The proposed merger of XM Satellite Radio and Sirius Satellite Radio should be approved by the Federal Communications Commission (FCC) only if the deal passes antitrust scrutiny and only if the Commission imposes conditions “that will result in greater program diversity, increase consumer choice and keep prices in check,” Public Knowledge told the Commission in comments filed today.
Public Knowledge said in its filing: “If the proposed merger survives the scrutiny of an antitrust analysis, the only pertinent questions are 1) whether the merger would benefit the public interest, and 2) whether denying the merger would harm consumers. Absent a merger, the two companies would likely avoid investing in programming that meets the needs of underserved communities. In contrast, a merged company could provide more diverse programming at better prices.” The conditions Public Knowledge recommends are:
â€¢ the new company supplies consumers with pricing choices such as a la carte or tiered programming;
â€¢ the new company makes 5% of its capacity available to non-commercial educational and informational programming over which it has no editorial control; and
â€¢ the new company does not raise prices for three years after the merger is approved
In addition, Public Knowledge said there should be no conditions imposed on the merger that would limit the ability of the satellite companies to offer local programming or would limit the ability of consumers to record songs from the services. If the merger is properly conditioned, Public Knowledge recommended that the FCC revoke the 1997 license conditions which said the satellite companies should not be able to merge.
“It is clear that a merged satellite company will be able to offer a stronger and more comprehensive service to consumers than would two weakened companies,” said Gigi B. Sohn, president and co-founder of Public Knowledge. She noted that when the merger of satellite TV rivals was denied, the separate companies were unable to provide a competitive check on the rise of cable rates.
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