More radio mergers, and the US's Department Of Justice has given the go ahead for the merger of America's two satellite radio networks Sirius and XM, which will create one big satellite radio service in the USA.
As previously reported, satellite radio is quite a big deal in the States, and there are two rival networks - Sirius and XM - both offering rival subscription based pay-to-listen services. The two companies have been trying to merge since February 2007. The merger has proved controversial because some argue it will give a combined Sirius XM a monopoly in the satellite radio sector, which, opponents argue, will not be fair to consumers. But Sirius and XM chiefs argue that they not only compete with each other but with conventional terrestrial radio services and a plethora of internet radio and music services, so while they will dominate the satellite radio sector they will still be operating in a competitive market.
Such is the controversy around the merger proposals, the two bodies considering the merger, the Department Of Justice and US media regulator the FCC, have both been in consideration for over a year now. The DoJ yesterday said it had decided that Sirius and XM were right, they are operating in the wider content provision industry, and therefore the merger should go ahead. It said in a statement: "The likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband internet devices, made it even more unlikely that the transaction would harm consumers in the longer term. Accordingly, the division has closed its investigation of the proposed merger".
Normally the FCC would take the DoJ's ruling on a matter like this as a strong lead and reach the same conclusion, but on this one opposition is so strong among some of its key constituencies - including the traditional radio industry and those political types who take an interest in media issues - that the FCC rubber stamping the DoJ's conclusion on the merger is by no means a foregone conclusion. That said, while some in the FCC were very resistant to the merger proposals when they were first touted twelve months ago, they have since conceded that a merger isn't impossible, meaning some analysts now reckon the media regulator will also give the deal the green light though, unlike the DoJ, are expected to do so with certain conditions in place in a bid to placate those who oppose the deal.
Neither the FCC nor Sirius nor XM have commented on the DoJ ruling on the matter, though shares in both satellite radio firms were up yesterday.