My Mixed Feelings About the XMSirius Merger
3/25/2008 4:00 PM
There's a part of me--the orderly, get-it-all-in-one-place guy--who is
happy about the Justice Department's approval of the XM/Sirius
satellite radio merger. The potential for merged music offerings
doesn't matter so much to me as the idea that all of the big on-air
personalities and sports options will be available via one receiver.
But the other part of me doesn't like the merger at all, because it
reminds me way too much of large corporations that my hero, Teddy
Roosevelt, worked so hard to "bust up" in the early 1900s.
I don't even like the "Monopoly" board game
, let alone what the real-life anti-competitive practice
does to consumer pricing and options. It just seems to me that every
time you open the newspaper (ok, turn on the TV), there's another story
about the U.S. government's increasingly pro-corporation direction. It
just doesn't seem healthy to me.
I recently learned the difference between Communism (where the
government runs the businesses) and Fascism (where corporations run the
government) and I'm starting to understand why radical 60s protesters
loved to use the term "Fascist Pig" when protesting the Vietnam War.
The more we, the People, sit by and allow our elected leaders to rule
in favor of big business, the more we risk becoming a fascist country.
The difference with the proposed $5 billion satellite radio merger,
which was announced more than a year ago and must still be approved by
the Federal Communications Commission, is that neither Sirius nor XM
has been a profitable venture to date. In other words, it's not exactly
like the proposed combined company would actually lead to world
domination. It's just that the principal of the thing feels wrong to me.
As the New York Times reported
on Monday, the merger is opposed by consumer groups and broadcasters
who say that it will force up prices and reduce the programming now
available from the two competing systems.
The Justice Department's antitrust division announced Monday that it
approved the merger after determining that prices were not likely to
rise, in part because of competition from other program sources, like
HD Radio as well as iPods and other MP3 players that can be connected
to home or car audio systems. The deal, the agency said, was unlikely
to hurt competition or consumers.
F.C.C. officials have offered conflicting signs on whether the
commission would approve the merger. The commission's chairman, Kevin
J. Martin, was quoted last week as saying that "I haven't figured out
what I think we should do on it yet."
Mr. Martin is thought to support an important element of the deal--the
creation of a so-called la carte system of pricing, which would allow
customers to choose among packages of programs instead of the full
lineup that subscribers must now purchase.
The Justice Department's announcement was welcomed in a joint statement
by XM and Sirius, which said a merger would lead to "lower prices and
Monday's announcement was denounced by several Congressional Democrats who had opposed the merger as anticompetitive.
"The Bush administration has apparently never seen a telecommunications
merger it didn't like," said Representative Edward J. Markey, Democrat
of Massachusetts who leads the House Energy subcommittee on
telecommunications. Senator Herb Kohl, Democrat of Wisconsin and
chairman of an important antitrust subcommittee, said the deal would
"create a satellite radio monopoly."
Gene Kimmelman, a spokesman for Consumers Union, the nonprofit
organization that publishes Consumer Reports
magazine, criticized the
decision. "If this is what our competition cops do," he said, "we might
as well close shop and save taxpayers a few hundred million dollars
because they're not doing their jobs."
In a news conference, Barnett, who leads the Justice Department's
antitrust division, insisted that the department did not view the
merger as creating a monopoly. He said that radio listeners had many
other choices for programming, and that the alternatives would only
"Some people may view iPods as a particularly good alternative," he
said. "They may view HD radio as an alternative." He said that much of
the programming now available on XM and Sirius might soon be available
through wireless broadband connections on the Internet or cellphones.
It's strange logic, but apparently the Justice Department bought it.