This morning the Committee considers issues related to the proposed merger of the two satellite radio operators in the United States, XM and Sirius.

 

            While satellite radio is relatively new, it has grown rapidly.  Today, XM and Sirius provide audio entertainment services to more than 13 million Americans.  These subscribers listen to satellite radio primarily while driving in their cars, but some also listen in their offices, homes, and on portable devices. 

 

            Despite such successes, Sirius and XM now argue they should be permitted to merge into a single satellite radio provider – a result that was explicitly prohibited when the FCC adopted service rules in 1997.

 

In the eyes of satellite radio operators, such a restriction is out of date given the availability of programming via alternatives like digital over-the-air radio, MP3 players and other means of receiving audio entertainment.

 

            But to merger opponents, these arguments ring hollow.  In their view, satellite radio offers a unique collection of nationwide programming that – as a whole –   cannot be effectively replicated.  As such, these alternatives complement, rather than compete with, satellite radio.  Thus, to merger opponents, a satellite radio monopoly puts at risk the benefits of low prices and high quality services that only accrue from competing service providers.

 

            Today’s hearing presents us with an opportunity to test these claims.  While we welcome this discussion, I believe that the merger proponents, in this case, have a steep hill to climb.  Indeed, given the public interest in promoting competition and maximizing a diversity of media outlets, we should be skeptical of claims that new technologies necessarily “change the equation” and provide competition sufficient to restrain monopoly power.   

 

            With that said, I look forward to hearing from today’s witnesses. 

 

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