SIRIUS/XM

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The Justice Department approved the merger of satellite radio rivals Sirius and XM Radio yesterday, more than a year after the two originally announced the proposed union. FCC approval remains the last hurdle that the deal must clear before finally becoming official. Many believe that the FCC is unlikely to dispute the Justice Department ruling. In the wake of the initial decision, though, opinions on the merger remain starkly divided.


The Justice Department approved the merger of satellite radio rivals Sirius and XM Radio yesterday, more than a year after the two originally announced the proposed union. FCC approval remains the last hurdle that the deal must clear before finally becoming official. Many believe that the FCC is unlikely to dispute the Justice Department ruling. In the wake of the initial decision, though, opinions on the merger remain starkly divided.

Consumer advocacy group The Consumers Union has decried the results of the year-long Justice Department inquiry, calling it “plainly absurd.” “I would defy anyone to find a situation where consumers have benefited from monopolies in the past,” spokesman Bob Williams commented. Meanwhile, the National Association of Broadcasters, a group that represents free-radio companies across the country, expressed its “astonishment” that “the Justice Department would propose granting a monopoly to two companies that systematically broke FCC rules for more than a decade.”

The Justice Department, in a statement released with its decision, cited “the likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband Internet devices” as evidence that the merger would not smother competition. Included in its definition of competition are many non-satellite alternatives to XM or Sirius, such as MP3 players—which have become more and more available for use in the car in recent years—and conventional AM/FM radio.

Both Sirius, with 8.3 million subscribers, and XM, with 9 million, operate at a loss, despite widespread customer satisfaction. Justice Department officials hope that the deal would help bring the two companies back into the black and, in so doing, help save an important, if troubled, media form.

A decision from the FCC is expected within the month.

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