NAB-Backed Study Rips XM-Sirius Over Lack Of Inter-Operable Receivers
February 13, 2008 at 10:53 AM (PT)
Another study commissioned by the NAB from the CARMEL GROUP to oppose the XM-SIRIUS merger focuses on the issue of inter-operable receivers and SIRIUS and XM's failure to meet their obligation to develop and bring such receivers to market.
The study characterizes the argument that the lack of inter-operable receivers means "inadequate competition between SIRIUS and XM to support the government's antitrust opposition" as a "non-sequitur (that) further break the universe of current subscribers and would-be subscribers into two distinct and separate bodies of satellite radio subscribers," new and existing subscribers. The pro-merger forces, says the study, incorrectly conclude that the merger would not change the competitive field for existing satellite subscribers because without interoperable receivers to allow for switching between providers, there is no real competition at present anyway.
"(T)he satellite radio duopolists do compete, vigorously, for both new and current subscribers," argues the study. "...(T)he real truth is that the failure to date of SIRIUS and XM to develop an inter-operable radio has occurred primarily because of the opposite of what this quirky argument posits. Indeed, the lack of an inter-operable radio occurs at best because of intense existing competition between Sirius and XM, or at worst because of premeditated collusion.... Would the DOJ permit FORD and GM to combine based upon their assertion that a lack of an inter-operable automobile, or the cost burden to switch from a FORD Explorer to a CHEVY Suburban, equates to a lack of competition between them? Perhaps most importantly, the SIRIUS-XM merger’s precedent-setting implications are vast and could establish a lightning round of similar anticompetitive proposals, in every industry."