I was happy to see that, after approximately 50 years of regulatory review, the Sirius-XM merger finally got approved. It was a little absurd, frankly, that it was even controversial. Just call me Grover Norquist on this one.
The strongest objection to the merger — raised primarily by broadcasters (more on them in a sec) — was that it would create a monopoly. But what makes a monopoly is not so much the existence of a single provider, but whether that provider has the ability to screw you over in certain ways (e.g., raise prices, suppress output). Here, the new company won’t have that ability. And I don’t think it’s a close question.
Unlike true monopolies, the new Sirius-XM will face substantial competition. Take cars for instance, which is satellite radio’s strongest area. When you get into your car, you have several music choices. You can listen — for free — to terrestrial radio, eagerly anticipating the next Katy Perry song. Or, you can play your own music (CDs, iPods). Or, you can purchase satellite radio. If satellite radio suddenly, say, doubled its price, then the other options would look comparatively better.
That’s why the broadcasters’ argument was so misguided. They claimed the new Sirius-XM would face no competition, but that’s obviously false. In fact, the whole reason broadcasters cared in the first place was because they compete directly with Sirius-XM. If terrestrial radio weren’t so god-awful, there wouldn’t be a need for satellite radio.
Plus, the demand for music is not exactly inelastic. If the cost of music suddenly quadrupled, I’d survive without it (I already have Thriller anyway). If, by contrast, the cost of water or electricity or broadband quadrupled — well, that’s a different story. The demand is much less elastic — you gotta have that stuff regardless of how much it costs. That’s why the competitive concerns raised in the broadband access context don’t have much relevance here.
But to step back, the real reason I’m so annoyed is because broadcasters were involved. It’s not too much to say that broadcasters — particularly, NAB, their trade association — are a force for evil in the communications world. Their primary skill is blocking — or delaying for decades — the emergence of cool new technologies (see also, The History of Cable Television).
For instance, they’ve been sitting on top of beachfront spectrum for decades, blocking attempts to do anything more productive with it. Maddeningly, a lot of them don’t even use it. It’s criminal how much spectrum sits idle on a daily basis, particularly in rural areas.
Even though they have to give some spectrum back after the digital transition, they’ll still have tons of awesome spectrum. And that’s particularly absurd since only a sliver of the population still relies on over-the-air broadcasts.
It’s really a question people should ask more often — why do we allow broadcasters to have any spectrum? Why not just take it away from them? If they only care about keeping it for must-carry rights, then grant them the frickin’ must-carry rights and boot them from the spectrum.
But anyway, merger good. NAB, bad.