Yesterday FCC Chairman Kevin Martin was at CES 2008 for an "Industry Insider" session with CEA president Mark Shapiro.
While Martin's focus was primarily on open access, the DTV transition, 700mhz auction, whitespaces and other issues the FCC is considering, he did touch upon the XM-Sirius merger very briefly. He wouldn't speak about the current status, but did say it was under consideration right now and that the DOJ needs to rule as well.
The FCC Chairman did seem impressed with the A La Carte pricing model proposed by Sirius-XM and commended them for it. But the discussion was really in whether the model would be applied to Satellite TV.
So overall takeaway:
While Martin wouldn't address it directly. the olive branch presented in the form of a la carte pricing seemed to made a positive impression with the Chairman.
your take away is an olive branch, While I see the stock tumble 15% today. Someone knows something. I sure hope the merger is denied and thats what they have an inside track on.
If it is denied and you are holding XM stock you are in trouble.
Both will drop but i see Sirius coming back strong and XM going the other way.
I am convinced that all radios Sirius and XM made in at least the past two years can tune each others service only needing a software download to do so.
It was mandated by the FCC and to not make those radios could mean loss of licence.
Just think of the file material the DoJ requested and got: 6 million pages to study. I know it is important not to create a positive precedent for a merger which is alledgedly viewed as a monopoly.
Of course, there is this 10-year-old FCC limitation in that one company should not be able to control the entire sprectum. But that was 10 years ago. Moreover, it is a merger of equals, combining forces to obtain efficiency and benfits for the consumer, their astonishing 17 Million Voluntary Subscribers!
For years I had not studied anti-trust law and boy, what subject to read.
However, it comes down to recognizing market power and monopoly power -- both do not apply in this case.
In my view therefore a monopoly 100% not the case -- as the strongest merger-opponent is the NAB: why would they worry, if not fishing in the same, wide pond? Cross-elasticity is the word; it is not as if radiolisteners have starved from entertainment before the SDARS were there... on the contrary: the market landscape has become so wide every consumer has a free choice of radioconsumption. If as a consumer you desire uninterrupted, ad-free reception and CD-quality throughout the country, driving from coast-to-coast of course you buy one, or two or soon: just one supplier of this service. If you can't or do not want to pay: fine, stick to good old FM or AM or CD or even cassette.
Even if the happily merged companies nastily would up their charges to say $29.99/month , they would shoot in their feet as consumers still have a choice and would churn rapidly. This is not about about a milk-cartel!
So DoJ, so FCC: this is 2008 go ahead, give the merger a greenlight and get back to bigger matters.