U.S. Justice Department Approves XM - Sirius Merger

[BottleofRum]

Great News!


Now it is up to the FCC to make a ruling.


http://money.cnn.com/2008/03/24/news/co ... 2008032415

[~ Parrot Bay ~]

About time, it's been over a year.

[SchoolGirlHeart]

Great News!

Why great news? Not being facetious or argumentative, just curious as why this is good. Guess I'm thinking some competition would be better?

[aeroparrot]

I seriously think that the FCC may ask Sirius-XM to shed some stations to create another satellite radio company, however, that being said, I can understand the ruling of the Justice Department. You don't really need to pay for radio if you don't want. If you don't want the service, don't subscribe. You can listen to "free" radio.

[Lightning Bolt]

mixed feelings here.

I really like channels that you find only find on Sirius
AND I really like channels that you find only find on XM

I'll bet something's gotta give

[Skibo]

I seriously think that the FCC may ask Sirius-XM to shed some stations to create another satellite radio company, however, that being said, I can understand the ruling of the Justice Department. You don't really need to pay for radio if you don't want. If you don't want the service, don't subscribe. You can listen to "free" radio.

I agree that some selling will go on here, but I believe the XM frequencies will either be returned to the FCC and auctioned off again. Sirius/XM will eliminate redundant stations.

[Glorfindel7]

I have a feeling this is the end of Radio Margaritaville on Sirius

[a1aara]

The Department of Justice's Antitrust Division on Monday (March 24) approved the $5.7 billion, all-stock merger between satellite radio companies Sirius and XM, determining that the proposal was not anticompetitive. The FCC must also rule on the matter and is unlikely to go against the DOJ’s finding. However, the FCC could impose conditions on the multi-million dollar, all-stock transactions that could limit the benefits to the merger or quash it altogether.


In a 2,053-word release issued Monday afternoon, the DOJ said, "After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers."

The DOJ decision was announced during the last hour of trading on Wall Street and shares of Sirius shot up nearly 10% or 27 cents a share to $3.17 just before the close as more than 149 million shares to SIRI traded hands. More than 36 million shares of XMSR traded up more than 15% or $1.85 at $13.79.

"We are astonished that the Justice Department would propose granting a monopoly to two companies that systematically broke FCC rules for more than a decade,” responded NAB executive vice president Dennis Wharton to the DOJ’s ruling. "To hinge approval of this monopoly on XM and Sirius's refusal to deliver on a promise of interoperable radios is nothing short of breathtaking."

The government continued, "The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers.”


After reviewing the proposal for more than a year, the Antitrust Division determined that the satcasters had reached the highest level of possible competition already and it just wasn’t that intense because of the difference in required equipment. “The Division’s investigation indicated that the parties are not likely to compete with respect to many segments of the satellite radio business even in the absence of the merger. Because customers must acquire equipment that is specialized to the satellite radio service to which they subscribe, and which cannot receive the other provider’s signal, there has never been significant competition for customers who have already subscribed to one or the other service. For potential new subscribers, past competition has resulted in XM and Sirius entering long-term, sole-source contracts that provide incentives to all of the major auto manufacturers to install their radios in new vehicles. The car manufacturers channel accounts for a large and growing share of all satellite radio sales; yet, as a result of these contracts, there is not likely to be significant further competition between the parties for satellite radio equipment and service sold through this channel for many years.”


The decision comes despite resistance from the NAB, which has beat the bushes wildly since President’s Day weekend on Feb. 19, 2007, when the proposal was announced with a series of protests. The NAB has also secured the backing of several consumer groups -- some known and some quite mysterious -- who said they and their members could somehow be harmed by the merger. Reaction to the proposal was mixed on Capitol Hill and the NAB was effective in generating a significant outcry from its usual political backers. How much input they have on the final outcome remains to be seen in the FCC’s determination. A decision from that agency could arrive some time this week.


On March 20, 2008, FCC chairman Kevin Martin told reporters that he had instructed his staff to draft documents on the deal, all with the aim of offering a variety of outcomes.


Immediately after the DOJ’s announcement that it was approving the deal, Public Knowledge asked the FCC to put conditions on satcasters if it approved the merger. Gigi B. Sohn, president and co-founder of the consumer activist group said, “Public Knowledge has maintained that the merger, if it passed antitrust scrutiny, should be approved with a number of conditions. With the Justice Department decision sanctioning them merger, the next move is up to the FCC. We hope the Commission will act accordingly to impose conditions that serve the interests of consumers.”




Sohn, who testified before Congress early last year and offered a handful of suggested conditions on the merger, has again asked that an a la carte pricing plan be required; that 5% of the new entity’s channel capacity be made available to noncommercial educational and informational programming over which it has no editorial control; a three-year price freeze be instituted; and that the new company should make the technical specifications of its devices and network open and available to allow device manufacturers to develop, and consumers to use, any device they choose without interference. Pursuant to Commission rules, these devices must be certified by the FCC for receiving signals on the frequencies licensed to the merged entity and be subject to a minimum “do-no-harm” requirement.

Sohn added: "We have also asked the Commission to refrain from conditioning the merger on: 1) a prohibition on satellite radio providers providing local programming and 2) any content protection mandate such as the audio broadcast flag. We hope the Commission will act on these requests also."

To read the DOJ's decision in its entirety, please click here.

[ragtopW]

mixed feelings here.

I really like channels that you find only find on Sirius
AND I really like channels that you find only find on XM

I'll bet something's gotta give

I wonder Does Sirius have an Xcountry?

[BottleofRum]

Great News!

Why great news? Not being facetious or argumentative, just curious as why this is good. Guess I'm thinking some competition would be better?

The competition is FM, AM radio, iPods, MP3 players..... plus the merged company has already set prices which will result in many customers paying less per month with the ala carte service. Without the merger one of the companies would be bankrupt in the near future, their stocks were tanking.

Great news for me because I have Sirius and XM has baseball, it was the only thing XM had that I wanted - now if this goes through I can get baseball. MLB, NFL, NASCAR, NHL, NBA, NCAA and others will all be on one provider rather than split between two, for the consumer this is good news.

[BottleofRum]

mixed feelings here.

I really like channels that you find only find on Sirius
AND I really like channels that you find only find on XM

I'll bet something's gotta give

I wonder Does Sirius have an Xcountry?

They have several country stations.

[ragtopW]

mixed feelings here.

I really like channels that you find only find on Sirius
AND I really like channels that you find only find on XM

I'll bet something's gotta give

I wonder Does Sirius have an Xcountry?

They have several country stations.

Well X is .. not really country.. more. Outlaw..
and.. not edited..

[ragtopW]

I would be interested to see how this is gonna shake out for Dish and Directv..

[moog]

Hee hee The NAB is upset. Commercial radio is nothing but a land of crap which does not serve the public.

"We are astonished that the Justice Department would propose granting a monopoly to two companies that systematically broke FCC rules for more than a decade. To hinge approval of this monopoly on XM and Sirius's refusal to deliver on a promise of interoperable radios is nothing short of breathtaking"


THE FCC SHOULD HAVE NO BUSINESS WITH SUBSCRIPTION RADIO'S CONTENT These government appointed nitwits should stay out of our lives. Plus the NAB should clean their own house first. Idiots.

Commercial radio does not have Big Band, tropical, standards, jazz fusion, country,reggae, free form, soundtracks, showtunes, Sid Mark and the Sound Of Sinatra, Cousin Brucie and so on. F Clear Channel , Infinity and the outdated NAB.

[PHnSC]

mixed feelings here.

I really like channels that you find only find on Sirius
AND I really like channels that you find only find on XM

I'll bet something's gotta give

Both companies have said that if the merger goes through, than new price plans will come out to where customers can pick only the stations they want, in a al cart style.

[PHnSC]

I have a feeling this is the end of Radio Margaritaville on Sirius

I dont think it will be the end. Sirius is kind of the leader of the merger idea.

[PHnSC]

I would be interested to see how this is gonna shake out for Dish and Directv..

Me to, I have Directv now and only have XM on it. hopefully now I will be able to get RM on my Directv

[blackjack]

mixed feelings here.

I really like channels that you find only find on Sirius
AND I really like channels that you find only find on XM

I'll bet something's gotta give

I wonder Does Sirius have an Xcountry?

They have several country stations.

Well X is .. not really country.. more. Outlaw..
and.. not edited..

Sirius has:
New Country
Prime Country (lots of 80s and 90s hits)
OUTLAW Country (Jr., Willie, Waylon, etc.)
Bluegrass

Definitely something for everyone.

[chippewa]

I was under the impression that even if they merge, there will still be two providers? I think they're also working on making current equipment backward-compatible, so they can pick up either signal. FCC still has to approve, but I can't imagine them blocking it.

Would ala-carte be station-by-station, or you'd have to get a package of several stations to get the one you want, much like cable or satellite TV.

[aeroparrot]

I was under the impression that even if they merge, there will still be two providers? I think they're also working on making current equipment backward-compatible, so they can pick up either signal. FCC still has to approve, but I can't imagine them blocking it.

Would ala-carte be station-by-station, or you'd have to get a package of several stations to get the one you want, much like cable or satellite TV.

They may give a cheaper price to the latter but I could see them giving both options.