DirecTV and Dish Merger

Posted on August 6, 2008

Back several years ago, the two satellite TV companies, DirecTV and DishNetwork tried to work up a merger. Of course, the FCC stepped in and said no, it’s not going to happen.

Well, rumors are that the two companies would like to try it again, except this time they think they have fuel to light the fire. XM and Sirius were allowed to merge recently, creating a single company out of the two satellite radio providers. So they can ask the Feds, ‘what’s the difference?’ Two satellite radio providers with no other satellite competition, or two satellite tv providers with no other satellite competition? Same difference, right?

Well, we don’t know whether the Feds will simply draw upon their reasons for refusal the last time and say nothing has changed or give this an honest appraisal. Looks like the companies have a pretty valid point…what is the real difference? The radio companies have plenty of competition still out there, just not from satellite feeds. The tv companies are the same way, plenty of competition from cable, just none from satellite.

They might as well merge, the consumer will probably be no worse off. It’s kind of like the gas pumps. All the stations in town seem to change their prices just minutes apart, collusion some say. TV rates don’t get too far apart as the firms seem to vie for dominance over ‘features’ rather than price, so they sustain each other by not getting into pricing wars.

Let ‘em merge. It’s usually the case that if a company gets too heavy-handed with its pricing scheme, someone else will come along and take the customers away.