Sirus-XM Merger Approved

This from BreitBart.com:

"The Justice Department approved Sirius Satellite Radio’s $5 billion buyout of rival XM Satellite Radio on Monday, saying the deal was unlikely to hurt competition or consumers.

The deal was approved despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry."

This is so stupid that we need the government to approve mergers. It really shows how scared of monopolies we really are.

My favorite part is the Public Choice part of this is that land-based radio industries lobbied against this merger. Lets think why would a land-based radio not want them to merge? It could be for two reasons:

  • They want the consumers to not be exploited by a monopoly
  • They wanted to keep the cost of doing business high for satellite radio so that they will not take more of their customers away.

I believe it is the second one. One the Justice Department saw this they should have accepted the deal right away. If monopolies did what "they" are afraid of, they would raise prices and lower output. This would actually benefit land-based radios because more people would substitute that in.

Of course the Justice Department, did say they allowed the merger because they don’t just compete with each other. For once, the Justice Department made a smart move.

For the long term, we should urge Congress and the President to remove restrictions on mergers. The government being in control of it only raises the cost of doing so, which raises the costs to the consumers.

Advertisements
Published in: on March 26, 2008 at 6:45 pm  Comments (2)  

The URI to TrackBack this entry is: https://pccapitalist.wordpress.com/2008/03/26/sirus-xm-merger-approved/trackback/

RSS feed for comments on this post.

2 CommentsLeave a comment

  1. who is attorney general VanHollen of Wiscionsin kidding Does he expect us to believe that he wants the FCC to block the Siri XM deal because he is concerned about “His Rural Listeners Choices” or because he is worried about big broacasting lobby influence in his state and maybe his campaign contributions VanHollen get out of the way there is no justice in a delaying this deal any further The Justice Department after taking a year said its not anitcompetitive So whats your problem
    Probably not enough crime to fight in Wiscinsin these days
    Please give us a break

  2. The attempt to block the merger was pathetic. Satellite Radio cannot raise their rates because of free radio. This is nowhere near a monopoly.

    Long live Howard Stern


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: