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| Satellite Combo Is Called an Attack on How Mergers Are Analyzed |
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2.01.2008
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The FCC and DOJ lack the authority to create a rate-regulated monopoly for satellite radio, two economists say; and the “preemptive concessions” of freezing subscription prices and offering a la carte choices will not benefit consumers.
That’s the opinion of J. Gregory Sidak and Hal Singer of Criterion Economics, who have opposed the merger in previous public statements. They authored a report about “lessons for high-tech industries” based on the proposed Sirius/XM merger.
The article was pointed out by the law firm Fletcher, Heald & Hildreth in a blog note to clients this week. It is available as a free download.
Among other things, the authors call the proposed merger a “direct attack on the standard way in which mergers are analyzed” because of its unorthodox approach to market definitions and its “preemptive concessions to assuage third parties.”
“In concocting the phrase ‘audio entertainment,’ XM and Sirius invented a new product market definition that finds no support in precedent or in the accepted principles by which the FCC, DOJ and FTC analyze the competitive effects of a proposed merger,” they wrote.
Sidak and Singer wrote an op-ed piece in the Washington Times last summer against the merger.
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