XM and Sirius Just Need Ok from FCC to Complete Merger

Implications: The Department of Justice has approved the XM-Sirius merger of the two satellite radio providers. Approval from the Federal Communications Commission is the only remaining obstacle. What does this mean for radio?

Analysis: The DOJ has spoken, and after a year of scrutiny, XM and Sirius are one step away from their long-desired merger.  The FCC must approve, and the current Commission with a Republican majority will approve the merger.

The merger went through a roller coaster ride, with some predicting the long time frame meant it would never happen, while others speaking the opposite.  It is going to happen, and now we know why the DOJ said ok.

The DOJ did not treat satellite radio as a separate market, but placed the service in the market for radio and audio services.  Citing the expected explosion in broadband wireless Internet services, the DOJ felt there would be no negative impact on consumers or competition by allowing the merger.

This is a blow to the radio industry, which spent millions in legal fees to try and block the merger.  This will be tough pill for NAB CEO David Rehr to swallow.  Many radio groups fought the merger as well.  How the DOJ defined the market is without doubt the biggest implication for this merger.  The radio industry will likely use this to argue for further relaxation of local radio ownership requirements.

The consumer advocates will be angry over this merger as well, citing this as another example of governmental disregard for consumers.  That's a tough argument over subscription-based services.

But exactly how consumers will be affected remains to be seen.  We will go from two services down to one, and how that affects channel lineups and popular programs like Howard Stern on Sirius and Oprah on XM must be sorted out.  For the record, I am an XM subscriber.  I just had a student, who is a Sirius subscriber, ask me "what does this mean for our service?"  I told her it was simply too early to tell.