Consumers group attacks XM/Sirius


The American Consumer Institute says that as the debate on whether or not the pending merger of DARS providers XM and Sirius "meanders in and out of meaningless distinctions and political rhetoric," it is important to remember that it turns a distinct duopoly into a monopoly. Approving it does not warrant serious consideration. Addressing the question that there are numerous alternatives to DARS, ACI notes that the critical question as to where a consumer might go to replace the unique attributes of DARS, which include exclusive programming, a nationally-ubiquitous signal and a wide variety of program options just to name three, is rarely even addressed by proponents of the merger. ACI further argues that the consumer benefits seem minimal, and the acceptance of a sunsetting price ceiling "resembles an offer of sleeves from a vest," and went on to note that competition is the best way to control prices.

"Shorn of rhetoric and spin, the merger would create a monopoly in what is now a duopoly in a distinct line of business with clear-cut boundaries — delivery of nationwide, mobile, diversely-programmed audio entertainment services. A merger would result in less choice, elimination of spirited competition between the two companies, very likely higher prices and, on balance, less program diversity over time. It should not be allowed."