Why the DOJ approved the Sirius-XM merger: Barnett speaks

Wednesday, April 2, 2008 at 12:49 PM
Tags: 2, XM

Department of Justice


After the Department of Justice approved the merger between Sirius Satellite Radio Inc. and XM Satellite Radio, they issued a lengthy analysis of why they reached this decision. But many found that "analysis" to be severely lacking because little evidence was given.

Following their approval of the merger, the DOJ held a conference call to explain the decision. I'm not sure if this will satisfy those who'd like to see more evidence by the Justice Department, but it gives a bit more color than the three-page release.

Thomas Barnett According to Broadcasting & Cable, Barnett said that in several areas the parties do not compete, especially for current subscribers who have already purchased the equipment. Given the fact that the radios are not interoperable, he said, people don't switch between services much.

He also said they do not compete in the "most important" distribution channel: the OEM channel.

Barnett said that Sirius and XM have exclusive deals with automakers stretching to 2012, and that after that there will likely be even more competition for in-car audio, including handheld mobile broadband devices as well as AM/FM radio, HD Radio and MP3 players.

They did find some competition in retail that would be eliminated by the merger, but there wasn't enough people who considered the two companies to be the closest substitutes to justify finding that the merger would harm competition or consumers.

When asked whether the DOJ had approved the creation of a monopoly, Barnett said no, that it had not found that the evidence did not support limiting the market for audio entertainment to satellite.

He also said that while Justice took into account possible future competitors given the rapid advance to technology, that was not "one of the core drivers" of the decision.

Even without that assumption, he said, he didn't think Justice would have had a basis for challenging the transaction.

[Broadcasting & Cable via Orbitcast Forums]

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Comments

Charlie it's time for another try.

Bullshit. This administration has not found many, if any merger applications it didn't like. That point is plain and simply the truth. The Bush history is one that favors corporate entities over people. It's neither good nor bad, just the history.

It was commonly reported that both companies pushed this merger at the time they did to have a pro-merger voice in DC. Say what you like, when you have two companies doing the same thing on substantially the same platform and they are allowed to combine into a single entity with no other copetitor, that is a monopoly.

"Given the fact that the radios are not interoperable, he said, people don't switch between services much."

So if Sirius and XM actually offered interoperable radios like they said they would from day one, the merger would be bad. But since they reneged and prevented their customers from easily choosing between services, the merger is A-OK. Wow.

When can we get rid of this poster with nothing else to do but blabber all over forums, discussiongroups and call himself 'anonymous coward'?

Why do we let him speak up?
Why would anyone listen to, hire, or take at anytime seriously a possibly obsessed, half-witted person, a non-entity, too shitty-shy but name himself 'anonymous coward'?

All he/she needs doing is fill in a name in a box. Someone not taking that minor effort is a disgrace to this forum and offending his readers.

As a moderator, I would eliminate the non-name option.



"When can we get rid of this poster with nothing else to do but blabber all over forums, discussiongroups and call himself 'anonymous coward'?

Why do we let him speak up?
Why would anyone listen to, hire, or take at anytime seriously a possibly obsessed, half-witted person, a non-entity, too shitty-shy but name himself 'anonymous coward'?

All he/she needs doing is fill in a name in a box. Someone not taking that minor effort is a disgrace to this forum and offending his readers.

As a moderator, I would eliminate the non-name option. "

Otherwise A.C. has valid points, named or not... and I agree with what he/she says.. bravo...
I think the DoJ is in fact trying to cover up.. keep it looking legit (oking the merger) when in fact it is a monopoly... two companies allowed to merge equals... wait for it.... one... mono.. monopoly.. learn it... know it... live it....

"It was commonly reported that both companies pushed this merger at the time they did to have a pro-merger voice in DC"

That's complete rubbish, but rant on. At least Barnett's assessment was well reasoned, although the process took way too long.

"When asked whether the DOJ had approved the creation of a monopoly, Barnett said no, that it had not found that the evidence did not support limiting the market for audio entertainment to satellite."

Quite right, and this point is even more apparent today than it was when the merger was first petitioned.

and blocks the merger on the basis that neither company has lived up to the terms of the original license by failing to deliver an interoperable radio. If the companies can develop such cheap receivers that they are practically giving them away at retail without requiring an activation, surely they could create a $69.99 receiver that is interoperable.

They already have units that can use each other's anntenna and 5v power cords, how hard can it be to integrate a chip for the geniuses at Sirius and XM that gets both services?

What these companies are seeking is the reward of merger for breaking the rules they agreed to live by.

In the end, we'll see what happens.

and blocks the merger on the basis that neither company has lived up to the terms of the original license by failing to deliver an interoperable radio."


That is not a reason to block the merger. The reasoning of the anti-merger people stretches credulity.

The DOJ FAILED consumers with this BS "approval". The FCC needs to do the right thing and STOP this Sirius/xm "merger" MONOPOLY.

Consumers get screwed again and again by MONOPOLY'S. Choice is being removed, Competition is being removed, prices WILL go up, consumers will PAY MORE for less.

Consumers get screwed again and again by MONOPOLY'S. Choice is being removed, Competition is being removed, prices WILL go up, consumers will PAY MORE for less."


Ahhhh, shaddup.

I personally find it disgusting the way the NAB is fighting this merger, as if anyone really believes that their true motive is protecting the consumer.

By definition this cannot be called a monopoly for the following reason.
A monopoly would be able to charge whatever it wanted to charge, limited only by what the market could handle.
Because alternative choices exists (terrestrial radio, IPOD, HD, Internet Radio, etc.), the merged company would only be able to charge what the consumer was willing to pay before choosing an alternative product.
A true monopoly would be able to charge well over $100 a month, because no other alternative would exist for the consumer.
So I challenge you to HONESTLY answer the following two questions.
1. Would the merged company be able to charge $100 a month for their basic service?
2. If not, Why?
If you answer those two questions honestly you will see that the merged company could not be called a monopoly.

I find these Anonymous Coward postings very Cowardly.....
y'all a buncha pussies

When the SDARS licenses were issued in 1997 it stated they had to develop an interoperable radio. Where does it state the companies had to bring these radios to the market? Who would pay all of the money to subsidize these radios in order to make them affordable to consumers when neither company could be gauranteed they would have a new subscriber?

Sirius and XM did not violate a condition of their licenses just because they did not bring interoperable radios to the market. They developed an interoperable radio. It is sitting on Mel Karmazin's desk. This is all the license stated they had to do. So the argument that the companies should not be allowed to merge because they did not bring interoperable radios to market is nonsense.

If the comapnies had been able to some how begin broadcasting in 1997, immediately after the licenses were issued, it is safe to assume that they would have captured more than the 3% to 4% of the market share they have now. I could not imagine ten years ago satellite radio coming to the market and the two companies not capturing a large share of it. So yes, in 1997 these two companies merging would have been a monopoly. That was the whole point of the clause preventing the two companies from merging. No one could have imagined that in a few years Apple Inc. was about to change the audio entertainment industry forever and the revolution that would follow.

In regards to Sirius and XM's current market share, what do you think would happen if they raised subscription prices? They certainly would not gain market share because their prices went up. Even at current subscription prices they only have 3% to 4% market share. If Sirius and XM merging creates a monopoly, where are the other 96% to 97% of the market getting their audio entertainment? Or do they just sit their in complete silience?

For those of you who believe this merger creates a monopoly, you are living in the past.

THE MERGER IS FOR THE CONSUMER NOT FOR THE NAB.

All the NAB are doing by getting there pals from the 11 states Attorneys General to oppose the siri/xm merger is to delay the merger more. All the NAB have done is try to delay or harrass this merger!

I say move to disbar those 11 AG's for interfering with federal departments and wasting tax payers dollars! Not one of them will be very popular in their home state.

Coward wrote: "Choice is being removed, Competition is being removed, prices WILL go up, consumers will PAY MORE for less."

As a consumer, I don't have to pay any more than I want nor do I need to have satellite radio. If Sirius were to raise prices beyond what I'm willing to pay, then I'd go back to listening to internet radio at work, making notes of the songs I like, buying them through iTunes, syncing them to my iPod and then listening in my card via an FM transmitter. Or I suppose I could always listen to crappy, free radio or look into HD Radio. Seems like tons of choices to me.

I suppose you'll (Coward) keep sticking to your NAB talking points though.

For those taking notes –

I of course meant "car" not "card" when talking about listening to music through my iPod via an FM transmitter.

Let's get this merger approved already. It is long overdue, and has past every hurdle proving the case that it's pro-consumer. Commissioner Martin has always said that he would move quickly to approve once the DOJ made it's decision. I find it comical the terrestrial radio monoply is now trying to thwart JUSTICE with their underhanded criticism of the Justice department, no less.

If SIRI/XMSR is such a horrible monopoly, why is it that one or both of these companies is very likely to go belly up without the merger? This merger is the only way these two companies can survive. As far as competiition is concerned, I seldom listen to terrestrial anymore. Too many commercials, playlists suck, too many of the same really stupid songs on EVERY station...
I mostly listen to MP3s. If I lived in a more urban area, I would listen to streaming radio over wifi. In a few years, I will be able to get wimax. What does that say for monopoly? All of these are viable alternatives to satradio

Since we are all still waiting on the FCC, I thought I would use the time productively.
I made a list of all the things I could get done while I wait.
1. Learn Chinese
2. Watch the Olympics
3. Get my PHD
4. Plant a forest
5. Solve world hunger
6. Read the entire IRS tax code
7. Qualify to join the AARP
8. Watch Haley’s comet
9. Get a transplant
10. Die of old age

I used to work in retail and sold Sirius and XM. On multiple occasions I would pitch satellite radio to the customer, who said "I'm not interested I only listen to my Ipod." How can this merger be a monopoly when right there I could not make a sale because of Ipod. Does that not prove Ipod is a direct competitor? IF XM or SIrius lost a chance to make a sale because of a different product that is competition. You haters have to remeber that its not what the technology is, but what they offer to the consumer. Sirius and XM offer music. last time I checked consumers have many other options to get music.

I used to work in retail and sold Sirius and XM. On multiple occasions I would pitch satellite radio to the customer, who said "I'm not interested I only listen to my Ipod." How can this merger be a monopoly when right there I could not make a sale because of Ipod. Does that not prove Ipod is a direct competitor? IF XM or SIrius lost a chance to make a sale because of a different product that is competition. You haters have to remeber that its not what the technology is, but what they offer to the consumer. Sirius and XM offer music. last time I checked consumers have many other options to get music.

I used to work in retail and sold Sirius and XM. On multiple occasions I would pitch satellite radio to the customer, who said "I'm not interested I only listen to my Ipod." How can this merger be a monopoly when right there I could not make a sale because of Ipod. Does that not prove Ipod is a direct competitor? IF XM or SIrius lost a chance to make a sale because of a different product that is competition. You haters have to remeber that its not what the technology is, but what they offer to the consumer. Sirius and XM offer music. last time I checked consumers have many other options to get music.

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