XM and Sirius Still Think Their Merger Will Be Approved

Yesterday at the Bear Sterns Media Conference, Sirius CEO Mel Karmazin told the audience that he still believed the merger would pass regulatory scrutiny (both the Department of Justice and the FCC have to approve the merger before the companies can proceed with it).

Although I was initially opposed to this merger, figuring that having a single satellite radio company in the US would give it too much pricing power and no motivation to compete on either content or service. Although I still have concerns about the competitive issues surrounding this merger, over time, I have become less concerned about it. Maybe it’s just the extremely long amount of time between when the merger was announced (in early 2007), and maybe it’s the fact that the companies have revealed proposals for their post-merger service offerings. At least initially, the monthly price will remain the same ($12.95) for each service, but some Sirius content will be added to the XM lineup, and some XM content will be added to the Sirius lineup. There is also likely to be a premium service level that gives listeners all Sirius and all XM channels for a higher price (though less than the cost of a double subscription today).

I’m hopeful that if the merger is allowed to proceed, that customer service will not be affected. After my experience this past week trying to activate an additional radio (a Pioneer Inno), which involved three failed website attempts and three phone calls to customer service before I was fortunate to get a representative who knew what she was talking about, and she was able to resolve my issues, I really hope for XM’s sake that customer service doesn’t degrade further from its current level.

While it’s impossible to tell whether Mr. Karmazin is just trying to ratchet up pressure on regulators to complete their review of the merger (which was originally supposed to close by the end of 2007) or he actually knows something about the status of their application, it stands to reason that a decision probably will come down soon (after all, the government can’t just leave two large companies hanging in uncertainty forever).