Heavy hitter backs XM/Sirius


Economist and former FCC Commissioner Harold Furchtgott-Roth has written a piece called "An Economic Review of the Proposed Merger of XM and Sirius," presented to the FCC under commission from the prospective newlyweds. Under these circumstances, it will probably not come as a major surprise that he finds the merger palatable.

Furchtgott-Roth is a free marketer, who became a visiting fellow at the American Enterprise Institute after leaving the FCC, and founded his own company, Furchtgott-Roth Economic Enterprises.

He said, "After studying various economic factors and potential changes in competing communications services, I conclude that American consumers have a wide and rapidly expanding range of choices for communications services that compete with XM and Sirius. Additionally, these competitive choices discipline the prices that XM and Sirius charge subscribers today and will continue to do so regardless of whether the firms merge. I believe that government agencies should afford these companies the flexibility "to respond to rapidly changing market conditions."

SmartMedia observation: If both companies are solvent, why shouldn't we benefit from their competition "to respond to rapidly changing market conditions?" Who will respond the best? Won't competition make both companies better? The truth is that companies hate competition – it's much easier if you have the market to yourself – and that's why we have antitrust laws and government watchdogs to make sure the natural corporate desire to eliminate competition is countered. It does not appear that Furchtgott-Roth has added anything new to the equation. He says it's crazy out there – he's right – but it's crazy for everybody. He says XM and Sirius should be allowed to merge – he's wrong.