Merge Or Purge?
Wednesday, June 13th, 2007The scene is 1997. The FCC approves the creation of two national satellite radio services. In their approval, the FCC specifically prohibits the two systems from ever merging. Nothing has changed in the past ten years: there is no competitor in the satellite radio market, and local radio stations do not have a nationwide reach. Moreover, the FCC also made a condition of the original approval that XM and Sirius were required to deliver designs for radios which would pick up both services. Nothing like that has ever been made commercially available.
There are two different technologies, two different company philosophies. A merger would not allow the consumer to have access to more channels of programming without buying another radio. The channel frequencies cannot be expanded without losing audio quality. So there is absolutely no benefit to the consumer for a merger between XM and Sirius.
Both companies went into debt to launch their satellites. They’ve paid talent up to $100 million per year. So who is left holding the bag if XM and Sirius merge, and there is no
competition? All you have to do is look in the mirror.
–Thanks for reading