Friday, January 12, 2007

Merger Talk (Again)

Marketwatch posted an article today "XM-Sirius Merger A Bad Idea" by Thomas Kostigen, conveying his OPINION that a combination would create a monopoly and therefore, shaft the consumer with higher prices and lower quality services. In his FLAWED LOGIC, he compares satellite radio to the the rolling electricity blackouts of 2001 caused by monopolisitic practices (I thought it was deregulation), and even Enron! When one compares the sectors, one must note that electricity is a basic human need in today's society, satellite radio is not, particularly with iPod/MP3 adapters, AM/FM and HD radio vying for the dashboard.

Thomas references www.siriusbackstage.com stating that "It is a tough sell, and in 2002 the FCC blocked a merger between Dish Network and DirecTV due to the lack of competition outweighing any benefits." I think that 2002 was an entirely different climate for mergers. There are mergers all over the place now. If Dish and DirecTV were to try to merge, in 2007, the deal would have a better chance of being approved, especially with recently introduced competition, including TV content delivered via internet and telephone.

In summary, there are those in high places who think a merger will be approved, and those who don't. Surely, everybody is entitled to their opionions, but whatever the FCC outcome, you don't know until you try.

Labels: merger, sirius, xm