Comments submitted to the Federal Communications Commission in the matter of XM Satellite Radio Holdings and Sirius Satellite Ra

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Comments of the Competitive Enterprise Institute


· Introduction: Antitrust Heightens Vulnerability to Political Predation

· Opposing Viewpoints, Choice and Democracy Safer in a Media-Saturated World

· Antitrust’s Sherman and Clayton Foundations Occupy Shakier Ground Today

· The Illegitimacy of External Market Definition

· Satellite Radio Disadvantages

· Competitive Market Alternatives Transcend Obvious Substitutes

· Orbiting Around the Real Issue: Competing Satellite Platforms

· Antitrust Law “Barriers to Exit” Impede Needed Retrenchment

· Imposed Concessions or Conditions Are a Fundamental Error

· FCC Proceedings’ Proper Focus

· Conclusion

Introduction: Antitrust Heightens Vulnerability to Political Predation

The Federal Communications Commission’s (FCC) recent hearings on media ownership, today’s debates over “net neutrality,” content regulation, a la carte programming pricing, and—the current instance—disputed mergers between communications firms like XM and Sirius signify that a heavy government role in determining the ownership structure of major media in the U.S. remains the default presumption. This should not be the case.

Satellite company mergers are one element of an evolving marketplace that increasingly magnifies consumer choice and ability to customize information; not merely information received, but also that which individuals themselves create or assemble for distribution to others. That personalization coexists with media enterprises that exist on a gigantic scale. Bureaucrats cause untold damage when they undermine network industries’ efforts to orient themselves, to attain the scale appropriate to fostering customization, and to achieve such feats as moving global information to the exosphere as satellite operations do. Liberalizing spectrum for future satellite and communications operations—not restraining the private operations of those that now exist—should be FCC’s focus.

The stakes are high for the communications industry at every level, from broadcasters to content providers to infrastructure providers. Controlling media structure facilitates regulating it across the board, whether through outright interventions or threats.

As CEI routinely emphasizes in regulatory agency filings, all parties stand to gain more from FCC rollback than from a re-legitimized regulatory regime. As in other frontier industry antitrust battles, this clash promises the greatest consumer bounty if regulators and opponents restrain interventionist impulses.

Worse, communications industry merger foes, like broadcasters, increase their own vulnerability to future political predation by resurrecting hackneyed smokestack-era antitrust arguments opposing this merger. Whatever genuine competitive threats broadcasters face from an energized XM-Sirius, that very broadcast industry—which faces a media ownership debate and even new threats of a “fairness doctrine”—will itself be rendered more vulnerable following successful restraint of XM-Sirius. Prospects of being let alone are better when healthy competitors flourish. Rather than calling the satellite industry a “separate market” in need of bureaucratic administration, all parties will ultimately profit from its being recognized as what it is—one of many ascendant competitive options populating media and entertainment.

If the FCC believes the technology marketplace cannot discipline itself and that micromanagement—even a forcibly mandated corporate non-integration (or withholding of permission, which amounts to the same)—qualify as sensible public policies, then no intervention is off-limits for any competitor. Meanwhile, regulators and competitors overseas notice how we treat our frontier industries, and emulate it—sometimes to the detriment of American business seeking to expand operations.