In a 90 page filing with the FCC, C3SR's consultant Gregory Sidak places forth his argument that Sirius and XM satellite radio have not provided any real evidence of Buy Side (consumer) protections if the companies were to merger. Sidak trys to point out that there are no restraints on the merged company to keep prices from artificial inflation. Readers can get the gist of Sidak's stance by clicking the link above, and then can see six points that counter that stance below.
Well, this wont take 90 pages, but perhaps Sidak should have considered the following:
1. Sirius and XM have already guaranteed that consumers will not have to pay more than they currently do for the level of service that they currently have.
2. Whether Sidak wants to admit it or not, terrestrial radio is indeed competition, and the price for terrestrial radio is FREE.
3. Whether Sidak wants to admit it or not, consumers DO find that terrestrial radio is a substitute for satellite radio. Half of those that receive satellite radio as a trial when they buy an equipped car choose not to keep the service. Does sidak believe that these people opt to listen to nothing?
4. There is strong evidence that consumers DO NOT switch between the two existing satellite carriers. If a consumer leaves one of these services, they tend to find other means of audio entertainment outside of satellite radio. Again, does Sidak feel that these people drive around in silence?
5. Sidak argues that evidence of substitutionalty does not exist when a consumers AM and FM listening decrease with the decision to become a satellite radio subscriber. He states that this is the case, because price increases have not happened that would demonstrate a consumer going back to terrestrial. I argue that there already was a price increase....FROM FREE to a pay service. For those consumers that have become subscribers, they see value in what satellite delivers. However, that value is not seen by the millions upon million who have not chosen to subscribe. In fact, with retail sales slowing, it could be argued that satellite radio may need to trim subscription prices to attract a wider audience.
6. Aside from terrestrial radio, satellite radio also competes with Internet radio, cell phones with streaming content, MP3 players, and even CD players. It is common sense that a consumer will only be listening to one of these formats at any given time. They all compete for consumer attention.
The irony in this is that common sense on 6 points that took about ten minutes to compile can shoot down virtually everything in a 90 page report that took countless hours and many dollars to develop.
Position - Long Sirius, Long XM