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March 1, 2007 / Toby Dayton

Is James Sensenbrenner Jr. The Kind Of Person Who Should Decide If Sirius & XM Can Merge?

In a congressional hearing yesterday, Rep. James Sensenbrenner, a Wisconsin Republican who had previously chaired the Judiciary Committee when Republicans controlled the House, grilled Mel Karmazin, CEO of Sirius Satellite Radio about whether or not the merger would simply ‘transform a duopoly into a monopoly.’ Sensenbrenner is clearly opposed to the merger, to absolutely no one’s surprise. According to opensecrets.org, the top corporations supporting Sensenbrenner through political contributions are the broadcasters who fear that a combined XM/Sirius might actually create a viable, economically sustainable company that could provide a far better alternative to traditional radio. In the 2005-2006 cycle, Sensenbrenner took in more than $500,000 from PACs, over 95% coming from businesses. As a side note, Sensenbrenner donated very little of the total $774,141 he received for his re-election to his own campaign.

So a hack like Sensenbrenner, who between 2001-2005 reported more privately funded, lobbyist-paid travel costs than any other member of congress, gets to cast a vote in deciding whether or not Sirius and XM can merge? I am a firm believer of sensible, appropriate government oversight of corporations and commerce in general, and anti-trust issues should be treated seriously, but the system today is in no way sensible or legitimate. The National Association of Broadcasters, with powerful members in every congressional district in the country, are almost certainly going to be able to block the deal with the claim that the merger would create a monopoly.

But if a combined XM/Sirius truly had monopoly power, meaning that they were the only company that could deliver a product or service into the marketplace, in this case audio content delivered over the airwaves, then why are broadcasters so opposed? Either they compete against one another, in which case XM/Sirius is not a monopoly, or they do not compete, in which case there should be no standing for broadcasters to make a claim against the merger. The incongruity of the broadcasters’ claim is laughable, except for the fact that it is going to block a merger that would substantially benefit consumers. The hypocrisy becomes even worse when one considers that broadcasters, their lobbyists, and their allies in congress have also been pushing hard to relax rules that have prevented consolidation in the industry. Rather than attempting to make a rational, logical argument before the committee, Karmazin should have simply pulled out his checkbook. Apparently in Washington these days, that’s the most effective, and perhaps only way to get what you want.

[tags]Sirius Satellite Radio, XM Satellite Radio, Sirius XM Merger, FCC, Media Consolidation, Congressional Oversight of Media, James Sensenbrenner, Corrupt Politicians, Washington Cesspool[/tags]