, as Karmazin argues, satellite is a direct competitor to a host of other services including terrestrial radio and iPods and wi-fi and I don't know what all, then whether or not he agrees to keep prices low, the merger should pass anti-trust scrutiny.
But if, as broadcasters and one antitrust attorney argued yesterday, broadcasters are not a direct competitor for satellite's national, bundled, mobile audio service–expect to hear those words together a lot–and iPods and wi-fi are not sufficient competition to be a governor on prices or to spur better service or new technology, then the merger would indeed turn a duopoly into a monopoly and raise more red flags than a bullfighters convention.
In the latter case, all the promises of price caps, unless they are in perpetuity, could not prevent the eventual harms of market monopoly.
Broadcasters have a tough argument, citing robust competition and a host of voices when seeking deregulation of radio ownership caps, then having to argue the opposite in fighting the merger. But they have a point in saying that while satellite radio competes with local radio, it is not a two-way street since local radio does not compete on the national stage with a bundled, mobile service.
I was pleased to hear Karmazin flatly refuse to accept braodcast-like indecency standards as a condition of securing the merger, and standing up to Senator Sam Brownback (R-Kan.) by saying he would not pledge to scrub his airwaves of osbcenity, pointing out that he didn't know what Brownback would consider obscene.
I was less pleased with his amendment that if the FCC could come up with a clear definition of what he shouldn't air, he would accept such regulation. Give me a speed limit, he said, and I'll follow it. What if it is 20 miles an hour on what was built to be an information superhighway?
By John Eggerton