XM and Sirius Get Important DOJ Merger Approval
The U.S. Department of Justice gave Sirius Satellite Radio and XM Satellite Radio Holdings antitrust clearance moving the two closer to becoming one. Before the two companies are able to complete the $13 billion merger the deal faces scrutiny and approval from the Federal Communications Commission. The FCC is expected to weigh-on the merger sometime soon.
Arguing to allow the merger to go through Justice Department officials said a combined company XM and Sirius won't be able to raise prices in today's market because of competition from broadcast radio, digital music players, and other types of music services.
The Justice Department wrote in a statement: "Any inference of a competitive concern was further limited by the fact that a number of technology platforms are under development that are likely to offer new or improved alternatives to satellite radio. Most notable is the expected introduction within several years of next-generation wireless networks capable of streaming Internet radio to mobile devices."
Consumer Advocates Fight for Conditions
Meanwhile consumer interest group Public Knowledge issued a statement on the merger urging federal regulators place a number of conditions on the merger - if approved. Conditions include:
* The combined XM and Sirius should make available pricing choices such as a la carte or tiered programming;
* The new company should make 5 percent of its channel capacity available to noncommercial educational and informational programming over which it has no editorial control.
* The new company should agree not to raise prices for its combined programming package (as opposed to each individual company?s current programming package) for three years after the merger is approved.
* The new company should make the technical specifications of its devices and network open and available to allow device manufacturers to develop, and consumers to use, any device they choose without interference.
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About time. Longest merger in American history. You can thank Jim Cramer for calling out names of bought-off politicians and the NAB who were holding this back.