NAB Moves Against Sat Radio Merger

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Washington - Feb 28, 2007 - The National Association of Broadcasters (NAB) has already announced that it opposes the proposed merger of Sirius and XM, including a claim that the merger is a satcaster attempt to be bailed out by the government. The next step in its fight to oppose the merger is for NAB President David Rehr to testify before the House Antitrust Task Force.

According to Rep. Lamar Smith, the top-ranking Republican member of the committee, the hearing will help the task force decide if the merger will result in higher or lower prices and greater or fewer program offerings. The committee will also decide if satellite radio competes against terrestrial radio, the Internet or other emerging technologies.

It's abundantly clear that satellite radio competes with terrestrial radio, otherwise the NAB would not oppose the merger. In a press conference call held on Feb. 20, Mel Karmazin, currently CEO of Sirius, stated that satellite radio competes with terrestrial radio.

Rehr and Karmazin will both appear before the task force to share their views of the merger. The NAB is also taking a public stab against the merger by running an ad in the Feb. 28, 2007, issue of Communications Daily. The ad, which depicts a house of cards, includes quotes that appeared in the Washington Post and a statement that Congress should oppose a government-sanctioned monopoly. View the ad at this link.

Radio magazine observation: The NAB touts that terrestrial, free, over-the-air broadcasters are the leaders in electronic media and constantly downplays the significance of satellite radio. Now that satellite radio is making an effort to make its business profitable, the NAB takes notice.

Satellite radio is a different business model than terrestrial radio, although the two models are converging. More satellite radio channels now carry commercials, and terrestrial radio stations are looking at conditional access methods of content delivery.

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