Sirius and XM: Roadblocks to Common Sense

Give me one good reason why Sirius and XM should not merge. Competition? That's what the 'man' wants you to believe:

"Shortly after the merger was announced, many politicians, as well as the National Association of Broadcasters, a powerful trade organization representing the traditional radio industry, voiced their objection to the merger, arguing that a deal would be anti-competitive and hurt consumers."

How would their merger be anticompetitive? Just because they won't be competing against one another doesn't mean they wouldn't face fierce competition. iPods and podcasts, CD players, other forms of media and entertainment, and of course, terrestrial radio all serve as competition for satellite radio. But maybe that's the problem. A unified satellite radio team would definitely create MORE competition for the members of the NAB and facilitate an even greater market share shift from old to new.

"The deadline to submit public comments is July 9. So far, the National Association of Broadcasters, influential research firm the Carmel Group and seventy-three members of Congress have written letters urging the FCC and Justice Department to shoot down the merger. Meanwhile, consumer rights group Americans for Tax Reform, the Hispanic Federation and retailer Circuit City have written letters in support of the deal."

I doubt as many members of congress would have written letters had Howard Stern not made the jump from terrestrial radio to satellite. In fact, I'd bet the deal would already have been approved if not for that fact.

Economies of scale indicate that a merger of the two could lead to a reduction in the cost of operations, which could be passed on to the subscribers. Furthermore, Mel Karmazin, CEO of Sirius has pledged that if the deal were to happen, current radios would not become obsolete. The deal makes sense.

But I don't see this panning out. There are too many interests that don't want to see the two companies combine. Hopefully they will survive without each other.

Disclaimer: I am a subscriber to Sirius and staunch advocate for the merger. I haven't listened to terrestrial radio in seven months. ( Maybe this is the reason why the NAB is so scared.)