Satellite merger...are you Sirius?

For the past month or so, rumors have been circulating about a possible merger between the two giants of satellite radio: XM and Sirius. If these two companies were to become one entity, it would for all intents and purposes provide them with a monopoly on the satellite radio broadcast market. However, would such a monopoly be such a big deal? Fox News states that "...as mobile technology in the United States advances, XM and Sirius are hoping the FCC will consider satellite radio as part of the broader industry of delivering music and other content through mobile devices, such as cell phones...".

In an effort to persuade the FCC and the Department of Justice to approve the merge, the main tactic used by these companies will be to minimize the role of satellite radio in the grand scheme of things. In their summary of "what's in the major US newspapers", Slate Magazine portrays this tactic in greater detail. "Although there are obviously concerns that letting the two unite would create a monopoly, the companies will argue they face plenty of competition for the public's ears with MP3 players, Internet radio, and mobile phones."

The next question that must be asked is whether the FCC is going to go for it. On the one hand, there is "On The Media". One of their stories this week would seem to suggest that despite some of the obvious obstacles in their path, Sirius and XM will be able to pull it off. On the other hand, FCC Chairman Kevin Martin has been heard to suggest the satellite radio will be treated in the same manner as satellite television and that approval of the merger is not likely.

What does this mean to us? There are two possible outcomes in this scenario. If the merger passes, it could mean a changing of the face of satellite radio and satellite media in general, as well as a change in media legislation across the board. Another possibility is that the FCC will reject the merger. If the FCC rejects the merger outright, then these two companies will continue to lose money competing with iPod and free radio at such a rate that they will become bankrupt. Regardless of whether you like "old news", "new news" or "no news", this merger could have a giant impact on how you get your music.
For further reading on this topic, check out Business Week.