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XM/Sirius Merger Draws More Controversy

New York — Several groups have stepped forward recently to state opposition to the proposed XM and Sirius satellite radio merger, but XM and Sirius claim that the opposing groups are linked to terrestrial radio interests, rather than the general public.

On March 29, the Alabama House of Representatives passed a resolution opposing an XM/Sirius merger and today, a report by research firm The Carmel Group was released in opposition to the merger.

The Carmel Group is credited with presenting research that played a role in regulators’ rejection of a merger between EchoStar and DirecTV in 2002.

In today’s report on satellite radio The Carmel Group claimed, “If this merger were approved, every subscriber would be beholden to a single satellite radio monopoly, resulting in less service, less affordability, less diversity and less choice in content and hardware.”

XM said The Carmel Report was paid for by the National Association of Broadcasters (NAB), and the Alabama resolution was sponsored by a legislator who owns a terrestrial radio station.

In a joint statement, XM and Sirius said, “For over 25 years, the NAB has objected to the evolution of communications technology, including satellite television, ‘drop in’ radio stations, low-power radio and low-power TV band devices. In addition to their opposition to satellite radio. NAB opposed the creation of satellite radio fearing that it would compete with terrestrial radio, so it’s no surprise that it’s producing biased ‘studies’ hostile to the Sirius/XM merger by NAB-paid consultants.”

The Carmel Group senior analyst Jimmy Schaeffler said that the Group had originally opposed the XM/Sirius merger before the NAB asked it to publish a white paper to that effect.

A third group, called the Consumer Coalition for Competition in Satellite Radio, filed a study with the Federal Communications Commission finding that an XM/Sirius merger would be anticompetitive, but is also reported to have ties with broadcasters.