RSSJustice Dept. approves XM + Sirius merger
By Ed Oswald | Published March 24, 2008, 3:19 PM
The US Justice Department has approved the merger between XM and Sirius satellite radio services, stating that it could not find any evidence that the combination would substantially reduce competition.
In what has seemed like an eternity, the first steps towards a single satellite radio entity began Monday as the DOJ approved the $13 billion deal.
XM and Sirius first announced their "merger of equals" last February, with Sirius' Mel Karmazin assuming the role of CEO, and XM's chairman Gary Parsons taking the chairman's position.
The two companies had hoped at the time to finish the merger by the end of 2007. However, both the Justice Department and the FCC took their time in studying the merger -- even causing the two sides to extend the agreement through May 1 (it was set to expire in February).
Broadcast industry groups such as the National Association of Broadcasters had voiced their opposition to the deal, saying it was anti-competitive. In its defense the two companies argued that since satellite radio's creation, the entertainment industry had changed.
Satellite radio was now competing with devices such as music players and other entertainment devices, they claimed. From the DOJ Antitrust Division's statement, it appears as if regulators agreed, adding other factors played into their decision.
The reasons for the approval included "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," according to the statement.
With the DOJ's approval, the two companies now wait on the FCC, which must also approve the deal in order for the two companies to merge. That approval is a bit more difficult since it requires an actual rule change.
In the original agreement that created the two licenses, a provision was placed that forbid one company from owning all licenses. In order for this to be approved, that would have to be changed.
However, it is likely that the FCC will consider the DOJ's antitrust concerns -- which apparently do not exist -- and would approve the deal as well. It is not immediately clear how soon after approval from both sides would customers see any benefit.
5:25 pm EDT March 24, 2008 - In a joint statement this afternoon, XM and Sirius said they'd celebrate the merger's DoJ approval by offering a la carte programming options for subscribers, presumably upon the merger's completion.
"In a strong indication of the consumer benefits inherent in this transaction, the companies unveiled an array of new programming options, including two first-of-their-kind à la carte options where consumers can individually select the channels they wish to receive," reads this afternoon's statement. "A public opinion survey found that over 70% of voters thought the two new a la carte packages would be a good deal for consumers."
soon as the merger was finalized by the doj, i put in an order for an sl100 and i'm going the sirius route. it should be here tomorrow and i will be up and running by tomorrow afternoon.
the way i see the process is that, because it is technically sirius taking over xm, all of xm's music and traffic and weather stations will be dropped. those xm exclusive properties then join the sirius lineup and the joint company then sends one stream to the two satelites because as i understand it, the hardware is not compatible.
it didn't really matter which service i got at first because they both look the same to me and what i want is evenly split between both services, but the university of louisville airs its football and men's basketball games on sirius, and uofl sports trumps all possible programming decisions, although i expect to also be listening to cubs games and colorado avs games by the end of this year.
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|Well it is about time the DOJ finally got it right now let see how the FCC will mess this up.
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|I guess Jim Cramer finally got his wish.
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|...and don't forget that there's HD radio out there too. HD radio receivers may not be widespread right now, but given the larger selection of radio stations available with HD radio, not to mention the superior quality to current terrestrial broadcast, satellite radio definitely has some competition.
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|I believe that what they are saying is the the 2 companies are equals, there is nothing to stop me for example from Launching a satelite into orbit and start broadcasting digital content. I am an avid Sirius Subscriber and the benefits clearly outweigh anything else, Its funny though, after reading all of the information available, I find it odd that no one has made mention that the creater of Satelite Radio was interviewd and clearly stated that the FCC mandated that he split the bandwidth in half and 2 companies enter the market. The Full bandwidth will could allow, Images, video, and additional content to be streamed directly into your players. That what it was designed for. This means that you will get CD Quality on every single channel, not just the popular ones and scale down the less popular channels, and still have enough Bandwidth to add additional content to existing content. Thats right bible thumpers, Imagine Howard Stern Beaming Live Pics right to the Handset!!!!! OH THE HUMANITY!!!
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|I agree that the company has competitors, local radio, mp3 players and online music stores, streaming media etc. But in this one particular field of their business, "Satalite Radio", there will be no other competitors. Maybe Ford, GM, Chrysler, BMW, Mercedes, VW, and all the other car manufactures should merge, I mean they'll still have competition from people who walk and Huffey (plus all the other pedel-bikes). I mean cars and bicycles, legs basically just get you places, right?
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|"Maybe Ford, GM, Chrysler, BMW, Mercedes, VW, and all the other car manufactures should merge, I mean they'll still have competition from people who walk and Huffey (plus all the other pedel-bikes). I mean cars and bicycles, legs basically just get you places, right?"
You know what I hate...people that try to use car analogies for EVERYTHING...no matter how little sense it makes.
"uh..it's like, uh, when cars, stop competeting with cars, because uh, there's bikes, and uh...cars compete with bikes, and, uh, bikes are cheaper so uh, cars don't need to compete with cars because, uh, yea, bikes are cheaper and legs are free, so like, we don't need cars, yea...and like, satellites are like cars, and radios are like bikes, so like, yea, satellites need to like, compete with bikes, because they're radios...and like, you know, yea..."
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|are they serious?
Who are the other satellite radio competitors? Radio doent count as its free morons.
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|How many times do people have to tell you there is nothing in life that is free. By listening to ads you are paying the radio station. Think before you talk next time.
www.talkprice.net
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|Are YOU serious ?
Because it's free it doesn't count ? Why ? It's still radio, moron.
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|Just because radio may be viewed as an inferior product to satellite by some, it does not mean that it isn't a competitor
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|this means pricing will go up
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|From what i've read, pricing WILL go up for the "whole package"....but you will be able to get partial packages for cheaper than you could get anything previously.
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|I don't disapprove of the merger, but if the two only Satellite Radios companies merge, wouldn't that mean no competition. Unless they consider Sat Radio is competing with terrestrial Radio, then that makes sense.
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|Satellite Radio competes with 2 majors players:
1. Local Radio
2. iPod / PodCast
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|Do you have internet in your car? Then how does it compete with iPod/PodCast? I guess you can record them, but then it competes about equally with tapes...
Local radio is NOT competition to Sat. Whooping 4 songs they repeat throughout the day is hardly a match for the amount of music you get from Sat.
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|The thing to say is "What can people listen to in their car?"
Those are the 3 options they have for their car. The thing that makes the iPod a serious competitor is that it provides the option for commercial-free music AND "talk programs"....just like satellite. I do agree that normal radio isnt much of a competitor, it's very limited in content. But it's also free....and "free" will always hold a large market share.
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|I actually listen to Pandora (yes, I do have internet in my car :-) but I just don't see it as a competitor for Sat.
Most people I know listen to CDs -- but I again fail to see how that's competition to Sat. Have you ever heard anyone say: "I don't need XM, I've got an MP3 player."?
As far as free radio, after about a day of constant repetitions - my favorite radio is station is silence fm.
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|"I don't need XM, I've got an MP3 player."
What I have...and what I say.
Who needs radio? Between Jango @ home or work and my MP3 collection in my car...
*shrug*
Radio sucks. No user control. I can control what plays everywhere else I listen to music, why would I give that up in the car?
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|It just depends on how much control you need. For me, being able to switch stations and turn it on/off is enough.
Pandora also lets you skip songs.
Also, if you have a 3G phone, there's Orb, which gives you ultimate control. Although security issues made me wake up at night a few times while it was running on my pc.
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|How is Orb any more "ultimate control" than an In-Dash MP3 player??
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|Having both Sirius and XM channels on a single satellite receiver is no more ridiculous than a combination AM/FM radio or a TV set with both VHF and UHF channels on them. I don't like enough of either one to pay money for them as seperate services...
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|One wonders how that qualified as a reply to my post....
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|Orb gives you access to your ENTIRE collection you store on your PC. In my case, gigabytes of music. Can your in-dash mp3 player do the same? Amount of choice makes it ultimate.
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|My in-dash gives me access to *all* of the music on the unit installed in my trunk, which can support gigabytes of music. :)
So yes, it can.
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