Adam on the XM-Sirius Merger

by on February 23, 2007

People seem to be not very good at tooting their own horns around here, so I just wanted to note that Adam was prominently quoted in Wednesday’s Wall Street Journal editorial $ on the XM-Sirius issue:

Beltway critics of the deal see a media monopolist around every corner, scheming to limit the public’s access to content. And it’s true that the merger would create a lone satellite radio company. But a pure monopoly is one that exists in a market where there are no close substitutes. By contrast, a combined Sirius-XM would have to compete not only with free broadcast radio but also with MP3 players, online radio and even music channels offered by cable providers.

Heaven only knows what the cellular companies will bring to the party. They’re already gearing up to provide more video options, but there’s nothing stopping Verizon or Cingular from coming up with a device that includes a couple of dozen radio stations to compete with satellite.

Which is why the real danger here isn’t the creation of a “monopoly,” unless you define the market in a way that has no resemblance to the real world. The bigger concern is that regulators will repeat the satellite television mistake and in the process reduce consumer choice. “The reason for this merger is not to exclude others from the market,” says Adam Thierer, who follows telecom issues at the Progress & Freedom Foundation. “It’s to make sure they can compete in the broader market against the various players they face–serious competitors that have satellite radio providers scrambling for their lives.”

The most vocal opponents will be traditional radio broadcasters, who will want the deal scotched outright, or at least conditioned on satellite operators being prohibited from offering local services–news, weather, traffic–that would compete with their own offerings. Legislation to this effect has been floating around for the last couple of Congresses, courtesy of Republican Representative Charles Pickering of Mississippi.

I find it amazing that the broadcasters don’t even try to cloak their rent-seeking in any kind of higher principle. Or at least, their argument—that allowing XM to offer local traffic and whether would undermine emergency brodcast services—is so transparently self-serving that I can’t imagine anyone taking it seriously.

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