The NAB battles the XM / Sirius merger

Engadget caught this ad funded by the National Association of Broadcasters (NAB) which lampooned the proposed merger of XM and Sirius. Unfortunately, this got them into hot water with MasterCard, whose well-known "Priceless" campaign was the source of the NAB's knock-off, so that particular campaign was pulled.

Engadget caught this ad funded by the National Association of Broadcasters (NAB) which lampooned the proposed merger of XM and Sirius. Unfortunately, this got them into hot water with MasterCard, whose well-known "Priceless" campaign was the source of the NAB's knock-off, so that particular campaign was pulled.

It did bring to my attention, however, that the NAB was putting lobbying dollars into blocking the XM / Sirius merger, which if you think about it, is rather odd. The NAB has nothing to do with satellite radio. From the NAB web site:

The National Association of Broadcasters is a trade association that advocates on behalf of more than 8,300 free, local radio and television stations and also broadcast networks before Congress, the Federal Communications Commission and the Courts.

Why should a consortium of companies that compete with satellite radio stir up antitrust fears? If we were to distill antitrust to its fundamentals, it's supposed to prevent companies from acquiring enough market control to charge artificially high prices. Should the newly consolidated satellite radio broadcasting company opt for higher prices, however, wouldn't that be an extremely good thing for the NAB, given that it would make their mostly free offerings that much more competitive?

In other words, the NAB should welcome the consolidation if it truly would lead to the abuses predicted by antitrust. The fact that they don't leads me to believe that the real fear is that a combined XM / Sirius would pose better competition than before to NAB-affiliated companies. That's hardly a reason to oppose the XM / Sirius merger, and means the NAB is fighting the merger on selfish anti-competitive grounds.

As noted before, a combined XM / Sirius would have loads of competition, the most important being terrestrial radio broadcasters. There is no reason to block the merger unless people forget the point of antitrust and create ridiculously narrow defintions of the marketplace that ignore XM / Sirius' real competition.

NAB "concerns" seem a part of that organization's ongoing battle with satellite radio, as befits a lobbying group created to defend the interests of its members (parallels to the CCIA exist here). In a position paper on the subject of satellite radio, the NAB complains about satellite radio "breaking the rules" by broadcasting localized content. This is a bit like trying to torpedo a murder case based on procedural grounds, and I don't know why government should agree to do something that would protect NAB members from competition with satellite broadcasters. Rules have a purpose, and they aren't supposed to be anti-consumer. Worse for the NAB, however, that position paper explains in a single paragraph why government regulators shouldn't lose any sleep over the merger of XM and Sirius:

From a competitive standpoint, hometown radio broadcasters have little to fear from satellite radio companies. With 96% of Americans listening to free, local radio once a week and three-quarters tuning in daily – and satellite occupying less than 1% of the market – hometown radio continues to be the dominant source for compelling audio entertainment. That said, satellite radio companies should not be allowed to flaunt the terms of their FCC licenses.

Beware the consolidation of satellite radio, even though it is an inconsequential part of the market. Guess the NAB isn't paid for its consistency.

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