Now Hear This

An open and frank discussion of media and telecommunications issues - from the consumer point of view.

Like lots of folks, we aren't yet sure what to think about the bombshell announcement by satellite radio competitors XM and Sirius that they want to merge.


At first blush, it's hard to imagine how such a business marriage would benefit average consumers -- the primary yardstick this blog uses to measure a big deal like this.


Consumers who want satellite radio now have two choices, XM and Sirius. That is a far cry from a fully-functioning competitve marketplace like there is for, say, washing machines, where consumers have dozens of brands and models to choose from.


Still, two competitors are almost always better for consumers than a monopoly. Sirius is a lot less likely to raise its prices if it thinks it will bleed customers to XM, and vice versa. Likewise, Sirius and XM are a lot more likely to offer better programming if they are competing with each other for customers.


XM and Sirius are expected to face an uphill fight in convincing government regulators to approve the deal, and that is as it should be. The Federal Communications Commission included language specifically prohibiting XM and Sirius from merging when it originally granted them permission to offer satellite radio services several years ago.


FCC Chairman Kevin Martin struck the correct tone in a statement he made in response to the merger announcement on Monday.


"The companies would need to demonstrate that consumers would clearly be better off with both more choice and affordable prices," Martin said in a statement.


We hope that Martin and the other members of the FCC will stick with that litmus test when the lobbyists from XM and Sirius come calling. We also hope that Congess will step in immediately if the FCC should waiver in its commitment to protecting consumers in any deal between XM and Sirius.

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