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Van Hollen: Nix XM-Sirius union
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by Michael Evert
Monday, April 14, 2008
Wisconsin Attorney General J.B Van Hollen asked Thursday the Federal Communications Commission to reconsider the pending merger between Sirius and XM satellite radio.
In a letter addressed to FCC Chair Kevin Martin, Van Hollen asked the FCC to consider taking action against the proposed merger, which has already been approved by the U.S. Department of Justice.
“The requested license transfer by XM-Sirius would eliminate competition in the satellite radio industry,” Van Hollen wrote. “The combined XM-Sirius companies would feel free to raise prices, stifle innovation and reduce program diversity.”
Van Hollen added a post-merger subscription plan has emerged that may result in a satellite radio monopoly detrimental to the public interest.
“This combination will result in a single corporation controlling access to all nationally available satellite radio,” he wrote. “The U.S. Department of Justice’s failure to take action puts the burden on the FCC to take into account a broader public interest standard.”
The letter to the FCC comes seven months after Van Hollen wrote a similar letter to Assistant U.S. Antitrust Attorney and DOJ official Thomas O. Barnett, in which he voiced concerns over the possible merger. Van Hollen’s concerns had little effect, as the DOJ approved the merger.
University of Wisconsin law professor Richard Heymann said any opinion on the effects of the merger could not be formed without extensive knowledge of the complexities of the radio market.
“This is a very sophisticated issue,” Heymann said. “You can’t just sit back and make judgments about a very complicated issue like this without knowing all the facts.”
Heymann gave past examples of how concerns over possible monopoly formation often turn out to be benign, such as the worries over the AOL-Time Warner merger in 2001 that later proved unfounded.
Heymann also said opponents to the merger opposed it on oversimplified grounds, and said a detailed knowledge of the economics of the market was necessary to make a sound judgment on the issue.
XM and Sirius transmit roughly 100 channels apiece, compared to 41 broadcast signals available in Milwaukee. Some parts of rural Wisconsin receive fewer than 15 broadcast signals, according to Van Hollen.
After the DOJ approved the merger March 24, approval by the FCC remains the final regulatory hurdle for the two companies before the full merger can take place.
Concerned Citizen (April 14, 2008 @ 7:37am):
Van Hollen appears to be another polico with long ties the traditional radio and the industry that helped build his his career. Of course he is against the merger -some of his contributors and his political allies have special interests in seeing the XM - Sirius Merger fail - traditional old fashioned radio (who is very worried because Satelite IS their competition! Let this merger go through... Let the market place decide if Satelite radio will work. We all have people with hands in our pockets (Gas Companies (no problem with that Exxon/Mobile merger eh?). Let the market place decide and let this merger go through.
Anonymous (April 14, 2008 @ 11:52am):
What's the problem? If people don't want the service they don't have to buy it. Forget these special interest people and politicians and let the public decide if they want the service. This is not a neccessary service and everyone will benefit from this merger - except maybe those who are trying so hard to kill it. They are the ones who are afraid of losing some business to a better performing company. FCC, get on with it and let this merger go through.
George Riley (April 14, 2008 @ 12:39pm):
I just do not understand what the $#@&*$ is going on with this FCC people. Trying to destroy something good should haunt them forever. Why not let the people decide what is good for them ?
Anonymous (April 14, 2008 @ 2:13pm):
Why should I have to subscribe to both services just to listen to the MLB and NFL? How is that in my best interest?
Ernest Wilson (April 14, 2008 @ 2:52pm):
It is amazing how people can be swayed. The money fighting to stop this merger is from terrestrial radio firms. Terrestrial radio firms do not want the competition from Satellite radio. Wisconsin Attorney General J.B Van Hollen must not trust the department of justice so we need to ask him why we need D.O.J.
J.B Van Hollen gives two craps about the public getting a better deal; it boils down to Terrestrial making more money. Maybe the D.O.J. should request and investigate this J.B Van Hollen and his new found friends.
Anonymous (April 14, 2008 @ 4:29pm):
Are there not people breaking laws in his state? Does he not have anything better to do with his time and taxpayer money than to push an agenda of a lobbying group? Perhaps he and the other taxpayer paid public officials who bend to the NAB should seek other employment. 3 percent of the american public CHOOSES to pay for satellite radio. His STATE probably has about 100,000 listeners...and he chooses to ignore his own duties to his constituents to get involved in such a small matter. I wonder how much was in the envelope?
Anonymous (April 15, 2008 @ 11:00am):
amen
Anonymous (April 15, 2008 @ 11:46am):
THe merger is terrible for consumers. THe only people that seem to be supporting this are the stockholders as they are seeing their investment fall into the toilet due to poor management and outrageous talent compensation agreements. The government shouldn't be in the business of establishing a monopoly just to bail out two failing businesses.
The argument that "if you don't want it, don't buy it" is irrelevant to the question of monopoly. Perhaps if it was a service you cared more about you'd not like that option. Sort of like if food prices rose and someone said "just eat tree bark, it will sustain you" I doubt you'd be thrilled and claiming the consumer has a choice to pay for food or eat tree bark so it's all good.
Anonymous (April 15, 2008 @ 3:48pm):
I don't understand why the FCC even gets a say in this matter. They should only regulate the 7 (now 10) dirty words and which frequencies can be used. This is a pay service that the FCC should have no impact on. As others have pointed out. This merger is a great thing. The only people who do not want it to go through are the people who are the competition (terrestrial radio). This "consumer advocacy crap is really starting to get to me. I don't care if XM or SIRIUS raise their prices. . .if they do. . .and I don't like it. . .I drop them like I dropped Comcast! Hey, in that case I switched to Dish Network!! I went from land based to satalite based entertainment! That was COMPITITION!!! And Dish network beat out Comcast in my case. How is this any different to satalite radio and terestrial radio? It isn't!!!
Anonymous (April 15, 2008 @ 4:09pm):
The guy (or girl) who posted his / her support for not allowing the merger to go through is trying to make a good point. . .but failed.
There is a stark difference between food and entertainment! I need food. . .I don't need entertainment.
I agree that "if you don't want it, don't buy it" is irrelevant monopoly cases. Monopolies are bad for all markets, food, gas, energy, and yes even entertainment. If someone controls the market. . .then you are a slave to their bidding.
Take Comcast for example. They are my only choice for Cable service provider. I don't care if there are other cable service providers in the world. . .'cause I don't' get them. To me that is a monopoly of sorts because I'm forced to pay what Comcast wants me to pay for my entertainment.
NOW! Having said that. I actually do have a choice. I have two satellite companies that I can choose from. Dish Network & Direct TV. Yes they compete with each other. . .but their main competition is Comcast. . .and other "terrestrial" based cable providers who have a monopoly of sorts in their own markets.
Now if Direct TV and DISH merged. . .I would never pretend to argue that they would have a monopoly in the entertainment business. . .as the terrestrial based cable providers are still the primary competition.
How is this different than XM & SIRIUS v.s. the NAB. There is no difference. There is no monopoly if to satellite companies merge, because they aren't selling satellite. . .they are selling entertainment. Just like the NAB. A monopoly only exists when you don't have any options in an industry.
I can choose between Comcast and Dish Network. Just like I can choose between SIRIUS and Terrestrial Radio.
If people like Van Hollen want to take up this argument. . .then why don't they attack Comcast for having a monopoly on cable in my area?
Anonymous (April 15, 2008 @ 4:25pm):
pfft... I'm a subscriber not a shareholder and i want the merger to go through. Explain this - if they don't compete why would the NAB need to spend a dime to try to prevent it?
Anonymous (April 16, 2008 @ 7:44am):
Good points on this not being a monoploy. The NAB's vigorous and sustained lobbying against it is all the proof one needs to see that an XM-Sirius merger is not anti-competitive.
In addition, the truth is if there is no merger there is a very good chance that there will eventually be only one satellite company in the end anyway. The high price of competition is keeping both companies from being profitable. How long either one can last operating at a loss is up for debate.
Anonymous (April 16, 2008 @ 3:31pm):
Wow, I have never seen so many scared people over a content delivery system. I just bought an Ipod and now I am wondering why I bought Sirius! So I am not sure why this is such a big deal except that our congressmen are as crooked as the NIB.
To bad, like the record industry they could not see past their short peckers. Look what happened to them. Ipod killed the radio star!
Anonymous (April 17, 2008 @ 12:38pm):
Don't let the special interests (terrestrial radio) from stopping this merger.
Van Hollen is HIDING behind the "I'm only doing this to protect the consumer" defense.
There are plenty of options for competition, and there will be plenty more (cell phone networks, for example).
These foot dragging, self-aggrandizing politicians are dragging us down.
Anonymous (April 21, 2008 @ 8:26am):
I have several ipods. I still listen to sirius more than them.
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