Andre Yoskowitz
29 Mar 2007 21:42
The proposed XM-Sirius merger now has another hurdle to jump. The Consumer Coalition for Competition in Satellite Radio (C3SR) is sending a commissioned study to the FCC claiming that if they companies were to merge it would constitute a monopoly.
The group formed after the merger was announced "to counter the potentially dim prospects facing subscribers of satellite radio under a monopoly provider," claims the group's Web site.
The study, which was commisioned by J. Gregory Sidak (a former Deputy General Counsel for the FCC), claims that the merger would have no benefit for consumers.
"No matter how you slice it, dice it or package it, the merger of XM and Sirius would establish a monopoly, which are typically characterized by a lack of economic competition for the good or service that they provide, as well as a lack of viable substitute goods," Sidak says.
The study argues that the merger meets the definition of monopoly by any reasonable market definition.
"Even if one includes AM, FM, and HD radio, the market power of the combined company is enough to cause concern" the study says.
"This study confirms, empirically, what we have been stressing since before this merger was even announced: subscribers do not view their satellite radio service as a substitute for other forms of entertainment, and a merged provider would be able and motivated to raise prices and cut back the programming that so many listeners value and depend on," said Chris Reale, one of the founders of C3SR.
The group hopes that the study will at least play a part in the FCC's decision to approve or not approve the merger.
Source:
BetaNews