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Editorial: Satellite Radio

More competition, not less

It will be interesting to see where Federal Communications Commission Chairman Kevin Martin comes down on the merger of the nation's two leading satellite-radio companies.

Especially in light of his efforts to limit the growth of cable companies, in particular Comcast Corp.

If approved, the merger of Sirius Satellite Radio and XM Satellite Radio Holdings will create one giant company that basically controls this nascent medium.

The FCC approved the $67 billion merger of AT&T and BellSouth in 2006, giving AT&T control of more than half of the telephone and Internet access lines in the nation. (Didn't the government break up AT&T in the 1980s?)

As Ma Bell was reborn, Martin pushed through caps that prevent cable operators from having a market share above 30 percent. Comcast, the largest cable operator in the country, has a market share of about 27 percent.

Comcast sued the FCC earlier this month, alleging that the cap is "arbitrary, capricious, and an abuse of discretion."

That about sums up Martin's reign at the FCC.

Now, he and the FCC are poised to OK the merger of Sirius and XM. The deal would create one behemoth controlling the satellite-radio market.

If Martin backs the merger, it will be hard for him to reconcile his support for caps on the cable industry. Granted, the cable companies have long lacked real competition - but that is changing as telephone and Internet technology improve. (So why do cable bills keep climbing?)

Historically, antitrust laws are in place to protect economic freedom and promote competition in the marketplace. Going from two big satellite-radio companies to one hardly achieves that goal.

The Justice Department, after a year's review, has concluded that combining the companies won't lessen competition, and "therefore is not likely to harm consumers." It said changing technology and other alternatives to satellite radio would maintain competition and give consumers choices.

If that's the case, what's to stop Microsoft from merging with Apple? How about a merger between Dell and Hewlett-Packard? Better yet, let the two big satellite TV providers - DirecTV and the DISH Network - hook up.

Sure, customers can get music from free radio or over the Internet. But if the satellite-radio merger goes through, the customers who bought those devices will basically have one place to get the service.

Over time, guess what will happen to service and prices without any competition?

 
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