The Consumer Federation of America, Consumers Union and Free Press on Monday urged the FCC to reject the proposed merger between Sirius Satellite Radio and XM. The groups argued in a report that the pairing would eliminate competition and negatively impact American consumers.
"Leaving one company to monopolize the satellite radio industry would result in higher prices and fewer choices," CFA Research Director Mark Cooper said. CU Vice President Gene Kimmelman added that the companies have failed to make the case for ending the explicit prohibition on mergers between satellite licensees.
Using the FCC's own data on radio stations, the organizations attempted to show that satellite radio and terrestrial radio are not close substitutes and argued that Sirius and XM's offerings do not compete with iTunes or Internet radio.
Sirius and XM responded with this joint statement: "Examining this merger on its merits shows that the lower prices and greater choices that will result, including for the first time two a la carte programming options, are clearly in the public interest and will help strengthen competition in the vast audio entertainment market."
The companies pointed out that other public interest and consumer-oriented outfits have expressed support for the merger, including the Competitive Enterprise Institute, League of Rural Voters, League of United Latin American Citizens and the NAACP.
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