Satellites in Love


I haven't done any actual reporting yet on the pending merger of the nation's only two satellite radio companies, but I thought I'd link to some of the commentary that has appeared since the XM/Sirius engagement was announced. Adam Thierer has defended the deal with gusto, arguing that it might be necessary if satellite radio is to survive at all. Doc Searls is more cautious, arguing the amalgamation might lead to declining program quality and other problems (but adding that he isn't necessarily opposed to the merger). Skip Oliva and Gigi Sohn have posted sharp critiques of the National Association of Broadcasters' opposition to the deal, with Sohn calling out the NAB for its "unmitigated gall." (My favorite line in the NAB's statement: "In coming weeks, policymakers will have to weigh whether an industry that makes Howard Stern its poster child should be rewarded with a monopoly platform for offensive programming." Yeah, I could never imagine a terrestrial station giving Stern a microphone.)

Will the deal be good for consumers? If you're already a satellite subscriber, it's hard to say: You might have more channels to choose from, but the people programming them will have one less reason to look over their shoulder. (As Thierer would point out, of course, you'll still be better off than if there aren't any channels left at all.) If you aren't a satellite subscriber, on the other hand, the merger will almost certainly be good for you: The fact that the NAB is so opposed to the deal is a good sign that AM and FM outlets expect the competition to get tougher.

As for the policy questions, the most important issue isn't whether the merger should be approved. It's the fact that the FCC has licensed only two companies to go into the satellite radio business, giving the new combo a government-enforced monopoly. (There is a third satellite radio operation, called Worldspace, but aside from four channels it shares with XM it doesn't broadcast within the U.S.)

It may well be the case that the market will only support one American satellite service. The fact that Sirius and XM feel the need to merge lends support to that thesis. Then again, we only know what two companies, with two business plans, have been able to do with this technology; with other entrepreneurs locked out of the race—starting with the two enterprises that bid for licenses a decade ago but weren't able to get them—we don't know if a different approach would have been more successful. That isn't an argument for the government to block the merger. It's an argument for a freer market in spectrum.