Senator Herb Kohl opposed Sirius-XM merger
Thursday, May 24, 2007 at 9:19 AM
Tags: 2, XM
Senator Herb Kohl (D-Wis.) recently sent a letter to the Justice Department and the FCC calling on regulators to oppose the Sirius-XM deal.
Kohl's opposition of the merger is not necessarily new, but being the chairman of the Senate's Subcommittee on Antitrust, Competition Policy and Consumer Rights, it does hold some weight. He is in fact the first chairman of the four Congressional panels that held hearings on the merger (Sen. Kohl's subcommittee held the hearing back in late March) to come out against it publicly.
Senator Kohl takes the position that satellite radio is in fact it's own confined market, and not part of an overall audio entertainment marketplace.
He also didn't buy the argument that future technologies threaten the stance of the satellite radio market, writing that "no other technology available today is a substitute for the satellite radio."
"Our concern is the marketplace today. Consumers should not suffer the price increases likely to result from a merger to monopoly because of a vague hope that new technologies may deliver new competitive alternative sometime in the future," he continued.
The problem with Senator Kohl's conclusion is that, if in fact satellite radio is defined as it's own finite market, then this definition opens up either Sirius or XM for takeover by a terrestrial radio corporation (such as CBS Radio) without fear of anti-trust issues.
And that is scary.
[Reuters & Wall Street Journal]
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Comments
I'll bet dollars to donuts that one of Kohl's biggest contributers is the NAB...
Not surprising since almost all US reps are owned by one giant corporation or another (anyone who thinks the government represents the people is naive and/or stupid), I just hope the Satellite radio industry buys a few Senators of their own or the NAB will crush them eventually.
Posted by: MikeHunt ? | May 24, 2007 9:53 AM
You'd lose that bet, Mike. Senator Kohl is in a safe district, and does not accept any PAC money. He (mostly) self-financed his 2006 re-election campaign, and still spent about 30 times what his opponent spent. He does have financial ties of some sort to a Wisconsin radio station.
Check out www.opensecrets.org for details on his campaign finances.
Posted by: RoadRunner ? | May 24, 2007 10:38 AM
I'd add that while looking for the kinds of conflicts, Mike brings up, that I was supprised by how small-potatoes NAB is in the big picture. Compared to many other player the $4 million in campaign contributions and $20-30 million they spend on lobbying are just a drop in the bucket.
Admittedly, I'm just looking at the NAB proper. I'm sure their members also individually contribute and lobby...
Posted by: RoadRunner ? | May 24, 2007 10:43 AM
Sen Kohl is dumb...of course SatRad is a direct competitor to other electronic media...terrestrial radio in particular!
if they weren't, why would the NAB be going absolutely crazy over this whole deal? they hate it because the competition against their archaic and non-innovative business model will be the strongest its ever been.
Posted by: dumpus | May 24, 2007 3:47 PM