XM-Sirius Merger Anti-Trust Implications
Richard Siklos and Andrew Ross Sorkin provide a solid analysis of the XM-Sirius merger and its chances of surviving regulatory scrutiny. They’re right, I think, that the issue is “whether regulators will see a combination of XM and Sirius as a monopoly of satellite radio communications or whether they will consider other audio entertainment, like iPods, Internet radio and HD radio, to be competitors.”
Considering that the FCC denied DirecTV and Dish Network’s merger request four years ago, and they face stiff competition from cable in most markets, I don’t see how they this one can be approved. As I noted last month when negotiations heated up,
If XM and Sirius merged, they would have a monopoly on providing commercial free coast-to-coast radio stations, feeds of popular networks that would stay true throughout a cross country drive, and so forth. While people could obviously refuse to subscribe to their service, the merged companies would have much less incentive to keep prices down and innovate their programming than exists with two major competitors.
Steven Taylor doesn’t much care, so long as he can still get NFL programming. Of course, that programming might be much more expensive in a non-competitive market.
Dale Franks thinks the question isn’t whether we’re better off with competition in satellite radio but “whether one big satellite company is better than no satellite radio at all.” Then again, one company might be the natural result of competition, anyway.