Study Claims Satcaster Merger Enhances Competition; NAB Refutes
June 14, 2007 at 2:25 PM (PT)
Former FCC Chief Economist, GEORGE MASON UNIVERSITY Professor of Law & Economics and ARLINGTON ECONOMICS principal THOMAS HAZLETT today released "The Economics of the Satellite Radio Merger," which explores the financial and strategic rationale behind the SIRIUS-XM merger. The study -- which concludes that the merger "offers the potential to yield substantial efficiencies, benefit consumers and enhance the dynamics of competition within the audio entertainment marketplace" -- was prepared for XM and SIRIUS and filed today at the FCC as part of the companies' merger application.
This report defies logic.
HAZLETT said, "After a thorough analysis, it is my opinion that the merger of XM and SIRIUS will predictably enhance consumer welfare. The NAB's staunch opposition to the merger illustrates their similar expectation. The improved economic vitality of a combined satellite radio company would drive industry innovation, promote competition and enhance programming and pricing options for customers."
But NAB Exec. VP DENNIS WHARTON was quick to respond, saying, "This report defies logic. The study's contention that consumers would benefit from a monopoly merger of the only two satellite radio services is laughable, as evidenced by the fact that the CONSUMERS UNION and the CONSUMER FEDERATION OF AMERICA are opposing the merger."