Reporters Don Jeffrey and James Rowley announced at around 5 PM today that Sirius Satellite Radio Inc.’s proposed $4.59 billion acquisition of XM Satellite Radio Holdings Inc. won U.S. antitrust clearance to create a single U.S. satellite-radio provider. Shares of both companies surged.

The deal was opposed by the National Association of Broadcasters, the trade group that represents free radio stations and waged a lobbying campaign in Congress and at the FCC. The broadcasters’ spokesman, Dennis Wharton, said in a statement today the group is “astonished” by the Justice Department’s action “granting a monopoly” to the companies.

The combined company will eliminate programming that is duplicative, including some music channels.

Full article can be found here.

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net

So to recap

• There is only 1 company that controls all of satellite radio, at least it’s not the Dolan’s.
  

• The broadcasters are saying astonished by the Justice Department’s action granting a monopoly to the companies.

• The combined company will eliminate programming that is duplicative, including some music channels.

As with many well written NY Times articles there is always someone who has a counterpoint to what the article says. Michael Arrington of the website TechCrunch.com offers his. There are also over 150 comments to what Arrington has to say include his rebuttals to several of the points that some of the commenters made.

Here is part of what he said, you can find the entire article here:

Bragg does attempt to argue his case, primarily by (1) saying that social networks are as much to blame for declining music sales as the people who are downloading songs in violation of copyrights, and (2) saying that arguments that social networks are doing musicians a favor by marketing their music are “disingenuous.”

Both arguments have holes in them so large you could drive a BitTorrent stream through them.

Social networks have absolutely nothing to do with the decline in music sales. The fact that recorded music can be reproduced at a zero marginal cost is why music sales are declining. You can hate that or love that, but it’s simple economics that drives it.

And in fact the argument that social networks actually provide free marketing to artists is not disingenuous. In fact, it’s quite correct. Bragg notes that radio stations pay royalties for playing songs, even though they also obviously provide free marketing for artists.

His argument isn’t quite factually correct - In the U.S. royalties are paid by radio stations to song writers but not artists (it comes to about $450 million per year). In most of the rest of the world, though, artists are paid royalties. But a much more interesting analysis of the radio industry is the very strong desire for labels and musicians to pay them to play songs. Payola is now illegal, but the practice almost certainly continues. As recently as 2005, former New York State Attorney General Eliot Spitzer prosecuted payola-related crimes in his jurisdiction.

Recorded music is nothing but marketing material to drive awareness of an artist. Websites that bring that music to listeners are doing artists a favor. In fact, they’re doing them a favor that they should (and will) be paid for. Young artists and songwriters in particular benefit from these services - Until a few years ago they had almost no way to break into the mainstream without getting a label to promote them. Now those walls are being torn down, and Bragg has the audacity to complain about it.

I think the main reason Bragg wrote this article is jealousy over the massive success of someone he once met - Bebo cofounder Michael Birch. The paragraphs quoted above where he takes credit for their business model reveal his angst in that regard. Bragg had absolutely nothing to do with Bebo’s $850 million payday. And everything else he wrote in that article is dead wrong, too.

Discuss amongst yourselves, feel free to add your side to this argument.