Analyst says XM / Sirius merger won't be affected by Congressional letter

It looks like a recent letter from two members of the House of Representatives Judiciary Committee to Attorney General Michael Mukasey won't be enough to derail the seemingly inevitable XM / Sirius merger, at least according to one of those ever-present analysts. As OrbitCast reports, Representatives John Conyers and Steve Chabot had complained that Justice Department staff "may be trying to rush through the merger" before the Attorney General himself had time to fully participate, and that "Assistant Attorney General for Antitrust Thomas O. Barnett may intend to grant the merger over the objections of department staff." According to the AP, however, Stifel, Nicolaus & Co. analyst Blair Levin says that while the final outcome is indeed a "close call," he believes that "the department will give its blessing," paving the way for the FCC to give its go-ahead.

[Via OrbitCast]

[superfresh @ Dec 13th 2007 4:32PM]

What will be interesting to see is whether or not this merged company gets an infusion of subscribers. I've always wondered if satellite radio is experiencing the consumer hesitation that the Blu-Ray/HD-DVD format war is generating. Or, has everyone interested in satellite radio already chosen one company or the other.

[JBo @ Dec 13th 2007 4:46PM]

I've wondered that too. I always thought it was a bad idea to lock people in to hardware. Had both companies made it possible to subscribe to them on any receiver, then they'd truly be competing based on price and content, and I'd venture to guess they'd have more than twice the subscribers they have now. These aren't cell phones, a good quality satelite receiver costs some bucks.

[Aaron @ Dec 13th 2007 4:32PM]

Can they just get this over with already!

[peestandingup @ Dec 13th 2007 4:39PM]

After the merger, they better not start raising subscription costs or any other bullshit. That would REALLY suck. Its not like you can just take your money to another provider. There isn't gonna be one! And FM is a joke, so thats not even an option.

[TZK @ Dec 16th 2007 8:33PM]

If you have been keeping up with the two services, you would know that the idea is to LOWER monthly costs. Since you are a fan, obviously you knew that. 50 channels, $6... 25 cents each additional channel, ala'carte.

[JBo @ Dec 13th 2007 4:40PM]

Man, as long as they don't F with XM Comedy I'll be fine. The Sirius comedy channels blow.

[MitchSchaft @ Dec 13th 2007 6:53PM]

They actually plan to lower subscriptions down the line when this goes through. There is nothing but good that will come for us Sirius/XM subscribers. The .gov doesn't want competition against regular radio so they're trying to railroad this merger.

[Superrrguy @ Dec 13th 2007 8:02PM]

I see no reason why this is taking so damn long but I'd really prefer for the merger not to happen.

The quality of tech support already sucks at Sirius and the radios kind of suck too. Stiletto doesn't let u record over wifi or u have to sit by a window to get a signal and it runs hot as hell. With no real competition they won't even try. I know u can use an mp3 player or listen to fm but I do like some of the Sirius channels and they know it's not really competition.

I wonder how much Howard Stern would have gotten if there was only one satellite provider.

[MitchSchaft @ Dec 13th 2007 8:20PM]

The whole reason for the merger is so Sirius can stay afloat. Howard got $500 million for his show for 5 years. Not $500 million to put in his pocket. He gets $80mil/yr for himself.
If the merger doesn't go through, Sirius might go under eventually. It's taking so long because the government doesn't want it to happen. They are competing with terrestrial radio. The government has a big stake in ClearChannel.

[TZK @ Dec 14th 2007 9:30AM]

You have absolutely no fucking idea what you are talking about. Actually, I wonder what planet you have been living on for the past 2 years. You are a complete bonehead.

[MitchSchaft @ Dec 14th 2007 2:14PM]

Do you care to point out what exactly I don't know?

[Robert Everland III @ Dec 13th 2007 9:03PM]

I find it funny that Congress is complaining that they think the Justice department is trying to rush the merger when the deal to reunite AT&T took less time. The main problem here is that these two companies have seen the market and they realize that they both can't afford to exist. One of them is going to go under and we'll be left with one company regardless. Ever since Howard Stern went to Sirius their numbers have skyrocketed from 600,000 to now over 7,000,000. On the other hand XM has not had that much growth. So the likely scenario is that XM will go under in the very near future without this deal. Just the fact that the NAB (National Association of Broadcasters) was/is running full page ads against this merger should be enough to show that they will not be a monopoly. I have more of a monopoly on my cable company than I do with my in car listening. When is the last time you had a choice on who your local cable company is. All I know is that if I'm pissed at my cable company my only option is to go to satellite, then after that bunny ears. In my car I have radio, HD Radio, MP3 player, cd, then sirius. It's a no brainer in regards to approving this merger. I would have though they would have had more pause with a company like AT&T who wants to charge internet companies more money depending on how many people visit them, but I guess if you give enough donations you can do anything in this country.

[xkevin @ Dec 14th 2007 1:27PM]

It all boils down to media vs. medium. With regards to delivery, yes, a combined company would technically be a "monopoly" since it would be the only service delivering radio via satellite. However, is the content exclusive to only this service? Materially, no. You can argue that exclusive agreements with Howard, Oprah, Martha, etc. are no different than a profession sports team signing an exclusive contract with a cable network. Competition between XM and Sirius is a bubble that will eventually burst without a merger. The cost of content for each company is vastly inflated because each tries to one-up the other.

The underlying idea behind the merger is to reduce expenses and pass the savings on to customers to build a bigger subscriber base. People like to argue they will only raise rates in the future, but that wouldn't be in the best interest of the company. Essentially the majority of their costs are fixed. For example, the cost to broadcast to 1 person compared to 100 people is probably equal. Why price out the 99 other people when you can earn in volume?

Bottom line, lobbyists are whats affecting this merger.

[trevorblanco @ Dec 30th 2007 10:02PM]

Why is that dog farting XM radio out it's butt?