Monday, July 23, 2007
Interesting move by the two companies to offer a lower price option as a tactic to demonstrate to the FCC why their merger should be approved. While pricing is certainly a factor that the FCC would consider, it is not the straw that will determine the final decision. Clearly, Sirius and XM should remind the FCC of what they have already allowed to occur across the cable industry and that this impact resulting from a merger on the market is far less of an issue than cable. A cable/hi-speed/phone customer has far fewer choices open to them. You can get your local cable provider, Dish or Direct TV, AT&T or Verizon. If Sirius and XM merge, the choices for audio entertainment still allows for dozens of free radio stations, iPod connections, cellular/wireless connections, and perhaps soon, Direct TV for the car. Sirius and XM mainly serve the mobile market, and to be more specific, your car. While they also have mobile devices to compete with boomboxes, a pc connected wirelessly to a streaming radio station provides an equal variety of content. Technology is enabling a low cost of entry to the marketplace, the FCC should alllow the merger to take place and let the free market economy to work.
Posted by Andy Hunn