Merging Together

The XM and Sirius Satellite Radio Merger

Because the world is always about money and competition, the Justice Department has to figure out if a merger between XM Satellite Radio and Sirius Satellite Radio would lessen competition. Of course in order for this issue to come to a conclusion the great people with the Federal Communications Commissions must follow suit. So what is the big problem then? Well the National Association of Broadcasters begs to differ with the Justice Department and disagrees whether it will lessen competition. An article quoted:

“In the retail channel, where the parties likely would continue to compete to attract new subscribers absent the merger," it said, "the division found that the evidence did not support defining a market limited to the two satellite-radio firms that would exclude various alternative sources for audio entertainment, and similarly did not establish that the combined firm could profitably sustain an increased price to satellite-radio consumers."

So, in the end no one is paying anymore money…no one gets hurt, right? The division has reached this conclusion because the merger would not enable the parties to increase any prices to satellite-radio customers for several reasons. First, there is a lack of competition between the parties even without the merger. Second, there are competitive alternative services available to the consumers. Third, there is plenty of technological change headed out way. So the Department feels that the merger will be a great thing of course. However, The National Association of Broadcasters are angry because they are not getting heard.

Of course The National Association of Broadcasters is still going to be upset because they feel that the Justice Department has broken FCC rules all along. They believe that giving them a monopoly is basically absurd. The broadcasters were the ones who felt betrayed:

“The merger had been strongly opposed by broadcasters, which argued that allowing the two companies to get together would create a monopoly in satellite radio, while the companies had said that they would simply be a stronger competitor in a crowded audio market that included cable radio, terrestrial radio and the Internet.”