The XM/Sirius merger: What's next?

The Justice Department finally gave its OK to the proposed merger of satellite radio providers XM and Sirius, but the plan still must go before the FCC. Also: If the merger goes through, what happens to your XM and/or Sirius receiver?

In its approval of Sirius' plan to buy out XM (for a cool $5 billion), the DOJ said the merger wouldn't create a two-headed, anti-competitive satellite monster.

Why not? The Department of Justice laid out a couple of key reasons. The first is (to my mind, at least) a little shaky: That XM and Sirius require different types of receivers, and that since consumers rarely switch providers once they've bought their equipment, the companies weren't really competing in the first place.

Well, maybe so, but the same could be said of satellite TV, and the last time I checked, DirecTV and Dish Network (which require separate satellite dishes and set-top boxes) are competing pretty fiercely.

A more compelling reason cited by the DOJ is that XM and Sirius are facing much stiffer competition in the form of traditional—and free—terrestrial radio, along with HD radio stations, iPods, Internet radio, cell phones with music players, and the like. (For example, check out Chris' post about a new Bluetooth-enabled FM transmitter that'll "sling" music from a cell phone to your car stereo.)

That sounds about right to me (and it's part of the reason I've never sprung for a satellite radio receiver myself), and it lends weight to XM's and Sirius' promises of reasonably priced, a la carte subscription options (more on that in a minute) when, and if, the merger wins final approval.

Speaking of which, XM and Sirius aren't out of the woods yet. The FCC has to give the merger a thumbs-up, and the deal still faces heavy criticism from consumer groups, such as the Consumers Union (which publishes Consumer Reports), as well as the National Association of Broadcasters.

How long will it take for the FCC to render its decision? Well, the Justice Department took its own sweet time to mull the deal—more than a year—so I'm guessing it could be months before we hear any news.

So, if the merger wins final government approval, what happens then? Will your XM/Sirius receiver suddenly get twice the number of channels? Well, sort of.

One of the potentially cool results of the merger could be the ability to pick and choose your XM and Sirius stations (or at least, that's how the two companies sold their merger plans to federal regulators).

The Register has a breakdown of how it might all work. In a nutshell, you'd pay $7 a month for 50 a la carte XM/Sirius channels, or $15 a month for 100 channels.

The catch is that you'd need to buy a "next generation," dual-mode XM/Sirius receiver (which, naturally, wouldn't arrive until after the merger's approved) to get the a la carte options.

If you want to keep your old XM or Sirius receiver, you could choose from three options: $17 a month for either "XM Everything and Select Sirius" ("select" meaning "a few" Sirius channels) or "Everything Sirius & Select XM"; another option might be $13/month for "XM Everything" (about 170 channels).

Well, that's the proposal, anyway. The FCC could impose its own conditions and pricing requirements on XM and Sirius, which would throw all these plans into flux.

So, what do you think? Excited that the merger is a step closer to reality? Worried about a monopoly? Or are you sticking with good, old-fashioned FM?

Related:
Justice Dept. approves XM-Sirius merger [Yahoo! News]