After 18 months, the FCC has finally approved the XM/Sirius merger:
The government has approved the long-delayed merger of the nation’s only satellite radio companies, combining Sirius and XM into a single entity with 18 million subscribers.
The decision last night came almost a year and a half after the companies first proposed joining. Based on yesterday’s closing share prices, the deal is valued at $3.3 billion, not including debt.
Dozens of lawmakers, consumer groups and broadcasters had long opposed the merger, saying that the union would create a satellite radio monopoly. But three of the five members of the Federal Communications Commission agreed that the marketplace has changed since the two companies formed, with Internet radio, iPods and other technological advances competing for consumers.
Of course, it’s not all good because the FCC has imposed several conditions on the merger:
The companies must cap prices for three years after joining and allow consumers to choose the channels they want and pay less for packages of channels. Radios that allow a la carte channel selections will eventually be available for car dashboards — the largest area of growth. The companies said they would introduce radios that receive both XM and Sirius channels.
And….
The combined company has agreed to offer more educational and minority programming. It will allow any radio-device manufacturer to build and sell transmitters, giving consumers more choice.
It’s unfortunate that XM and Sirius were forced to succumb to government blackmail to get approval for a deal that should have gone forward a long time ago, but it’s better than allowing both companies to die.
July 26th, 2008 at 1:18 pm
The best interests of the citizens are not served by promoting the formation of a monopoly, or the nurturing of multinational or domestic oligopolies.
If anything, the FCC should have used its authority to break-up the two companies even further into hundreds of competing interests.
The same is true of the broadcast licenses. The law should permit only local, independent ownership of any media entity; no multiple station owners at all and no ownership of radio, TV and newspapers by a single corporation.
The citizens own the airwaves and the FCC must be reformed so that their policies promote jobs, provide independent entrepreneurship opportunities and prevent monopolies or oligopolies from controlling content and access.