The Carmel Group, a California consulting firm with expertise in satellite radio, has issued a brief white paper (PDF) regarding the proposed merger between Sirius and XM. The paper did not mince words: “with all due respect, this proposed merger should not be approved—under any conditions—by the US government,” it concluded. Who funded the study? The National Association of Broadcasters, the trade group representing terrestrial radio broadcasters who are bitterly opposed to the merger going forward.
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While the NAB funded the report, Carmel’s work is taken seriously; it produced a similar report opposing the proposed merger between EchoStar and DirecTV in 2002-03 that was credited (in part) with preventing that merger from occurring. The new paper reuses the key feature from the earlier report, a “ping pong chart” showing the competitive responses that the two competitors made to each other’s actions over the last few years. The goal is to show that the two companies do compete with each other, and that losing that competition would be detrimental to consumers.
Back in January, before producing the report, Carmel’s senior analyst Jimmy Schaeffler noted that the NAB “does not like satellite radio” and pointed out that the group doesn’t particularly care what party is in power; it is happy to lobby either side in the service of its goals. “Even if the 2008 presidential elections bring in a new administration, most doubt whether that would make much difference,” Schaeffler said at the time. “That is because the real lobbying force in Washington, the National Association of Broadcasters, is as equally positioned to support Democrats as it is Republicans.”
Since then, Schaeffler has publicly worked against the merger, publishing an editorial in USA Today about the issue and authoring the new NAB-funded report on the merger. In the paper, he repeatedly attacks the key position that Sirius and XM executives took in recent Congressional hearings: the idea that the merger is not anticompetitive because satellite radio competes against terrestrial broadcasters, Internet radio stations, and even iPods.
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they could go ahead and merge and the justice dept can always break up (remember the phone monopoly and the oil monopoly?).
monitor the company closely and if the merger is just to provide better content and no financial or monopolistic gain is detected then leave them as 1