Rep. Boucher's pro-merger piece

Tuesday, November 27, 2007 at 11:47 AM
Tags: 2, XM

XM Sirius MergerRepresentative Rick Boucher (D-VA) wrote a piece that ran in both the Washington Times (yesterday) and a similar piece that ran in BusinessWeek (a week or so ago).

In both, Boucher dismisses antitrust concerns by building a case as to why satellite radio is part of a greater "audio entertainment" market, and argues that the Sirius-XM merger would benefit listeners.

"At first blush, one might conclude that a combination of the only two providers of this satellite-based service would be an obvious antitrust abridgement. In fact, the 'bumper sticker-like' campaign of merger opponents stresses the harm of a 2-to-1 combination.

The reality of the relevant market, however, is both more subtle and more compelling."

I think that's the basis of this entire argument. Whether you consider satellite radio to be within its own silo, or whether you feel that satellite radio directly competes with other audio mediums.

Rep. Boucher addresses this debate in his piece, talking about his view of the competitive landscape:

"[Regulators] often ask, 'How far would a person have to drive in order to find a substitute?' In the case of XM and Sirius, consumers don't have to drive anywhere to find a competitive alternative: They just have to hit a different button on their car stereo."

It's that ease of switching between audio mediums that, in my opinion, is the biggest case for the merger. And ultimately, it's what protects the consumer from a combined company abusing "monopolistic" powers.

Aside from the argument about whether or not a merger would create a monopoly (which has been discussed here ad nauseum), I think it's great to see Sirius-XM getting this level of public political support. The NAB is quick to point out that they got X number of Congressmen to sign a document, but there's little in public support coming from those in Capitol Hill for their cause.

[BusinessWeek, Washington Times]

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The XM number of Congressmen that NAB got to oppose the merger signed a form letter parroting the NABs misrepresentations. THe NAB is good at form letters. Original thoughts are much tougher.

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