Consumer Federation of America/FreePress: Consumer Groups Call on FCC to Reject XM-Sirius Merger
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FOR IMMEDIATE RELEASE
NOVEMBER 26, 2007
3:09 PM
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CONTACT: FreePress / Consumer Federation of America
Dr. Mark Cooper, Consumer Federation of America, 301-807-1623
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Consumer Groups Call on FCC to Reject XM-Sirius Merger
New Report Shows Lack of Competition and Little Consumer Benefit to Satellite Radio Merger Proposal
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WASHINGTON - November 26 - The Consumer Federation of America, Consumers Union and Free Press today urged the Federal Communications Commission to reject the proposed XM-Sirius merger. In their report filed with the Commission, the consumer groups argue that joining the two satellite radio companies would eliminate competition and negatively impact American consumers.
"The proposed XM-Sirius merger is not in the interest of American consumers," said Dr. Mark Cooper, director of research for the Consumer Federation of America and lead author of the report. "Leaving one company to monopolize the satellite radio industry would result in higher prices and fewer choices -- with no foreseeable public benefit."
The report details the XM-Sirius merger's many negative side-effects -- both for consumers and for the satellite radio industry. For consumers, the merger would reduce the number of channels and formats available and result in fewer cost-saving incentives. The loss of competition in the industry would cause a dramatic drop in spending on talent and retail.
The consumer groups also note how the merger standards of the U.S. government have long prohibited this kind of monopoly to protect consumers against these negative results.
"The companies fail to make the case for ending the explicit prohibition on mergers between satellite licensees," said Gene Kimmelman, vice president of international and federal affairs at Consumers Union. "The Commission should not abandon the fundamental principles that have guided its policies for the past decade to approve the deal."
Using the FCC's own data on radio stations, the consumer groups introduce new evidence showing that satellite radio and terrestrial radio are not close substitutes -- a direct contradiction to data submitted by XM-Sirius. The report details the evidence that satellite radio represents a unique consumer product, showing that it does not compete with iTunes or Internet radio, nor can its national service be in direct competition with local terrestrial broadcasters.
"The Commission should reject this merger," said Ben Scott, policy director of Free Press. "A license to use the public airwaves does not come with an entitlement to monopoly profits -- it carries with it the obligation of public service."
Read the report:
http://www.freepress.net/docs/cfacufpexparte11-26.pdf
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