Digital Insurrection Godfather(Webmaster)
Join Date: Jun 1999
Posts: 4,667
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DOJ gives Sirius/XM merger the green light
The XM Radio/Sirius Radio mega-merger, proposed more than a year ago as cleared a major hurdle as the U.S. Department of Justice announced Monday that they have given the proposed merger the nod of approval.
The DOJ had been carefully scrutinizing the proposed merger, to ensure that it would offer benefits to consumers, rather than creating an abusive monopoly. Opponents of the merger, including other broadcasting entities and politicians had weighed in, claiming the merger would ultimately be harmful to consumers. However, in its decision, the DOJ determined that the merger was not anti-competitive, citing a multitude of alternatives available to the consumer, including conventional radio, Apple iTunes and iPods as well as cellular phone music services. Other factors, including low attrition rates showed that the two companies were not overly competitive with one another, with both focusing on attracting customers from conventional radio mediums, rather that from one another. As it found no evidence of competition between one another, the DOJ did not place any restriction or condition on the merger.
The next hurdle and last major regulatory hurdle that XM and Sirius need to overcome is the FCC, which is also examining the proposal closely, and was waiting for the DOJ decision before it could complete its decision, which is expected later this year. The FCC decision is quite involved and complicated as the original license issued to XM Radio and Sirius Radio contained the restriction that the 2 companies would not merge. To overcome that, the FCC must re-examine the market as well as the original licensing decision and determine if the current conditions warrant removing that condition.
There still remain many grey areas as well as many un-answered questions as to exactly how this will affect the consumer. Since both XM Radio and Sirius Radio use distinctly different broadcasting technology, they are currently incompatible with one another. All current satellite radio receivers, both mobile and portable are “married” to a particular service and cannot be interchanged. Additionally, the two companies also have exclusive agreements with most of the major OEM automobile manufacturers, including Audi, Bentley, BMW, Chrysler, Dodge, Ford, Jaguar, Jeep, Kia, Land Rover, Lincoln, Mazda, Mercury, MINI, Maybach, Mitsubishi, Mercedes-Benz, Rolls-Royce, Subaru, Volkswagen and Volvo for Sirius Radio and General Motors, Honda, Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota for XM Radio. These OEM systems are also “married” to a particular service.
Initial details of the merger included a proposal for a new generation of “hybrid” receivers and antennas, with dual tuners which would be capable of receiving bother services. This however, would require consumers to purchase new equipment in order to receive bother services, which is a significant obstacle, as is the existing mobile after-market and OEM satellite receivers, which if even possible, would require a special adapter and new antenna in order to receive both services.
Another possible option for existing customers of course, would be to offer select "a la carte" channels on each others service, for example XM Radio programming could include a “mirror broadcast” of certain Sirius Radio programming channels such as Howard Stern or Martha Stewart which could be added to their subscription. This would allow a limited amount of added choice, without the added cost of an equipment upgrade, however both satellite services are currently low on satellite bandwidth as it is, meaning in order for this to even be a possibility, they would need to trim down a little on their existing offerings such as their less popular channels, in order to clear the way for many more.
Both XM and Sirius have indicated that if approved, they expect to be able to offer reduced cost packages, which will package up certain channels for a lower cost, rather than the existing full cost, all channels option currently in use. Even if approved by the FCC, it will take some time before you will be able to receive the 2 services on a single device.
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