XM and Sirius, Perfect Together

So, of course you have heard by now that XM and Sirius want to merge together to form one company, but the folks at the FCC, according to the WSJ, will face a high hurdle due to the 1997 ruling that created the industry.  I also watched the interview found on the same WSJ article with former FCC Chairman Michael Powell and he provided good insight into what can occur.  What I don't get is, why the FCC can't see that this is good for consumers?

I've been an XM subscriber for 3 years and have a second one installed in my office.  I'm hooked and don't mind paying the monthly fee, so very often I'm asked about the service.   Very often I'm asked about the differences between the two and other than the content offerings, I don't think there is much difference between them; a few years back I helped out one of my agencies of record with a pitch for Sirius (they didn't win it but I got a free lunch out of it). My car came loaded with XM so that's why I have them.  If I had to choose over again, I'd probably pick Sirius because of the NFL package and unique programming channels.   

In fact, I owned both stocks up until about 6 months when I cut my losses with XM and used the proceeds to by Archer Daniels.   When people asked me which one to buy, I'd always say both because they were the only two in the category.  I kept Sirius because I believed they had more mojo, but that was it.

Now, if the FCC doesn't let them merge because of competition or what's best for the consumer, I think I'll vomit.  Found on the Powell video was a screen shot from the LA Times that showed that there are 80 million FM/AM users and 14 million satellite radio owners.  If that doesn't prove that there is competition than I don't know what will.

How can the FCC approve SBC to buy AT&T and then Bell South and stand behind that as good for the consumer?  XM-Sirius doesn't have pricing power because, well AM/FM is free and access to those waves are free - this is the direct opposite of telecommunications and net neutrality.  The RBOCs have pricing power which is what scares people on net neutrality; they also own the pipe (with cable companies) while radio does not.

According to the 1997 FCC report and order, the FCC wrote "in the Notice, we pointed out that satellite DARS will face competition from terrestrial radio services, CD players in automobiles and homes and audio services delivered as part of cable and satellite services  and asked whether these delivery media, coupled with fewer than four DARS providers, could ensure an effectively competitive audio services market."  I don't understand why 2 is competitive but 1 is not when you compete with the services the FCC wrote about way back in 1997.

As a big user of satellite, I think this is great for consumers and will simplify their choices and provide even more content.  Unlike the telecommunications world, I don't see how this harms consumers....

PardonMyFrench,

Eric

Comments

[Jeff Herz]

Eric,

Great point of comparing this deal and the Baby Bell's trying to rebuild the mothership 25 years after their birth.

I also agree that the merging of these two companies is both the right decision from the business perspective and for the consumer. I have honestly held off committing to one or the other because I was unsure of who would prevail. I did not want to own a beta tape at the end of the day.

The FCC seems to be a self serving, load of crap who only really seems interested in own self-perpetuation or pandering to the political party in control. You are correct that the true competition for satellite is FM radio, not other sattelite stations. And if it was any other way, then they should allow Clear Channel, and CBS and other major station owners to purchase a satelite license, though I am guessing the terrestial owners would find a way to screw it up, but hey that is just me.

Jeff