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Consumers Will Lose -- Or Gain -- From Sirius-XM Merger

Monday, 2 Apr 2007 | 6:21 PM ET

Does the marriage of Howard Stern with his shock-jock archrivals Opie & Anthony constitute a "government bailout"? That's what the National Association of Broadcasters maintains, as it protests the planned merger of Sirius Satellite Radio with XM Satellite Radio. Two consumer advocates argued for and against the combination, on "Closing Bell."

XM/Sirius Opposition
The NAB is pulling out all the stops to prevent the XM/Sirius Merger, with Sherwin Siy, Electronic Privacy Information Center staff counsel; Mark Cooper, Consumer Federation of America director of research and CNBC's Melissa Francis

Sherwin Siy serves as staff counsel for the Electronic Privacy Information Center. He said asking whether the merger is a "bailout" or not is irrelevant -- he insists that "the only question is: 'is this good for consumers?'" Siy sees a "good possibility" that it would be: He points to the "efficiencies gained" by such a deal, and says the broader market's technology -- including "HD radio, iPods" -- would grow stronger from the competition.

But Mark Cooper, director of research for the Consumer Federation of America, thinks Siy is "absolutely wrong." Cooper declared that consumers can only benefit from "head-to-head competition," not across categories. And he said that orbital radio is a "unique product": it's "national, mobile, unregulated" and "advertiser-free." Cooper says that "each product Siy mentioned" lacks the satellite broadcasters' advantages.
[Editor's note: Both XM and Sirius run ad spots on their talk-radio channels.]

Cooper notes that, despite being in the red for years, Sirius and XM "grew 40% last year, to $2 billion in revenues -- and there's only two of them." Addressing talk of a subscriber price ceiling being imposed by the FCC on a merged company, Cooper scoffed that "a price cap would last about 20 seconds."

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  • With almost 30 years experience in business television, Bill Griffeth is co-anchor of the 3 p.m. ET hour of CNBC's "Closing Bell."

  • Kelly Evans

    Kelly Evans is an on-air correspondent, reporting across CNBC's business day programming. She is co-anchor of CNBC's "Squawk on the Street."