FCC Seeks Comment on XM-Sirius Radio Merger

Jun 09, 10:34 AM

Current Headlines: By John Dunbar Associated Press

WASHINGTON -- After 3 1/2 months of industry lobbying, congressional hearings and intensive Wall Street analysis, the public will have a chance to weigh in on whether it thinks the proposed merger of the nation's only two satellite radio companies is a good idea.

The Federal Communications Commission issued a public notice Friday seeking comment on the proposed merger of licensees Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.

The FCC will decide whether it is in the public interest for both licenses to be controlled by a single company.

The merger, valued at $4.7 billion when it was announced on Feb. 19, is also subject to approval by the Department of Justice, which will examine any competitive harm that may result from the combination.

The acceptance of the applications for filing starts an informal "shot clock" at the FCC, which tries to finish its review of mergers within 180 days. That would put a decision potentially sometime in December.

The merger faces some steep challenges.

To succeed, the Department of Justice will have to decide that the combination of the only two companies in the satellite radio business will somehow not be considered anticompetitive.

The FCC will have to decide whether to allow the companies to break a condition of the licenses that made the business possible 10 years ago.

The agency, at the time, said one licensee will "not be permitted to acquire control" of the other. The clause was inserted to ensure "sufficient continuing competition" in the new business.

Lawyers, lobbyists and executives for Sirius and XM have said the market has changed since 1997, including competition from Apple iPods, digital "high definition" radio and cell phones -- that competition extends beyond satellite radio and includes all forms of "audio entertainment," including Apple iPods, digital "high definition" radio and even cell phones.

Consumer groups have generally opposed the merger. Opposition from the National Association of Broadcasters has been relentless.

The FCC says that interested parties must file initial comments by July 9. Replies to Comments are due by July 9 and may be filed via e-mail and should include docket number 07-57. For more information, visit www.fcc.gov/cgb/ecfs.

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