It was predictable that various parties would be quick to jump into the party following the decision by the Department of Justice to approve the merger of Sirius and XM without restriction. With all eyes on the FCC, and the FCC holding the only chance to see concessions in the case, many are now once again presenting their wish list to the agency as if Kevin Martin was Santa Clause.
In the news toady, it was revealed that Attorney Generals from 11 states have decided that they are disappointed that the Department of Justice arrived at their approval without placing any restrictions on the transaction. The reaction of these states to attorneys has some irony. On one hand, the Department of Justice weighed out the evidence for over a year. They poured through millions of pages of documents and reviewed pages upon pages of data. They looked at the merger from various perspectives, and in the end concluded that from an anti trust standpoint that the merger could pass. On the other hand, we have the Attorney Generals for a handful of states arriving at a conclusion without having reviewed all of the documentation, nor all of the data. IN fact, it would almost seem as if they have never reviewed the case in general.
The various states Attorney Generals seek:
1. Interoperable receivers available to consumers.
This issue has already been addressed, and was addressed early in the process. Sirius and XM have already promised A-La-Carte radios as part of the merger.
2. A-La-Carte Packages to consumers
This is yet another aspect of the merger that has been on the table since the beginning. Sirius and XM have already published proposed A-La-Carte packages complete with prices.
3. Divert (surrender) Spectrum.
This option has also been presented during the process, albeit, not by Sirius and XM. It is the amount of spectrum that is the main question, whether it is dedicated to certain programming, or whether their is a spectrum surrender.
In a quote attributed to the Attorney's General, they stated, "The combination of these companies will result in a single corporation controlling access to all nationally available satellite radio."
It would appear that the Attorney Generals from these states missed the main thrust of what the Department of Justice concluded. The method of delivery is not the main factor at play. It is the fact that content can be delivered from many sources, and in point of fact that wireless services carry the ability to also broadcast on a national basis.
As the FCC ponders their decision, it is a certainty that various parties will continue to try to influence the decision. While an FCC approval is not cast in stone, the FCC has not yet countered a ruling by the DOJ. Speculation abounds. Some that felt that the merger had little chance of DOJ approval cited that the past actions of the agency dictated that a rejection was in the cards. In this case, not only were they proven wrong, but the lack of stipulations by the DOJ ultimately demonstrated that the agency indeed considers the trend of the marketplace becoming more varied.
In the end, FCC approval is, in my opinion, a virtual certainty. Yes, there will be stipulations attached. However, given the tenor of the DOJ decision, the stipulations may not be as bad as some think. A-La-Carte is a given. Price freezes for a period of time are a given. Channels dedicated to informational and minority programming is a virtual given. Some of the other proposed restrictions may be a very hard sell. At this point, investors may need to wait at least a few more weeks, but the time is indeed drawing near.
Position - Long Sirius, Long XM