The League of Rural Voters has released an analysis comparing the 2002 EchoStar/DirecTV merger attempt, and the proposed Sirius/XM merger.

The report argues that in the EchoStar/DirecTV case, the FCC determined that there were at most only two DBS providers. Opponents of the Sirius/XM merger (like the NAB) have tried to describe it in the same terms. But the LRV study thinks otherwise.

"Satellite radio is often the best source for music, news and talk in rural areas," said LRV Executive Director Niel Ritchie. "However, it is far from the only choice. Sirius and XM are two small pieces in a very broad market. Rural consumers have an array of audio entertainment choices today and will continue to do so after the Sirius-XM merger."

The analysis, "Sirius/XM vs. EchoStar/DirecTV: A Fundamentally Different Merger for Rural Consumers," was filed recently in support of the companies' application with the FCC.

Here's what they found:

Distinct Market Definitions
The paper cites the 2002 FCC analysis of the EchoStar/DirecTV market, which specifically defined each local market as the two DBS providers and the local cable monopoly. This is in contrast to the "broad and competitive audio entertainment market in which satellite radio competes," that the LRV study found, a market that they consider to include terrestrial radio, Internet radio, iPods and other MP3 players, CD players and mobile phones.

The FCC also found there were significant barriers to entry in the DBS merger. This concern is moot in the satellite radio market, given the multitude of other competitors that have already entered the field and the anticipated release of future competitors such as HD radio and the Apple iPhone.


Different Impacts on Rural Consumers
The finding on the DBS product market gave rise to a number of concerns, including the reduction of viewpoint diversity and the creation of a monopoly in areas where there was no cable. "The FCC found that DBS operators contribute to viewpoint diversity by playing a 'gatekeeper role' that 'clearly affects' which entertainment and news programming is available," the paper says. "The audio entertainment market does not present the same concern, since it includes many different providers/editors."

Additionally, LRV's analysis concludes that the FCC's concerns in the EchoStar/DirecTV case do not apply to satellite radio because of its small saturation in a rapidly growing market, noting "...unlike the DBS merger reviewed by the FCC five years ago, the proposed merger between XM and Sirius comes at a time of strong and growing competition... In fact, in contrast to the DBS context, even a merged satellite radio provider would possess a slight market share and be constrained by the multiplicity of other media."

If you want to read the full report by the League of Rural Voters, check it out here (PDF).