Sirius & XM See Result From FCC Letter… Is Approval Any Closer? (SIRI, XMSR)

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Shares of both Sirius Satellite radio (NASDAQ: SIRI) and XM Satellite Radio (NASDAQ: XMSR) are trading higher in pre-market trading today.  You could say it is the market, but it could also be tied to a letter that went out the FCC.  House Commerce Chairman Dingell (D-MI) and Telecommunications Subcommittee Chairman Markey (D-MA) sent a letter to FCC Chairman Martin calling for an "Open Device" condition should the FCC approve the merger.

The letter sent to Chairman Martin also calls for an adherence to "at least" the pricing structure and pricing locks that have been already shown.

The stated goal of the letter is consumer protection.

Interestingly enough, and something that none of the "consumer defenders" have ever said is that if this merger is blocked, then prices for raw purchases and new monthly subscription prices will go up sharply.  The companies won’t be able to lift the contracts that have in place with auto makers, but for any new subscribers the cost of being able to listen to unregulated commentary will go up. 

These companies have been in business for years and are still running at unprofitable levels.  If "protecting consumers and their pocketbook" is the goal, then the FCC should capitulate and approve this deal.

Jon C. Ogg
May 2, 2008