Justice Dept Approves XM-Sirius Merger

by Jarrett Martineau | March 24, 2008 at 01:12 pm

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The US Department of Justice has approved a $5 billion merger between XM and Sirius satellite radio. But I'm not sure that I agree with the Department of Justice's decision. I find it hard to see the benefits to consumers in providing further opportunities for consolidation in the emerging digital entertainment and new media industries.

Consolidation in so called traditional 'big media' has certainly not enabled a diversity of editorial voices and content to be represented, so it's unlikely that the satellite radio world will prove any different.

WASHINGTON — The Justice Department on Monday approved Sirius Satellite Radio Inc.'s proposed $5 billion buyout of rival XM Satellite Radio Holdings Inc., saying the deal was unlikely to hurt competition or consumers.

The deal was approved without conditions despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry.

The combination still requires approval from the Federal Communications Commission, which prohibited a merger when it granted satellite radio operating licenses in 1997.

The Justice Department, in a statement explaining its decision, said the combination of the companies won't hurt competition because the companies are not competing today. Customers must buy equipment that is exclusive to either XM or Sirius, and subscribers rarely switch providers.

"People just don't do that," said Assistant Attorney General Thomas Barnett, in a conference call with reporters.