DoJ Okays Sirius-XM Merger

A merger between the two players in the US satellite radio market, Sirius and XM Radio, came a step closer to reality today when the U.S. Department of Justice (DoJ) informed the companies that it had ended its investigation into the pending deal without taking action to block the transaction. "Competition in the marketplace generally protects consumers and I have no reason to believe that this won't happen here," Justice Department antitrust chief, Thomas Barnett, told a conference call with reporters.

This decision means the DoJ has concluded that the merger is not anti-competitive and will allow the transaction to proceed. However, one more obstacle remains: the merger is still subject to approval of the Federal Communications Commission, which in 1997, issued an order forbidding either company from acquiring the other. A source at the FCC, however, said the organization could be strongly influenced by the Justice Department's decision, stating: "I think it would be hard to go in the complete opposite direction (from the Justice Department)."

View: Further Reading at Reuters

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so would their be any competition?
I mean if there is none, and they raised there rates to "cover the merger costs" what stop them from keeping the price up there?

Depends on how you define competition. The SatRad companies claim they compete with terrestrial radio, personal music devices, and the internet. The NAB claims that SatRad competes with each other and one SatRad company will be a monopoly. There still has to be FCC approval for this merger before its final.

I am an XM subscriber and I was not for this merger. I don't see anything that will keep prices in check for the future.

My whole issue with the argument that they compete with free radio is that DirecTV and Dish Network were not allowed to merge stating that there merger would create a monopoly. Do they not compete with OTA TV and cable and even the internet now? I do not see a difference except that SatTV groups were not losing money like SatRad.

if they raise the rates they will lose subscribers

they had to include a-la-carte plans, etc, in the merger proposal. if you only want the radio for specific content (ie. Howard Stern on Sirius or something on XM) you can exclude content and it may actually lower the price for you somewhat.

I've seen the a la carte plans. Pick roughly 50 channels from each service for a set price (I think around $7), unless you want the premium channels, which can cost anywhere from $3 to $6 depending on the channel. I prefer my XM the way it is as I like to listen to a larger variety of channels for ~$13 a month, well over the 50. Plus I will not need a new receiver which you will need for the A La Carte Packages. Here is the proposed pricing structure from both providers post merger. Granted this was released last year, but it is the most current:

XM: http://www.orbitcast.com/archives/xms-postmerger.html
Sirius: http://www.orbitcast.com/archives/sirius-postmerg.html

Notice the * next to the two A La Carte Packages. That means a dual sub receiver is required to get these packages. The sports have not been ironed out yet due to the contracts involved with each sport, but from what I read, you will need to get both "Everything" packages to get all the sports.

Well I sub to XM for the car, I also listen to Sirius at home with Dish Network, I prefer XM.

At first I was opposed to this "merger" but now I think it will be better with the two combined if they combined some music channels.

Both companies are bleeding financially atm, **** loads of money going down the drain, only one will be able to survive if this merger does not get approval, both companies admitted this. The company surviving would in all probability be Sirius Satellite Radio, because if has stronger financial support, and would be able to outlast XM in this "loosing money" war.

Approving or not approving will have the same result, one company survives! The difference being that when/if one of company goes down, lots of people will lose money in the process, all those shareholders will be left with shares that are worth nothing.

The merger will benefit consumers, just to name a few:

Both companies proved that by merging they will be able to cut billions of dollars in operation costs, and have agreed to lower prices if the merger goes through.

By not having to share the spectrum, they will be able to offer greater quality and other products (like video).

Radio satellite owners will be able to finally get baseball and football on the same service ( XM has the Baseball deal, and Sirus the Football deal).

This has taken way to long, politicians are caching-in in all directions, no-one cares about due diligence anymore, sad.

My understanding is that both sports will not be offered unless you sign up for the "Everything" plans. For that, you will need a dual sub receiver.

Let's see, hmmmm....now, there are only two satellite radio companies; so if one acquires the other, there will only be one company.

How could anyone possibly think that this might result a loss of competition? :confused:

As I see it, its a limited field in that there can only be a fixed amount of satellites in space.So there won't be 4 or 5 XM competitors in North America. Radio generally is expensive to run, one reason there's ads on XM now. Given the huge expense, I think this is logical. Competition? There's already the free public airways. Its up to us to pay for XM or listen to free radio.

1. The competition is still there because satellite is just one form of radio. It competes with FM and the Internet radio. I heard it represents a really small share too; like 2% of all radio listeneres turn to satellite.
2. Sometimes, it doesn�t make sence to compete. Example: two subway lines running between same two stations.

hopefully they will be able to combine their bandwith to deliver cd quality music...it really kills me when you listen to XM or Sirius and its not even the same quality as terristrial radio

The funny thing is that XM through DirecTV is beautiful, easily CD quality. And the Neural surround encoding is amazing if you have a receiver that can decode it (it decodes to discrete 5.1 from stereo).

Agreed. I have XM (I liked the channels more). I don't know if there's a huge quality difference. There's only so much time to listen to music anyways. I wouldn't mind seeing bandwidth increase if it means less stations. I've noticed a bit of a drop of quality, at the least its not CD quality. I wonder what will happen to the receivers?

(QuarterSwede said @ #2.1)
The funny thing is that XM through DirecTV is beautiful, easily CD quality. And the Neural surround encoding is amazing if you have a receiver that can decode it (it decodes to discrete 5.1 from stereo).

Interesting, because I have XM in the car and the quality difference between XM and even 192MP3 is easily noticeable; this really is starting to disappoint me. Is this just because my decoder is a little old (2004)?

(tntomek said @ #2.3)

Interesting, because I have XM in the car and the quality difference between XM and even 192MP3 is easily noticeable; this really is starting to disappoint me. Is this just because my decoder is a little old (2004)?


No, the quality through DirecTV is just better. I've heard it in the car and I wouldn't pay for it, it's so bad in my opinion.

(QuarterSwede said @ #1.1)
From what I understand it's more like XM acquiring with Sirius.

Does it really matter? There is a rumor going around the new company will be called SiriusXM (As in serious music) duno who came up with that...

(QuarterSwede said @ #1.1)
From what I understand it's more like XM acquiring with Sirius.

wrong

http://www.msnbc.msn.com/id/23781933/

WASHINGTON - The Justice Department on Monday approved Sirius Satellite Radio Inc.’s proposed $5 billion buyout of rival XM Satellite Radio Holdings Inc., saying the deal was unlikely to lessen competition or harm consumers.

(k22 said @ #1.3)

wrong

http://www.msnbc.msn.com/id/23781933/

WASHINGTON - The Justice Department on Monday approved Sirius Satellite Radio Inc.’s proposed $5 billion buyout of rival XM Satellite Radio Holdings Inc., saying the deal was unlikely to lessen competition or harm consumers.


Well look there, I CAN be wrong! Who knew?