Common sense prevailed at the Justice Department on Monday when officials rejected the notion that satellite radio is a vital consumer entitlement that must be regulated like electricity or water utilities.
Instead, Justice said the two existing satellite radio providers could move forward with a proposed merger.
“The likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband Internet devices, made it even more unlikely that the transaction would harm consumers in the longer term,” the Justice Department said.
The usual suspects were up in arms, of course. Allowing Sirius to absorb XM is somehow a threat to the future well-being of the republic, self-styled “consumer advocates” complain.
“If this is what our competition cops do, we might as well close shop and save taxpayers a few hundred million dollars because they’re not doing their jobs,” said Gene Kimmelman, the Washington lobbyist for Consumers Union, nonprofit publisher of Consumer Reports magazine.
This is pure poppycock.
How, precisely, will this merger hurt anybody other than employees who may lose their jobs? Satellite radio is a luxury item. Given that neither company is making any money at the moment, a merger is a natural progression of a nascent marketplace. Shareholders had no objection. Would Mr. Kimmelman prefer that both companies dry up and go away? How would that help consumers?
Unfortunately, the Justice Department isn’t the only federal agency in the mix, here. The merger will now go the FCC, and at least one powerful Democrat is pressuring regulators to nix the deal.
“We are particularly disturbed by this decision, given the Justice Department’s record in recent years of failing to oppose numerous mergers which reduced competition in key industries, resulting in the Justice Department not bringing a single contested merger case in nearly four years,” said Sen. Herb Kohl, D-Wis., who chairs a subcommittee on antitrust. He added that the merger would create a satellite radio monopoly.
Oh, the humanity! What might this huge, evil empire do? Force subscribers to listen to 150 channels of ’70s soft rock?
The Justice Department did the right thing on Monday. Now the FCC should follow suit.