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Of course, the big news today (besides my going-going back-back to cali-cali tonight) was the reaction to the Justice Department's antitrust green light on the XM-Sirius merger.

On the surface, this could be cited as another example of runaway government capitulation towards big business interests and media consolidation, like the FCC's recent revision of the newspaper-TV cross-ownership rules, which significantly tipped the scales towards less consumer choice and more commoditization of media.

One could easily say this about XM-Sirius. In fact, Sen. Byron Dorgan (D-ND) issued a rather...pointed statement which highlights his anger at "this administration's blatant disregard for the public interest" in the media ownership realm."

Dorgan went on to further criticize (rightly) the trend of consolidation in media, and brings up the original conditions of the licenses the FCC issued more than ten years ago:

"There seems to be no limit to the mergers this administration will approve. These two companies were issued licenses a decade ago to provide competing national satellite radio service. Their license approval included a clause that prohibits them from merging into one company...Now the Justice Department has decided the contract they signed can't stand in the way of consolidation. That doesn't make any sense to me."

Well, Senator, it should make sense if you realize that the DOJ's antitrust division reviews tons of mergers and approves or denies them based on their potential to harm the market and not the conditions of their FCC license terms. That part is up to the FCC, which, because it has the combined powers of all three branches of government, can do whatever it pleases, until a court tells it to stop.

When you said that the licenses were issued a decade ago, did you notice that the licenses were issued a decade ago? I realize that's a long time, even longer than a Senator's term in office, but did it ever occur to you that the competitive landscape might have changed, and that there might not be much of a competitive market for two companies that offer pretty much the same product and have hugely expensive operating costs, since you know, keeping satellites in space takes lots of money. Remember Iridium, the Sat-Phone company that the government had to be bailed out to keep their network running so government agencies could use them?

You might also remember when EchoStar and DirecTV tried to merge? It was denied, and those two companies are still lobbing pebbles at Comcast, when (hindsight is 20/20) a combined DBS provider could be offering twice the HD channels at less cost than cable. Instead, they're still competing with each other at pretty much the same price, but not causing any shake-ups in the Cable market. Too bad that merger was denied, huh? Great for Cable, bad for us.

It's pretty clear-cut, Senator. We don't need two Satellite radio companies. We do need more choices in media, though. How about you stick to focusing on why so many terrestrial radio stations have the same owner, serve up the same canned music and news (ever hear of Jack FM?) and well, pretty much suck? At least Satellite Radio plays new music and pushes the envelope. I can hear Bellman Barker or Bob Mould on XM. I might catch the latter on NPR once every few years. Commercial radio? No way. They're too busy playing the latest crap that people won't even pay for.

On the other hand, Rep. Rick Boucher (D-VA) has one helluva clue. From CongressDaily's Andrew Noyes:

Rep. Rick Boucher, D-Va., said he was pleased that DOJ determined the merger does not pose significant competition concerns. He believes the new company will bring numerous benefits to consumers, including the elimination of duplicative programming, which will free up spectrum.

Boucher also lauded the companies' intention to offer multiple post-merger subscription packages. "This unprecedented approach will provide subscribers with more choices and lower prices and will pave the way for a form of content acquisition based on the individual programming preferences of listeners," he said.

 

So, a company that will offer better programming, with more choices at lower prices. Very anticompetitive...if you're Clear Channel.

Tech Daily Dose's Andrew Noyes points out that it's been a while since they announced the "merger of equals." We've had multiple hearings on both the House and Senate sides of the Capitol, with mixed signals from both chambers, as well as the FCC. Still, Noyes, along with his sources doubt it will be approved:

For months, merger-watchers have been inclined to believe that the combination, albeit delayed, would get the government's blessing but now at least one analyst isn't as hopeful. The merger "now appear less likely," Pacific Crest analyst Erik Olbeter said in a research note.

"Prospects for the merger have become increasingly cloudy," he said, noting that the waiting game suggests Justice and the FCC are having trouble justifying the deal. 

Now, the Justice Department has a clear statutory responsibility to review mergers like this. The FCC, on the other hand, does so under the auspices of approving the transfer of licenses. While DoJ has clear guidelines they follow, aka antitrust law, the FCC uses a vague "public interest" standard taken from the Communications Act of 1934. They even have had a "merger review team" that reviews certain mergers, and approves them subject to "voluntary" conditions, aka blackmail.