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from: Lasar's Letter

Prometheus Radio Comes Out Against XM-Sirius Merger

From Lasar’s Letter, July 11, 2007
By Matthew Lasar

The group that blocked the Federal Communications Commission’s 2003 attempt to relax its media ownership rules has filed comments in opposition to the proposed merger of XM and Sirius satellite radio.

“A rigorous assessment of the merger’s impact on the public interest can lead the Commission to only one conclusion,” writes the Prometheus Radio Project in tandem with several other groups: “the merger would be contrary to the public interest.”

The July 9th comments, filed by Prometheus, the Media Access Project (MAP), and the U.S. Public Interest Research Group (US-PIRG), put the media democracy movement squarely against the marriage of the two satellite services.

Prometheus, a group that advocates for low power community radio stations, successfully sued the FCC in 2004 when the Commission a year earlier attempted to dramatically loosen its restrictions on how much media corporations can own.

Ironically, Prometheus’s opposition to the merger puts the group on the same side as its biggest adversary, the National Association of Broadcasters. But with a big difference: the Prometheus filing argues that if the FCC does approve the union, it must do so with some public interest based strings attached.

Their case against the merger

The Prometheus filing contends that XM and Sirius rely on an “overly broad definition of the relevant market” in making their case for a union. Sirius, XM, and their allies have argued that because the two services face competition from terrestrial (or free) radio, HD Radio, mp3 players, and Internet radio, their merger cannot be considered a monopolistic threat to broadcasting.

But Prometheus, MAP, and US-PIRG warn that this claim sets a dangerous precedent.

“Expanding the definition of the relevant market for competition and competitive products would open the floodgates for mergers among other media entities, on a theory that a competitive market exists and therefore the public would suffer no harm,” they write. “Moreover, a broad view of the relevant market will also undermine the Commission’s basis for sustaining media ownership regulation.”

The filing also bucks the trend of civil rights groups that have filed on behalf of the merger, praising XM and Sirius for broadcasting niche shows that serve their communities.

“Being left with one provider, these communities will have no option with respect to price and content,” the Prometheus group argues. “While one of two options itself may not be ideal, at the least, there currently exists a choice between two providers which offer similar types of programming.”

On the other hand …

The Prometheus filing does suggest that if the FCC approves the merger, it should do so with strings attached:

* Set aside four percent of the merged entity’s resources, priced at cost, for non-commercial, educational programming. The joined company should have no editorial control over the programs.
* Make the new firm lease access to editorially independent commercial programmers who are not affiliated with the merged entity.
* Make the new entity divest itself of some of its spectrum, and auction it off to other groups.
* Establish a “must-carry” rule for the new company that will ensure that if satellite radio is allowed to provide local shows in the future, the merged firm will have to carry non-commercial stations, educational stations, and low power stations.