Fools rush in?


The proposed merger of XM and Sirius satellite radio operations seems to have found a new fan: Wall Street watchdog The Motley Fool. "They’re picking curtains, not coffin drapes. They’re looking at honeymoon brochures instead of divorce papers," writes the Fool, anticipating eventual regulatory approval for this wedding. "Even graying regulators are beginning to see that the marketplace is evolving with every passing digital audio introduction." The Fool noted the NAB’s opposition, which it says lacks "a firm footing." It says that the NAB claim that the merger will bring with it increased costs for both subscriptions and equipment have been addressed by a "cynic-popping move," the provision of special packages for as little as 6.99 a month, allegedly sending the NAB back to its original objection to a merger in violation of the companies’ charters. Reports note that the merger’s 180-day regulatory clock is set to expire in December, and FCC Chairman Kevin Martin expects to deal with it within that time frame.

RBR/TVBR observation: Huh? The Fool mentions one bare-bones 6.99 tier and fails to notice that most of the packages cost close to or more than the 12.95 monthly pricetag currently attached to these services, all for less channels. And it doesn’t drop one atom of ink into explaining how the one 6.99 tier gets a subscriber around the need for a new receiver, especially since the two companies have already ignored the requirement that they use interoperable equipment. And the Fool fails to note the fact that price capping has been prominently discussed as a mechanism to enable this merger to go through, something that would not be necessary if true competition were going to be present. If the government has to have a role in pricing, than we are not talking about free enterprise. We’re talking about a monopoly of convenience. But it won’t be convenient for consumers or programmers stuck with only one place to go if they want a mobile service or have a program to sell.