Copps Rips SatRad Merger
July 29, 2008 at 5:20 AM (PT)
In his dissent issued late MONDAY evening, FCC Commissioner MICHAEL J. COPPS ripped the merger of SIRIUS SATELLITE RADIO and XM SATELLITE RADIO as creating a monopoly that will hurt consumers.
"The majority’s own findings provide a compelling case for rejecting this merger," wrote COPPS, enumerating that "(1) We must assume that this is a merger to monopoly; (2) The merged company will possess the incentive and ability to impose monopoly price hikes on consumers; (3) Consumers will need protection for the foreseeable future because (a) the merged company’s incentive and ability to impose monopoly price hikes will only grow over time, and (b) the emergence of another satellite radio competitor is unlikely; and (4) The pricing restrictions imposed on the merged company will expire in three years. The inescapable logic of the majority’s findings is that by 2011 satellite radio subscribers will face monopoly price hikes by a company with the incentive and ability to impose them. No one has been able to explain to me how this could possibly serve the public interest."
No one has been able to explain to me how this could possibly serve the public interest
COPPS noted that in a similar case, the Commission rejected the satellite TV merger, but in the radio case has decided "that satellite radio consumers will be better served by a regulated monopoly than by marketplace competition." "I understand why the companies would prefer to escape the rigors of competition," he added. "What I cannot understand is why the majority thinks consumers will be better off without it." COPPS pointed out that the majority made its decision while limiting the relevant market to satellite radio and discounting the effect of competition from other technologies and terrestrial radio.
For his own part, Commissioner JONATHAN ADELSTEIN, who was reportedly pushing for greater concessions from the companies for a "yes" vote but ultimately decided to turn the merger down, wrote in his dissent that the Commission should in the merger process have resolved interference issues between satellite radio and wireless communications in the 2.3 GHz band.
Chairman KEVIN MARTIN praised the companies for meeting the burden of proof that the merger serves the public interest, commenting the agreement to offer a la carte programming, additional programming obligations, and open tech standards for receivers. While Commissioner ROBERT MCDOWELL issued a similar, brief statement, the deciding vote, Commissioner DEBI TATE, declined to issue a concurring statement.