Interest Group Works to Block XM-Sirius Merger

An interest group is fighting back against the XM-Sirius merger, sending a commissioned study to the FCC that claims the combined company would constitute a monopoly.

The Consumer Coalition for Competition in Satellite Radio (C3SR) was formed shortly after the merger was announced "to counter the potentially dim prospects facing subscribers of satellite radio under a monopoly provider," its Web site says.

C3SR claims consumers would pay more for less, and has repeatedly argued publicly that the deal poses no benefit to consumers. The study was authored by J. Gregory Sidak of Criterion Economics, who was a former Deputy General Counsel for the FCC.

"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.

He argued that satellite radio is a distinct antitrust market, contradicting XM and Sirius' claims that they have competition in traditional broadcast media. Sidak also argued that it 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, he argues.

"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, a founder of C3SR.

Reale is a George Washington law student and an XM radio subscriber. He has also worked at a lobbying firm since 2004. He and the organization hopes the study will play a part in the FCC and DOJ's decision whether or not to approve the proposal.