No End to the Sat Radio Merger Comments

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No End to the Sat Radio Merger Comments

Jul 3, 2007 12:00 PM

Washington - Jul 3, 2007 - The ongoing battle rages between the supporters and opponents of the satellite radio merger. Both sides continue to gather supporters for their arguments as well.

Recent financial analyst reports from Merrill Lynch, Morgan Joseph and Bear Stearns all show satellite radio as a good investment right now. These firms also have mixed opinions on the successful outcome of the merger proposal. Bear Stearns maintains that satellite radio sees continued competition from Internet and HD Radio.

The merger supporters gained another prominent name in their camp when Harold Furchtgott-Roth, the former FCC commissioner, released an economic review of the proposed merger. The satellite radio providers retained his services to prepare the report. His review includes the arguments that have already been presented, namely that satellite radio competes with all other forms of audio media.

The review goes on to explain that mobile and fixed communications markets continue to change, and viewing satellite radio as a static market is unreasonable. It also states that if the combined operator were to raise its subscription fee, subscribers would likely drop the service.

The NAB also issued its rebuttal to the Furchtgott-Roth report. The NAB report was written by Philip Napoli of Fordham University. This report maintains that satellite radio is its own distinct market for antitrust issues.