AGs unite for probe of XM-Sirius merger

John O'Brien Mar. 27, 2008, 4:18pm


WASHINGTON, D.C. - Eleven state attorneys general are demanding the Federal Communications Commission review the proposed merger between two satellite radio giants.

Claiming the merger between Sirius and XM, will create a singular giant on the marketplace, the attorneys general wrote in a letter FCC Chairman Kevin Martin Thursday.

"The combination of these companies will result in a single corporation controlling access to all nationally-available satellite radio," wrote the AGs, led by Ohio's Marc Dann.

"Given the national footprint, we are disappointed that the Department of Justice Antitrust Division would permit this merger to proceed unchallenged or without the imposition of appropriate terms and conditions that would reduce the proposed transaction's anticompetitive impact, such as the divestiture of spectrum to allow the entry of a new entity into this market."

XM and Sirius reached the agreement in Feb. 2007, and the U.S. Department of Justice decided Monday to close its investigation of the merger. It says no consumers or competitors will be harmed.

The FCC must also sign off on the merger.

"If this deal is allowed to proceed, Ohioans and radio listeners across the country will be forced to listen to limited programming offered by a monolithic entity at prices set in a monopolistic environment," Dann said.

"The antitrust laws were enacted to prevent deals like this. Since the (DOJ) didn't use those laws to prevent this monopoly, the FCC should use its powers to protect the public interest."

Joining Dann in the letter were Connecticut's Richard Blumenthal, Iowa's Tom Miller, Maryland's Doug Gansler, Mississippi's Jim Hood, Missouri's Jay Nixon, Nevada's Catherine Cortez Masto, Oklahoma's Drew Edmondson, Rhode Island's Patrick Lynch, Utah's Mark Shurtleff and Washington's Rob McKenna.

"Given that the FCC looks to a broader public interest standard than does the DOJ in fashioning its decisions in this context, we urge the FCC to address these important issues and give due consideration to the many concerns of the states," the letter says.

"Our offices stand ready to share with you our thoughts on the potential value of various remedial conditions available, such as mandatory publicly available interoperable receivers, a la carte pricing, and divestiture of spectrum."

The merger will be a tax-free union of approximately $13 billion. Each company's stockholders will own approximately 50 percent of the combined company.

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