Motivated by rumors of a possible merger between digital satellite radio companies Sirius Satellite Radio and XM Satellite Radio, a new consumer-advocacy group seeking to maintain competition in the industry has been established at George Washington University (GWU) in Washington, D.C.

The Consumer Coalition for Competition in Satellite Radio (C3SR) is a student-run organization created on behalf of 13 million digital satellite radio subscribers.
Analysts are predicting that XM and Sirius will collectively reach nearly 19 million subscribers by the end of this year. Reports of merger talks between XM and Sirius began to surface in 2006, and have recently intensified as executives from both companies have been quoted in media reports discussing the possibility and potential benefits of a merger.

XM, the larger of the pair, and Sirius have each spent billions of dollars competing with the other, and subscriber growth slowed beneath expectations last year.
Sirius CEO Mel Karmazin and XM’s chairman, Gary Parsons, have garnered attention and speculation about the two’s joining, yet Federal Communications Commission (FCC) chairman Kevin Martin was widely quoted on Jan. 17 for noting that a ban on a single owner for both satellite services was written into the regulations that originally authorized the two companies’ nationwide licenses.
Martin, however, stopped short of speculating whether the regulatory rules might be amended, or that the two satellite radio companies would not win approval of a merger were they to pursue it by, for example, arguing that the companies’  competition is outweighed by competing technologies such as Internet radio, podcasts or iPods.

"The competitive duopoly in satellite digital radio created by the FCC in 1997 is clearly at risk," said Chris Reale, a founding member of C3SR. "If the only two companies operating in the satellite radio industry are permitted to combine, consumers not only will lose their choice, but they will be totally at the mercy of a monopoly provider."
Reale, a Washington, D.C.-based lobbyist and second-year GWU law student, said C3SR’s goal “is to stop the merger.”
He said “analysts are still pumping it up even after [Martin’s] comments, and even if it proceeds, we’ll aim to get some guarantees and price protection on fees and service.”

Noting that XM recently demonstrated new technology that will allow their satellites to beam video content to automobiles, Reale wondered “how does that affect the price even if I don’t want it?
“When I subscribed to XM back in 2005, I had a choice,” he continued. “Now it looks like some of my favorite channels may disappear and/or the subscriptions fees will go up if this merger happens."
Reale added “chances of merger have been estimated kind of high at [the Department of Justice (DOJ)], and they haven’t stopped a merger in years. [Mergers] basically have just been given a rubber stamp.”
C3SR attended this month’s National Conference on Media Reform in Memphis, Tenn., and is otherwise trying to establish grassroots support.
 
"Our Web site, www.c3sr.org, ought to be up and running fairly soon,” said Reale. "There will be a number there where subscribers can reach us, sign up, blog and show support.”
The group’s initial goal is to raise consumer awareness about the potential negative impacts of a merger. "Hopefully, when, and if, Sirius and XM announce a merger agreement and pursue regulatory approvals, we will have enough support and momentum to ensure that existing subscribers don’t get the shaft," said Reale.
“The consumer argument is there, and presumably the FCC and DOJ are there. If we’re heard, I like our chances for success. Ideally, I’d like to see no merger [and] two providers, with subscribers who want to listen to their choice. If one raises rates, they can always go to the other.”