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February 20, 2007 ::
Sirius and XM (xm2go) satellite digital radio companies
to merge?
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By: John Drake
Recently there’s been much talk and media hype
regarding the purported desire of Sirius and XM
(xm2go) satellite digital radio companies to merge.
This proposition is not without its logistical and
legal problems. For one, this would create a single
entity that provides this specific kind of service
to the consumer. In other words it would create a
monopoly of sorts. The point is; however, that what
appears to be a monopoly of sorts, may not be.
Specifically, this new would-be entity would be
competing with radio stations, and other more
conventional communication entities. The consumer
still has a choice. And perhaps the antitrust
lawyers for the would-be new entity will argue that
point, if the necessity for such becomes necessary.
Another thing to consider is that this merger may
not make sense. The communications technology and
protocols employed by Sirius and XM are, of course,
different. So, although the programming aspect of
this merger would be academic, the deployment is not
possible unless the technologies are either merged
and a new type of propagation and reception
technology is developed. And what about the current
subscribers and their investment? Both entities
report significant operating losses, and have used
this fact in their preliminary communications with
the Federal Trade Commission to defeat any antitrust
movements. How, then the merger which necessitates
significant investment into research, development
and deployment will help them, remains a conundrum. |
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