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Final vote on the merger could come at any time

FCC Chairman Kevin Martin has recommended that the merger between Sirius and XM be approved according to the Associated Press. To get Martin’s approval, provisions were added to the merger deal that would turn over a portion of the available bandwidth from the satellite providers to noncommercial and minority programming.

The provisions for turning over portions of the satellite bandwidth require the two companies to donate 8% of their satellite capacity to noncommercial and minority broadcasts. That available bandwidth equates to about 12 channels each from Sirius and XM for a total of 24 channels.

Other provisions from Martin to his approval include an open radio agreement that would promote competition among manufacturers of satellite radios and a three year price freeze on all packages and an a la cart option to be available within three months of the close of the deal.

The AP quotes Martin from a statement, “As I've indicated before, this is an unusual situation. I am recommending that with the voluntary commitments they (the companies) have offered, on balance, this transaction would be in the public interest.”

Despite Martin’s approval the final vote to approve the merger is yet to happen and the other four commissioners could still say no to the merger. There is no clear indication on how the other commissioners feel on the merger at this time.

The approval of the merger has been long sought by Sirius and XM. The merger was approved by the U.S. Justice Department in March. When Sirius and XM first announced they intended to merge their two companies the deal was worth in the area of $13 billion.

The final vote on the merger could come any time after Martin’s recommendation is given to his fellow commissioners.

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Finally!
By JackBurton on 6/16/2008 1:27:42 PM , Rating: 2
About freakin' time! How is it that the ATT/SBC and Exxon/Mobile mergers flew right through, and this one took FOREVER? Ridiculous!




RE: Finally!
By othercents on 6/16/2008 1:52:43 PM , Rating: 1
quote:
How is it that the ATT/SBC and Exxon/Mobile mergers flew right through, and this one took FOREVER?

Competition..

ATT/SBC were able to show that they compete against other cell carriers for long distance. Exxon/Mobile have other direct competitors.

However in some rural areas there isn't any other option other than Satellite radio. For the 4 or 5 people who live in those areas they would be at a disadvantage.

Other


RE: Finally!
By masher2 (blog) on 6/16/2008 2:51:30 PM , Rating: 5
It all boils down the market definition. Satellite radio has so much competitive overlap not only with terrestrial radio but other entertainment sources in general, that a "monopoly" in this market is essentially meaningless.

In any case, the point is moot -- without a merger, both companies would soon be bankrupt and gone. This merger is clearly in the best interests of the public.


RE: Finally!
By omnicronx on 6/16/2008 3:01:24 PM , Rating: 3
quote:
without a merger, both companies would soon be bankrupt and gone.
They have driven each other out of business, by adding to their operational costs to have an advantage over their competition, how is that our problem?

You can't just take the good and not the bad's of the free market just because their businesses are doing badly because of terrible excecutive decisions.

Why not let AMD and Intel waste all of their money on poor business moves causing them both to go bankrupt, and let them form a monopoly, just to save the business.


RE: Finally!
By masher2 (blog) on 6/16/2008 3:37:22 PM , Rating: 2
> " how is that our problem?"

It becomes your problem when both firms go belly-up, and your shiny new XM or Sirius receiver starts picking up nothing but static.

> "You can't just take the good and not the bad's of the free market "

Err, since when did antitrust legislation have anything whatsoever to do with free markets? If the market here was truly free, the firms would have already merged years ago.


RE: Finally!
By dreddly on 6/16/2008 5:07:24 PM , Rating: 2
Anti-trust legislation exists precisely because a monopoly can be by definition the opposite of the free market. Some monopolies are useful because they provide a public good, other monopolies are harmful because they act against public interest.

In order to receive the benefit of the free market, the institutions that represent the common (public) interest need to ensure that the public will not be adversely effected by private (these businesses exist under (public) law to benefit their shareholders) efforts to reap their gains from unfair and uncompetitive practices.

Given the FCC's proclivity to act against public interest, it is at least reasonable they take time to review the impact of this merger. Overextending your business practices on unrealizable growth potential in a costly industry, is not reason for the public interest to be overlooked.


RE: Finally!
By masher2 (blog) on 6/16/2008 6:05:28 PM , Rating: 3
The point is that Sirius/XM still isn't a monopoly. The product they're selling isn't "satellite radio" as much as it is "mobile entertainment". Given that, they have a tremendous amount of competition, competition that will ensure that the merged entity still provides good service at reasonable rates.


RE: Finally!
By Ringold on 6/16/2008 10:49:51 PM , Rating: 2
I don't understand peoples source of contention. Even if we limit the definition of their market to being simply satellite radio, then given the fact they're bleeding money like mad, the position of people opposed to the merger sounds to me like "We must burn this village in order to save it!"

What good is anti-trust concerns in a market that no longer exists at all?

How rational is that? And if anyone doesn't think its an existential crisis for them, look at their data; XM had a net income in 2007 of -682 million, it's balance sheet is frightening, and its barely changed at all since 2003. Just a rough estimate, but it looks to me like they've burned north of 3 billion in cash since 2003, with no hope in sight.

No merger, no satellite radio market at all.


RE: Finally!
By omnicronx on 6/16/2008 2:54:05 PM , Rating: 2
quote:
However in some rural areas there isn't any other option other than Satellite radio.
And there are currently only 2 big satellite radio providers. I my opinion companies should not be granted the ability to become what most would consider a monopoly, just because they are driving each other out of business with the high operation cost of adding extra channels to get the one up on the other company.

It's really not our problem that both companies continue to bite touth and nail to have more channels than the other. Allowing them to merge is not going to drive down prices, its just going to give us a bunch of duplicate channels we don't need, and 1 or 2 channels that the other provider did not have.. I expect to see prices rise, not decrease in the near future if this deal goes through..


RE: Finally!
By masher2 (blog) on 6/16/2008 3:40:43 PM , Rating: 4
> "its just going to give us a bunch of duplicate channels we don't need"

Duplicates? Only one of the two companies has Stern, only one has Major League Baseball games, only one has NFL and NASCAR, only one has Oprah...a merger means a single subscription will be able to net you all these entertainment options, all from a single provider.


RE: Finally!
By AstroCreep on 6/16/2008 4:46:56 PM , Rating: 2
quote:
ATT/SBC were able to show that they compete against other cell carriers for long distance.

I think he meant the merger for 'normal' landline service that recreated the AT&T of old. Not the wireless phone merger between AT&T Wireless and Cingular.


AP
By ADDAvenger on 6/16/2008 1:37:07 PM , Rating: 5
quote:
The AP quotes Martin from a statement, “As I've indicated before, this is an unusual situation. I am recommending that with the voluntary commitments they (the companies) have offered, on balance, this transaction would be in the public interest.”


ZOMG, you quoted the AP, you're gonna get it now!




RE: AP
By maverick85wd on 6/16/2008 3:20:01 PM , Rating: 2
you've broken the rules.

First rule about quoting The AP. No one quotes The AP.


It was opposed by many
By Chaser on 6/16/2008 2:08:33 PM , Rating: 2
Like the mega station monopoly-like chain of Clear Channel for instance.

I don't think satellite radio puts terrestrial radio in any financial jeopardy. I have used both XM and Sirius but I still enjoy tuning into a local station that's city centric. There's more to appreciating local radio than just traffic reports and weather.




RE: It was opposed by many
By strikeback03 on 6/16/2008 2:38:46 PM , Rating: 2
I can't stand our local radio stations. There is only one that even pretends to play music I like; and they have dumb talk shows during both my morning and evening commute. The icing on the cake is the fact that they run 20-30 minutes of commercials per hour.

Aside from possible price increases, I don't see much downside to this for the customer. I chose XM as I like their overall selection better, but there are times when traveling that I would like to be able to subscribe to an NFL game or something. Also, if they are not competing with each other to snap up all the radio personalities and sporting leagues, costs for that programming might drop, and we could always hope those savings would be passed to the customers.


RE: It was opposed by many
By masher2 (blog) on 6/16/2008 2:53:35 PM , Rating: 2
Given how quickly both companies are hemmorhaging cash, I doubt you'll see price drops in the near future. What you will see, however, is likely an eventual improvement in offerings, and a company stable enough so you don't have to worry about it going bankrupt and leaving your shiny new receiver with nothing to receive.


Terrible audio quality
By Chudilo on 6/16/2008 2:35:02 PM , Rating: 2
I still don't understand how people think that paying for radio that sounds worse then FM on like a third of channels is a good idea.
Perhaps the general consumer can not be able to hear the difference. But most technologically inclined people most certainly can. I don't know about the rest of you, but I can easily tell the difference about a 48k/128k/192k MP3 and about a third of the music channels on Cirrius are at 48k. Thant's completely unacceptable from a new technology that's supposed to be an improvement on something that's already common. Some of these stations sound worse then FM radio.




RE: Terrible audio quality
By Spivonious on 6/16/2008 2:55:20 PM , Rating: 2
Yeah, my sister had XM and unless she had a clear view of the satellite, it downgraded the quality so much it was like RealAudio 1.0


RE: Terrible audio quality
By INeedCache on 6/17/2008 9:34:31 AM , Rating: 2
I don't listen to most of the channels. The ones I do sound fine. Kudos to you if you have audiophile ears. I like it because I get music wherever I am, and living in a rural area, that's important as there are not many stations to receive, let alone many good ones. Finally, I don't have to listen to some failed stand-up comic DJ babbling on and on, or to some hourly or half-hourly news headlines garbage. Paying to get music that might not be the best quality to your ears is still better to me than getting none at all. Do you only eat if the food is gourmet?