• The Wall Street Journal (subscription required), Tuesday, February 20, 2007 11:45 AM

The proposed merger of satellite-radio operators XM and Sirius -- if it survives the objections of its broadcast rivals and garners FCC approval -- will benefit consumers by eliminating duplicative programming and generating "cooler, more advanced products," says Sirius CEO Mel Karmazin.

Consumers and their advocates are likely to worry that a combined company would mean higher prices for satellite-radio service. But satellite company executives say market forces--i.e., free, over-the-air radio--will limit the possibility of higher prices.

FCC Chairman Kevin Martin released an unusually grim statement saying that the two companies will face a "high" hurdle, since the FCC rules specifically forbid such a merger. XM and Sirius may sense that the regulatory terrain will only get tougher. People close to the matter say that the companies acted because the climate is already changing with the election of a Democratic-controlled Congress. Future developments--such as the possibility of a Democratic president--could make it even harder for the proposed merger to pass muster.

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