Here's a twist to consider... What do you think Mel will do if the FCC allows the merger under the condition that either SIRI or XM will have to give up its RF spectrum? This represents an attractive and plausible scenario for the FCC to consider. They can grant the merger without any need to change the licensing that currently prohibits the two satellite providers from merging. They would give XM (for example) a certain amount of time to find a buyer for the "abandoned" spectrum before the merger could be completed. The problem with creating a monopoly vanishes since a second provider and license will eventually fill the void.
While this is an elegant solution for the FCC and DOJ, I can't see much advantage for either XM or SIRI. However, I doubt that the FCC or DOJ cares much about that. They are all about serving the public interest, including diversity and choice for the consumer. A government sanctioned monopoly just doesn't fit their "style".
It will be interesting to see what develops at the FCC with regard to this merger, but you can bet that it will be creative and not what most people expect. Could some form of the scenario I've presented here become reality? Than, back to my original question, what do you think Mel will do, and what do you think the future of the merged company will be?
Will this cause Mel to reconsider the merger? Will the government tell Mel that you can't have your cake and eat it too?
A proposed terrestrial radio competitor to XM and Sirius.
The Spanish-language broadcaster says if the FCC does allow the merger to go forward, it should also force XM and Sirius to "relinquish their spectrum" to allow a new competitor into the space. Entravision offers to lead a consortium of terrestrial operators. The proposal calls for XM and Sirius to be required to sell their satellites and other facilities to the terrestrial consortium.
Great question...and one I would like to explore myself; Sometimes feel that such rational thought doesn't have a place on this board; But, getting to your point, I must say that I have pondered the very question you ask; As a loyal fan-subscriber of Sirius...I was very pleased to learn of the merger..., but and however, red-flags did go off, b/c of the FACT that the Federal Government did issue ONLY TWO licenses in the SDAR spectrum! Yes, satellite-radio competes with everything Mel&Co. has mentioned, that is a fact; But I think he is being naieve or fascitious when he says that "if you believe that satellite radio only competes against 'the other satellite-radio provider'...then the merger will not be approved, but if you believe satellite-radio competes against a host of other entertainment mediums, then you will agree that this merger gets done"! That's naieve or fascitious, b/c you could argue the same point with regard to Direct TV and Dish, when they saught merger approval; It came-down to the licensing issue! Pure and simple, imo!
But, the silver-lining is that you can ammend the licensing arrangment, imo; You've got to be able to allow a potential competitor to "launch-service" in this SDAR field; How can you grant sole authority to broadcast in SDAR to one company? That's against the very nature of a "free-and-competative market"! So, I think you are on to something, when you talk about having to 'give-up spectrum'...or ammend your broadcasting powers!
So, if the "deal-gets-done", but not under the original 'mega-spectrum' vision that both companies had in mind, then what? I still say it's a 'win-win' situation for everyone involved; You preserve the compatitive landscape, by allowing 'another player' to give-it-a-go, yet you also allow the consumer to be best served by merging two great programming line-ups....with a la carte provisions!
I think some form of the above is how it will go down; I'm very skeptical of a full-blown-no-provisions-merger...and I see some willingness to entertain, even approve, some sort of merger-like-scenario by the DOJ and FCC!
If you are asking from an investor's perspective, my advice is to slowly build a position...with the idea both Co.'s stock price will rise, as Dec. approaches....put-in a stop somewhere above your entry....and pray like hell that the ball rolls!
That's my strategy, anyhow! I support a merger btw...but I wouldn't want another Co. to be locked-out of a desire to enter this competative landscape!
PS: No spell-check or proof-read!