WASHINGTON, D.C., April 19, 2007 - Satnews Daily - The Competitive Enterprise Institute (CEI), a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government, urges federal regulators to approve the merger of Sirius Satellite Radio and XM Satellite Holdings and proceed with steps to modernize antitrust rules for all industries.
CEI said that while some critics have charged that a merged XM/Sirius would “dominate” the market for satellite radio, they ignore the fact that both companies are actually relatively small players in a much larger market of news and entertainment that includes broadcast networks, commercial radio, cable television, the Internet and more. The approximately $13 billion in market capitalization of both companies pales in comparison to $57 billion value of one major cable company alone.
In addition, many of the loudest complaints about the proposed merger have been coming from the companies with which the new entity would likely be competing. Given the intense battle going on between XM and Sirius, not allowing them to merge would most likely result in either one or both continuing to lose money and being absorbed by their rival entertainment companies, a good deal for their competitors, but not necessarily for their customers or investors.
“Regulators also should refrain from using the merger review process to extract a parade of concessions from these struggling companies,” said CEI vice president and director of Technology Studies Wayne Crews. “Meanwhile, antitrust policy should allow aggressive competitive responses to the combination. Wall Street, investors, programmers, consumers, already-poised rivals, and new entrants collectively will discipline more thoroughly than could the Federal Communications Commission. That’s as it should be.”
CEI has long encouraged policy makers to reform antitrust law and its enforcement in the interest of fostering increased competition and innovation. CEI has assembled an “Antitrust Skeptic’s Bibliography,” and filed comments with the Antitrust Modernization Commission, which sent its recommendations to President George Bush earlier this month.
