Just Say No to Kneecapping
July 23, 2008
Wayne Crews and Ryan Young present some excellent points in favor of an XM/Sirius merger. I honestly can’t see how the FCC can keep a straight face on this one. Even though a merger will result in a monopoly in the satellite radio industry, they still have to compete with internet and thousands of terrestrial broadcast options.
A big reason Sirius and XM want to merge is that they stand to save hundreds of million dollars in costs (Oprah and Howard Stern are expensive). Those savings will make satellite radio more competitive.
While some may enjoy Howard Stern, I think Sirius is getting screwed by paying him what they do. He doesn’t bring a whole lot to the table. Really, why not have a 16 year old come in to do the show. Same thing. Another bogus point is the requirements XM and Sirius would have to meet for the merger to be approved.
One condition of appeasement for the Sirius-XM merger is that they hand over 8 percent of their channels to noncommercial and “public service” programming. Internet radio does not face this requirement.
Whoa, broadcasting for the “public service”. Doesn’t NPR already fill that role, in a half-assed manner, in nearly every market around the country?
Another condition is that they freeze their prices for three years. Meanwhile, their competitors are still free to set their own prices to reflect changing market conditions.
A third condition is that XM-Sirius must introduce á-la-carte subscription models. If this were economical, they would have done this already.
This is pure protectionism under another name. Restricting satellite radio unfairly benefits its competitors–yet another instance of antitrust regulations reducing competition.
Again, they can point out unfair and hypocritical government policies all day long but, really, what are you gonna do when the regulators have all the guns? Via Cafe Hayek