I say back up and divest the whole mess. The satellites each become a business unto itself, the programming uplinkers pay leases and in turn get a share of subscriber fees from a fulfilment office somewhere in Iowa, the subscribers get a free receiver that picks up both satellites, and the FCC watches the whole mess they way they used to watch terrestrial radio when it was regulated.

The creditors? They get the satellite holding companies. The birds are where the big bucks are anyway. Besides, they can always reprogram them into energy-beam weapons and hold America hostage for an off-the-top slice of Gross Domestic Product. They’re good at that, aren’t they?

My †ake on this (and its really from an outsider perspective as I was reminded yesterday when I sat on a panel with the head of investor relations for Sirius) is that the FCC has not quite comprehended what the real competitive set is for satellite radio. The fact that the radio broadcasting association is fighting the merger tooth-and-nail should be a dead giveaway that satellite is part of the larger market for mobile entertainment, not a category of its own.

I doubt that another competitor will emerge in the satellite space. It is too expensive to build and maintain a network and it is not at all clear that this is the most efficient way to deliver radio content. The exclusive sports licenses that Sirius and Xm have negotiated with sports franchises apply only to satellite and won’t affect terrestrial competition.

It may be impossible for the FCC to regulate companies licensing exclusive content - that’s a natural competitive dynamic. I agree that it is not good for the consumer or either Sirius or XM at the end, but the market as it stands looks like a prisoner’s dilemma to me.

David