NO JUSTICE AT THE JUSTICE DEPARTMENT

High above Park Place and Boardwalk, there is another Monopoly-thanks to the Justice Department.

XM and Sirius Satellite radio have finally gotten the ruling they have sought (and no doubt paid for)—a decision that says that the only two companies providing satellite radio service may combine without creating a monopoly…..HUH?

OK, full disclosure. I’m a radio guy….make that “terrestrial” radio guy. Before the advent of satellite radio, all radio was terrestrial, so we never used the word. Now, we have to. Readers may assume that fear of competition or sour grapes account for my shock and dismay. Not so.

I actually like the idea of satellite radio. I have never thought it made for a promising business model, since “regular” radio makes its money from local advertisers. Satellite radio is still losing hundreds of millions of dollars each year. Local radio actually makes money and it’s easy to see why. We talk to and entertain local communities-and make the businesses in those areas busier. That’s the whole point. Satellite radio was never and will never be a threat to that. Radio has plenty of challenges, but it is healthy as over 95% of Americans still listen each week, a level of consumption unmatched in any media. Although I don’t subscribe to either XM or Sirius, I probably would if I had the time to listen. I spend so much time with good old-fashioned “free” radio, why should I fork over $15 bucks or more each month?

The point is not whether satellite radio is good or bad, profitable or leaking money like a sieve(which it is). The point is that the Justice Department has totally abdicated its responsibility in deciding—with a straight face—that the only two companies in an industry merging into one is somehow not a monopoly.

The argument that XM and Sirius so successfully dangled was one that all future mergers should take note of utilizing. It goes like this:

“Satellite radio is not an industry unto itself—it is in the ‘audio entertainment’ business. As such, we compete with radio stations, iPods, CD players and such.”

Did the Justice Department consider that with zero competition between providers-since there is now only ONE..that consumers will take it in the shorts? Wasn’t that the reason for the Sherman Antitrust Act in the first place? When fees go up and choice goes down, consumers will be justifiably outraged. Frankly, if two becoming one is not a monopoly, how can the Justice Department possibly deny any such petition?


What could happen next? What if Ford, GM, Honda, Chrysler and Toyota all decide to form one HUGE company? Why not? To the Justice Department, all they have to do is redefine the competitive landscape. After all, these companies are not in the automobile business……no, they’re in the transportation business. Why, they compete against trains, planes, motorcycles, skateboards and bicycles.

They’re not a monopoly, because people could just saddle up a horse—or walk. Someone at the Justice Department needs a checkup from the neck up.

I’ll just go back to what I do—working for 94.9 WHOM, serving Northern New England with music, news and public service….it’s all there---and all that without a bill at the end of the month!