XM/Sirius merger hung up in Washington


The nation’s two satellite audio services had hoped for an answer on their pending merger by the end of 2007, and a lot of analysts and other close observers thought they’d get it. Not only that, but many of the analysts thought the answer would be positive, despite buzz that for the DoJ to arrive at that conclusion it would involve overruling staff objections to the merger. But so far neither the DoJ nor the FCC have weighed in.
"As the companies said form the outset, we expected to complete the professes at DoJ and the FCC so that the regulators could make their decisions and the merger could close by the end of 2007," the companies told Reuters in a statement. "We have fully complied with the requests from both agencies. The ball is now in their court and we look forward to their determination."

When the services were first chartered, it was with the expressed taboo on a merger. They have argued that in the years since their birth the audio marketplace has changed beyond anybody’s expectations and that they compete with numerous services including broadcast radio, iPods, the internet and other services. Others, notably the NAB and numerous antitrust experts, have pointed out that the two companies provide a unique service and must be left in competition with one another.

RBR/TVBR observation: At least one attorney told Reuters that this is a complicated case to review. We think not at all. The mere fact that approval has to be accompanied by promises of a temporary rate cap proves there is the threat of monopoly abuse down the road, the instant the temporary period expires.