NAB Calls Satellite Merger Anticompetitive, in FCC Meetings

NAB took its case against the Sirius/XM merger to the FCC in a series of meetings with commissioners and their staff where it warned of dangers to local broadcasters of the proposed merger. NAB representatives met with Comrs. Copps, Adelstein and McDowell, as well as Michelle Carey in Chmn. Martin’s office, according to a letter filed at the FCC. But a separate study claimed to refute some NAB arguments.

NAB said it warned “against the creation of a regulated satellite radio monopoly subject to conditions, given the applicants’ record of violations of the Commission’s rules.” In a presentation against the merger, NAB said: “Radio stations do not compete in the national mobile market occupied by Sirius and XM, but Sirius and XM do compete for listeners in local radio markets… Sirius/XM could cross- subsidize low-cost a la carte offerings and predatory advertising rates with monopoly rents for its national mobile audio services. Sirius/XM [also] could lock up exclusive contracts for sports and other attractive programming, like cable TV.”

Meanwhile, TMF Assoc. refuted arguments in a Carmel Group study that found the merger would offer consumers “less service, less affordability, less diversity, and less choice.” TMF, an independent firm, said the study “ludicrously overstates the case for opposing the merger and fundamentally misinterprets the competitive environment for satellite radio.” TMF said it expected Sirius/XM to offer more detailed analysis of satellite radio “subscriber profiles and attitudes” versus those of terrestrial radio and iPod listeners.

“The competitive environment for satellite radio is far less clear-cut than Carmel Group asserts,” TMF said: “In our view, an argument could be made that the combination of terrestrial radio and devices such as MP3 players represents a valid substitute for satellite radio, both today and in the future.” But TMF also said a number of FCC regulations would have to be changed, such as the restrictions on one company owning both satellite radio licenses. “We believe one path the FCC might consider is to ensure that the regulatory landscape allows other in-car audio services to be developed, as both the technology and marketplace evolve,” the firm said.