I think Russ Roberts is generally spot-on with his thoughts about the satellite radio merger. If I get the XM stations I love and to hear Bob Lamey’s hometown Colts broadcasts, I don’t see how I as a consumer get “hurt.”

One thing Roberts didn’t mention, though, is that if the FCC does indeed determine that one satellite radio company is overly monopolistic, the FCC only has itself to blame. The regulatory agency only let two satellite companies into the market in the first place, in part thanks to heavy-handed lobbying by the National Association of Broadcasters, one of the more evil, luddite-like dinosaurs in Washington.

That means there were only two competing business models in a completely new industry. And essentially, they both failed (both companies have been losing money hand over fist). Had there been a truly free market at work, there would have been a dozen or more companies, and a few or more would have figured out how to make it all work more efficiently.

Of course, another big problem is the fact that both companies have spent an inordinate amount of time and money fighting off attempts by the NAB and the recording industry to manipulate federal regulations to their advantage — to the detriment of the satellite radio start-ups.

This of course is how many regulatory agencies work. Big, established interests use regulations to smack around competitors, and keep upstarts and challengers at bay. Which is why people who attack libertarians who attack the regulatory state as being corporate whores are silly. Big, giant corporations love regulation. Because they, unlike their challengers, have the money they need and the legal infrastructure in place to comply with them. A cash-strapped start-up doesn’t.

This entry was posted on Wednesday, March 7th, 2007 at 8:25 pm by Radley Balko and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.