Goodlatte questions the XM-Sirius merger

Brent Finnegan -- February 22nd, 2007

I read on Wired that Representative Bob Goodlatte, whose pet issues include fighting online gambling and internet taxes, is urging the House Judiciary Committee to look into whether planned merging of XM and Sirius satellite radio is in violation of any antitrust laws.

Is a merger like this, which would result in a market monopoly, in the best interest of the consumer? When DirecTV and Dish Network tried to merge, the US Department of Justice didn’t allow it for that very reason.

As far as I know, Goodlatte is the only Republican (perhaps the only member of Congress?) that has made any cautionary statements about this merger.

9 Responses to “Goodlatte questions the XM-Sirius merger”

  1. Dave Briggman says:

    I’d prefer that Congressman Goodlatte actually do something while in office to actually benefit the citizenry. I own stock in both Sirius and XM and I’d love to see a merger…lest both will die a quiet (literally) death.

    Perhaps Congressman Goodlatte could ensure that we can actually get over-the-air channels on either respective “dish” (that means I get to pick what ABC affiliate on my TV — as opposed to having to settle for WHSV), or ensure that broadband is widely available in rural areas throughout the Country — as opposed to having to pay higher prices to secure broadband via satellite.

  2. Reaganite says:

    Ditto, Dave! I need that Sirius stock over 4.50 as soon as possible!

  3. Dave Briggman says:

    No kidding…lemme see, at $4.50/share, I’ll have $22.50 in stock in Sirius! ;-)

  4. Justin says:

    I don’t know. As a consumer of XM, I would like to sample programming of Sirius. I think that a monopoly is only bad when another company of some sort of equal competitive status of the two companies merging gets hurt in the merger.

    They are the only two players in the market. Who cares as long as they don’t raise the subscription?

    The only people suffering are the subscribers that can’t have baseball broadcasts or good Christian hard rock stations (I used to dabble in it on XM, now it’s crap).

  5. finnegan says:

    Yeah, it’s all about the SIRI, isn’t it. Looks to me like it’s been on the steady decline for the last year, as has XMSR.

    “Who cares as long as they don’t raise the subscription?”

    What makes you think they wouldn’t? What would stop them?

  6. Del Marvel says:

    Talking about Goodlatte’s legislation, an interesting aside: for years his big issue was software encryption and he was on the same side as the ACLU. In fact if you went to the ACLU website, they had a section devoted to Goodlatte. Of course, you never heard anything about that connection around here.

  7. finnegan, you are looking at the market too narrowly. I go into great detail in my post here on why this is a GOOD thing.

    “It would be a grave mistake to take the narrow view that the only competition that XM and Sirius face comes from one another. Consumers have a multitude of options — traditional free FM and AM stations, iPods/MP3 players, Internet radio, etc. XM and Sirius are looking to merge in order to survive in this competitive environment. Would the government rather have only one satellite radio company because one went bankrupt or only have one because the two existing ones merged to form an even better combined service? Would they rather have NO satellite radio because XM and Sirius drove each other into the ground trying to compete?

    . . .

    “Nearly 14 million people are paying $12.95 per month to subscribe to satellite radio. That is nearly 14 million people that traditional over-the-air radio stations can’t give away their product to. That says something about the quality of the two products being offered here.”

  8. finnegan says:

    You wouldn’t by any chance happen to own SIRI stock too, Riley?

    The PBS article I linked hit on many of those points (competition from ipods, etc). I understand the reasons for the merger, but I still think competition is the only way a free market can work. I think the DoJ did the right thing by denying the DirecTV merger. If this merger goes through, I seriously hope that another viable competitor emerges (no pun intended).

    Then again, you won’t catch me bending over backwards to defend Goodlatte. This is not a pet issue of mine. I just thought it was interesting.

  9. finnegan says:

    From NPR today:

    The merger between XM and Sirius Satellite Radio is now in the hands of the Federal Communications Commission. That’s the last hurdle now that the Justice Department approved the $5 billion deal Monday.

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