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FCC Chairman: No XM – Sirius Merger

Federal Communications Commission Chairman Kevin Martin said yesterday that a proposed merger between XM and Sirius would constitute a monopoly.

Boston University T. Barton Carter professor of communication law says this is similar to the FCC’s refusal to allow Echostar and DirecTV to merge, in which they considered “satellite television” as a distinct niche from cable rather than part of a “multichannel video programming” category. Similarly, “as long as they define the market that’s in competition as satellite radio” rather than just radio, a merger would create a monopoly.

Satellite television and cable are, in most cases, in direct competition. Most people who can get dish can also get cable and vice-versa and the programming content provided is virtually identical. Indeed, if the FCC wants to spur competition, they’d be better off allowing DirecTV and Dish to merge while ruling that exclusive content deals, like DirecTV’s monopoly on NFL Sunday Ticket, are anti-competitive.

By contrast, satellite and terrestrial radio are at this point distinct animals. The former is a national subscription market and the latter a mostly local advertising based model. If XM and Sirius merged, they would have a monopoly on providing commercial free coast-to-coast radio stations, feeds of popular networks that would stay true throughout a cross country drive, and so forth. While people could obviously refuse to subscribe to their service, the merged companies would have much less incentive to keep prices down and innovate their programming than exists with two major competitors.

Full disclosure: I’m a longtime subscriber to DirecTV and its NFL Sunday Ticket package and a dissatisfied Sirius customer likely to switch to XM after my year is up.

I’ve been more-or-less satisfied with DirecTV and prefer it to cable in most respects, although its monopoly on NFL Sunday Ticket gives me much less leverage in pitting them against my cable company.

Sirius’ external interface is lousy. I don’t have a tape deck in my car, so I’m forced to rely on the FM transmitter. It would likely be just fine if I lived in a rural area or were a long haul trucker. In a densely populated metropolitan area, though, there are no spots on the FM band where there is not at least a weak signal at some point during a daily commute. Also, with the exception of NFL Network, which is pretty good although commercial laden, I simply don’t like Sirius’ programming much. Their music channels are slapdash, with the effect that the hard rock channels contain things other than hard rock, their Outlaw Country station often plays things like Loretta Lynn or Roy Orbison, and so forth.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. I don’t have a tape deck in my car, so I’m forced to rely on the FM transmitter. It would likely be just fine if I all over rural southern Idaho, and I’ve had no problem with the FM trans option – though I can’t listen on my home stereo see more

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  2. (Prohiphop.com) Talib Kweli “Can rap circles around your favorite MC”…..& Don’t expect a Jean Grae album anytime soon. Q Tip + A Hip Hop Band = The Renaissance Get That Money Man….XM……we know you need it.

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  3. Dale B says:

    James,

    I have XM and am relatively happy. My car does not have a cassette or an aux in. I tried several FM transmitters and none of them are great. The best, and one I use today, is by C Crane company.

    http://www.ccrane.com/radios/fm-transmitters/fm-transmitter.aspx

    It’s not a perfect solution but it’s the best I’ve tried. It can be set to any frequency and is quite stable. The batteries last a very long time, like several weeks. I’ve also seen hacks on the web to increase the power out. Haven’t tried that yet as it is acceptable in its present form.

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  4. legion says:

    I’ve had Sirius for a couple of years now, and I’m extermely happy. I regularly drive all over rural southern Idaho, and I’ve had no problem with the FM trans option – though I can’t listen on my home stereo until I find a place to put the mini-antenna outside ’cause none of my house’s windows can see the satellites.

    I don’t listen at all to Stern, but I rather like the selection of music channels; a little variation keeps me from feeling like I’m just listening to my own CD collection.

    And to get back to the actual topic (:-), I’m glad they’re not merging. This market is looking a little like the early days of cable, when there was a significant difference between what was on broadcast TV and what HBO, et al, could do… I wonder if 10 years from now there’ll be a dozen or more sta radio providers to choose from?

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  5. The likely alternative to merger is one (probably Sirius) going under. But ‘going under’ is a relative term. The assets would likely be sold for pennies on the dollar and a XM competitor would emerge with a lower debt to face off against XM with a higher subscription rate. Let the market decide.

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  6. [...] Outside The Beltway Posted By: Doug Mataconis @ 8:11 am || Permalink || || Categories: Economics, Monopolies TrackBack URI:http://www.thelibertypapers.org/2007/01/19/fcc-chairman-we-wont-approve-an-xm-sirius-merger/trackback/ Read more posts from Doug Mataconis • • • [...]

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  7. DC Loser says:

    James – I am an XM subscriber and am pretty happy with the service. I understand your issue with the FM modulation, as that’s what I have to use in my car. In the DC area, you’re pretty much out of luck looking for a clear FM channel. However, my car has a manual antenna that I just retract, reducing its capability to pick up regular FM transmissions. I find that by retracing the antenna and putting the modulation on 88.1 (the only station close enough to interfere is WAMU at 88.5), I have pretty good luck with a good signal.

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  8. James Joyner says:

    DCL: Makes sense. Unfortunately, my antenna is automatic. I suppose that’s an easy fix, though.

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  9. DC Loser says:

    try http://www.xmfan.com for the discussion boards about XM. Beware as they are very anti-Sirius. I’ve listened to Sirius in a rental car and it sounded okay by me. But if you like hard rock channels to be only hard rock, or outlaw country stations – I think XM will fill your needs.

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  10. James Joyner says:

    DCL:

    Thanks. My wife and I are both ready to give XM a try.

    I have eclectic tastes, and will listen to everything from bluegrass to hard rock to adult contemporary. But if I’m in the mood for Metallica, I don’t want to hear Roy Orbison and if I want some Waylon and Hank, I don’t want Loretta.

    Indeed, the only Sirius music channels that I’ve listened to that are programmed well are the bluegrass and oldies stations.

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  11. Cam says:

    Ahem. Try out Patriot 144, especially from say… 9-midnight James. :)

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  12. James Joyner says:

    Cam: Heh. I usually surf the Sirus music channels during commercial breaks on the talk stations. Mostly NFL Channel, though :)

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