The American Antitrust Institute reiterating their anti merger stance a few days ago, and we covered the issue on February 20th in our article titled "Antitrust Institute Urges DOJ To Block Merger". The AAI stance received some press, and there are some who wonder what stances that counter this argument. Our story highlighted several contrasting opinions. The crux of the AAI argument rests on a narrow market definition that encompasses only SDARS. The AAI stance fills in their argument based on the narrow definition model. Without a narrow market definition, the AAI stance carries little weight.
That article was about my opinion vs. that which was outlined by the AAI. I am not an antitrust expert, but have followed satellite radio as well as the merger for quite some time. My opinion centers around what I believe the audio entertainment is, and how consumers interact with the various entities that deliver audio entertainment. With that being said, many may wonder if there is a more "experienced" or seasoned opinion on the proposed merger that counters what the AAI is stating. There is. The Competitive Enterprise Institute is one such organization, and their stance is that the merger should be permitted to happen.
In their own FCC filing back in July of 2007, the CEI took to task the assertions made by the AAI.
CEI brings to center stage what they term as "market definition hi-jinks". They outline where those that desire a narrow market definition are coming from, but then also highlight why such an argument is moot or not necessary. Many qualities that satellite radio has are a direct result of a response to a segment of the market that did not exist before. Those that seek a narrow market definition point to the national footprint of satellite radio. The CEI points out that along with satellite have come many other methods of getting content to consumers on a national scale. The list grows all of the time.
For sector watchers, understanding both sides of the coin is valuable. I would recommend reading both the AAI stance and the CEI stance. Look at what each is saying. Apply what is being said to the market place. Which institute delivers the more realistic argument? Which institute captures what is really happening in audio entertainment? Even upon getting these answers, it is no guarantee of the merger outcome, but knowing the various positions can at least make one more informed.
Position - Long Sirius, Long XM