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XM-Sirius Satellite Radio Merger Approved By Department of Justice

CNN.com reports: The U.S. Justice Department approved the merger between satellite radio companies Sirius and XM Monday, more than a year after the two companies first announced their deal.

But for fans of Howard Stern, Opie & Anthony and other Sirius and XM on-air personalities, there are still many questions about how much a combined Sirius-XM service will cost and what programs they’ll be able to hear. Plus, Sirius and XM face one more regulatory hurdle before the deal can officially be completed.

Despite cries from some politicians and traditional broadcast companies calling the pending deal harmful to consumers, the Department of Justice determined that an XM-Sirius merger was not anti-competitive. The Justice Department argued that other media companies such as Clear Channel , CBS, or even Apple with its iTunes software and iPod music player served as alternate options for music and media customers.

Many other considerations factored into the Justice Department’s decision, including data that suggested the companies were not even competitive with one another. “Our data confirms that there was very little switching between companies after a person subscribes to a particular service,” said Assistant Attorney General Thomas Barnett during a conference call with reporters Monday afternoon.

Barnett suggested that since subscribers need to buy the receiver, which is not interoperable with other services, it is too expensive for most to switch. In addition, many satellite radio users don’t have much choice of which service to subscribe to since they simply wind up with the service that is preinstalled in the new cars they buy. Sirius has exclusive deals with Chrysler and Ford for example, while XM has agreements with GM, Honda and Toyota. The Justice Department also said mobile phones with Internet connections will soon be able to offer similar services to satellite radio and will offer more competition in the market.

The Department of Justice did not place any conditions on the merger. “Since we determined that there was no competition between the companies, we did not need to set any conditions as such,” said Barnett.

But the Federal Communications Commission must also approve the deal. The FCC has yet to make a decision on the merger and it could decide to place conditions on the deal. A spokesperson for the FCC was not immediately available for comment.

source: smnnews

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