Former U.S. Attorney General Dick Thornburgh wrote an opinion piece in the Washington Times today, voicing his concern over the Sirius-XM merger.
Most folks, by now, know that I’m on the pro-merger camp, but Thornburgh’s article is persuasive one nonetheless (hey, credit given where credit is due). It’s also significant that he’s a former Attorney General (’88 to ‘91), although it also should be noted that he’s a consultant to some of the most well-connected college kids ever: C3SR.
What’s so persuasive about his article? This:
“This case is not even a close call under the antitrust laws — it’s
plainly a merger to monopoly. Moreover, it is an important case with
great precedential value. Indeed, the Justice Department decision on
the Sirius/XM merger is the litmus test for everything that follows,
including Microsoft/Yahoo. If this case does not provoke antitrust
enforcement from the department, no forthcoming merger proposal could
be ruled impossible.”
And that right there sums up what the underlying issue is with this merger, and why it is most likely in eternal limbo.
The problem isn’t whether satellite radio is competing with terrestrial. Of course it is. And of course, they’re competing with the iPod. And of course they’re competing with Internet Radio and the entire slew of current and potential rivals. That’s the new world we live in. That’s the reality. The lines of media and technology are - at a shockingly rapid pace - completely blurring.
But the government isn’t setup to handle this change in media (or in business for that matter).
The problem isn’t defining competition, the problem is precedence. If the DOJ approves this merger without a thought, they effectively are saying that the method of distribution doesn’t matter anymore. And that opens up a big can of worms for future transactions.
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