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No merger needed

The editorial endorsing the proposed XM-Sirius merger (“A good merger,” Friday) mischaracterizes the market for satellite radio and is inconsistent with what both firms have been telling the public and federal officials.

The fact that many more people listen to terrestrial radio, Internet radio and MP3 players than subscribe to XM or Sirius does not mean these modes would prevent the merged company from raising prices (or reducing service) a significant amount for a significant period of time (the conventional test used by antitrust authorities). The mere fact that people pay for XM and Sirius despite the availability of free alternatives demonstrates that satellite services are different.

The suggestion that if the merger is not approved, today’s duopoly in satellite radio could disappear altogether directly contradicts what both firms have told the public, Congress and the Federal Communications Commission. If XM or Sirius presented evidence the merger is needed for either or both of them to survive, a different antitrust standard (the failing firm defense) would apply. But both companies say they will do just fine if the merger is not approved, and markets seem to agree.


Sperryville, Va.