And at least one Senator is sure the merger is a bad idea.
At Motley Fool, says, "Something isn’t right. It’s taking the FCC too long to clear a deal that the stingier Department of Justice approved last month." Fool’s Rick Aristotle Munarriz notes that the stocks are suffering somewhat of a bloodletting, but wonders why. "Yes, XM and Sirius are posting steep losses with costly satellites to maintain," but suggests that up to 7.2B in annual overhead savings are in store once the FCC comes on board with approval. He says that Mel Karmazin, who is moving quietly for now, will become a tiger once the merger is approved and will be able to talk the stock back up with "a little less modesty."
Byron Dorgan (D-ND) has fired off a letter to FCC Chairman Kevin Martin urging that the two companies remain apart. "The approval of the transaction by the Department of Justice reveals the Department’s disregard for the public interest and unwillingness to enforce antitrust law," wrote Dorgan. "The full responsibility for protecting the public interest now resides with the FCC. I hope that the FCC will stand up for competition and deny this merger." He noted the obvious result of a monopoly: "Not only will prices rise, but diversity and quality of content will deteriorate. Consumers will not get the best of both worlds if the companies merge." He also noted that neither company is saying the merger is necessary for survival.
Reuters notes that the timing may already be out of whack, however. Both XM and Sirius prosper most during the holiday gift-giving season. The lack of approval is costing them critical lead time in manufacturing and stocking interoperable receivers, a fact which could delay the merged entity’s ability to realize many of the benefits of the wedding for months.
RBR/TVBR observation: If the FCC does go ahead and approve this, will the companies be eligible for the shoot-yourself-in-the-foot award for 2008? If they were actually competing with one another via the availability of interoperable receivers that were mandated in the first place, this wouldn’t be a problem, would it? Tsk, tsk, tsk…