NAB President: XM-Sirius Merger "Not About the Consumer"

We may earn a commission from links on this page.

Today, Sirius CEO Mel Karmazin hit Capitol Hill again to tell a Senate committee that the proposed merger would bring "more choice, lower prices" to consumers since it's trying to compete with a larger ecosystem that includes traditional radio and MP3 players. Yet at NAB '07 yesterday, NAB President David Rehr told attendees that it "certainly would not be in the consumer's benefit."

His full remarks on satellite radio after the jump.

This next clip is Mel Karmazin, familiar to some of you as the CEO of Sirius satellite radio, testifying before Congress recently. As you will see, he is attempting to define moving from two companies to one company as a merger, not the duopoly to monopoly that it is.

And on this point, Mel and I agree.

This merger will not be approved.

No matter how much Mr. Karmazin and everyone else at Sirius and XM use the word, it is not a merger they seek. It is a monopoly. It is a government sanctioned monopoly.

Now some of you might not be aware I am an economist by training. I ask you, when has a monopoly ever served the interests of the consumer?

In 1997, when the FCC authorized two nationwide satellite radio operators, it specifically prohibited them from merging. The bad business decisions of XM and Sirius — should not be rewarded with a government bailout in the form of a monopoly.

This certainly would not be in the consumer's benefit.

It will be a huge consumer headache because the companies use two different technologies which are not compatible with each other. Like beta and VHS. No, this is not about the consumer. It is not about advancing technology. It is about lining the pockets of financiers and corporate executives.

A monopoly is a monopoly is a monopoly, and we at NAB will continue to adamantly oppose it.


But as Orbitcast points out, NAB has "a long history of lobbying in Washington against the development of satellite radio." Its intense opposition—detailed at length in Orbitcast's post—bespeaks its vested interest. In September, speaking about satellite and internet radio, Rehr said he had "news for our competitors: 'We will beat you - as we have beaten those change agents in the past.' "

Of course, everyone has vested interests even as they spout that they're only acting on your behalf. Whether or not the merger is truly anticompetitive or totally consumer friendly remains to be seen, though if Karmazin keeps his word, it's looking more like the latter.


The NAB: A history of hypocrisy [Orbitcast]