I’m not sure where I come down on the XM/Sirius merger, but I had a hard time figuring out the Justice Department’s reasoning in deciding there was nothing anticompetitive about the proposed merger.–And not just because I passed on law school to join the ranks of the ink-stained (now ion-stained) press corps..
Part of that DOJ reasoning was to conclude that the merger could go through in part because the two companies had never complied with a pledge to produce interoperable radios.
"Because customers must acquire equipment that is specialized to the satellite radio service to which they subscribe, and which cannot receive the other provider’s signal, there has never been significant competition for customers who have already subscribed to one or the other service," Justice said.
That reminds me a little of the guy who killed his parents then threw himself on the mercy of the court because he was an orphan.
Justice also concluded that because one or the other of the satellite companies had been allowed to strike exclusive deals with car companies, they are not likely to be competing for new customers via the automotive route for "many years." Sounds more like Justice has been allowing twin monopolies to motor along rather than a competitive duopoly.
But no, says justice, the market is teaming with competitors to satellite radio anyway, which last time I looked supplied a national service in real time to cars, something iPods and terrestrial radio don’t do. Yes, I know, the technological future holds wonders yet unseen, and mobile wireless devices may soon compete with satellite radio in cars. But they don’t do so to any extent now, which is when the merger is being considered, and Justice said that even without that future competition, it couldn’t find anything wrong with the merger.
Still, I’m not sure where I come down on the merger, but I have to come down on DOJ for reasoning that seems to have surfaced out of a rabbit hole in Wonderland.