Out of Tune With Consumers

OUT OF TUNE WITH CONSUMERS
[Commentary] The latest example of a government bailout of a troubled industry has nothing to do with Bear Stearns. It is, instead, the Justice Department's decision to give the green light to the merger of the satellite radio companies XM and Sirius. For the past several years, these two companies have been competing so hard for talent, distribution channels and customers that neither has been able to turn a profit, and probably wouldn't have for years. Consumers have been the big winners, with great programming at affordable prices. All that is about to change now that the Bush administration has concluded that we'll all be better off if these heretofore fierce rivals are allowed to stop competing and concentrate instead on reducing costs, paring down their combined offerings and finally delivering profit to their shareholders. As precedent, it could be used to justify the merger of ABC with both CBS and NBC, Clear Channel with the Bonneville radio network or even Coke with Pepsi. The message it sends to business executives is clear: If you find yourself in a tough competitive environment, the best strategy is not to find a way to offer better products and services at a better price, but rather to call your investment banker and negotiate a truce with your biggest rival.
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032503269.html
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