NAB's Rehr: XM-Sirius Merger 'Would Be Devastating For Local Broadcasters'
March 13, 2007 at 1:41 PM (PT)
NAB President/CEO DAVID REHR sent a letter yesterday to Rep. JOHN CONYERS, Chairman of the House Judiciary Antitrust Task Force, regarding several issues related to the proposed merger between XM and SIRIUS. In the letter, which was also sent to every member of the task force, REHR points out that while local broadcasters do not compete with the satcasters "in the relevant national market for deciding whether the merger should be approved," the NAB is opposed to the merger because local broadcasters do compete on a local level. "Simply put," REHR wrote, "every person who listens to satellite radio is one person not listening to a local radio station, which affects a station’s ratings and, in turn, ad revenues."
Every person who listens to satellite radio is one person not listening to a local radio station.
REHR also noted that broadcasters' specific concerns are that a united XM-SIRIUS will be able to exercise monopoly control over its prices and programming. "It is no coincidence that XM and SIRIUS currently charge the same $12.95 per month," REHR wrote. "Also, XM and SIRIUS will no longer need to compete with each other for exclusive content or to develop superior equipment. A combined XM-SIRIUS also will be able to offer money-losing products like a low-cost a la carte package of channels, or charge predatory advertising rates, and offset the lost revenue with the monopoly rents it can charge for its national, mobile radio services. The impact of these and similar monopolistic activities would be devastating for local broadcasters."