One paper, two opinions


The Washington Times gave some space to a pair of Competitive Enterprise Institute members who made the case for allowing the XM/Sirius merger to go through. Interestingly, the same paper published a study opposing the merger back in August. The authors are Wayne Crews and Alex Nowrasteh.

Their take on the arguments that XM and Sirius have agreed to sufficient safeguards that the merger should be allowed to go is unique. They say one of them, agreeing to cap their subscription prices, is actually bad for consumers. Calling it a self-imposed price control, they argue, "…price controls hurt consumers: A low price is not good if it means inferior service or discourages needed investment and innovation." They say prevention of the merger amounts to "corporate welfare" for those the services would compete with.

Over the summer, two other collaborators, J. Gregory Sidal and Hal J. Singer, had a different take, writing, "It is a knee-jerk reaction among conservative commentators to bless most mergers under the belief that these transactions reflect the salubrious workings of the market. But conservatives should also reject the idea of taking two unregulated competitors and creating in their place a brand-new regulated monopoly through the merger approval process."

TVBR/RBR observation: We always thought that the problem with monopolies was that they didn’t need to worry about such mundane issues as customer service, investment in product or innovation. The reason there are two satellite audio services is to preserve those very things. The one and only reason to grant this merger is if one or both are about to go under. They say that is not the case, so the case should be closed.