Saturday, May 3, 2008

Top Democrats ask for restrictions on XM + Sirius

Top Democrats ask for restrictions on XM + Sirius

Two leading Democrats in the US House, who both chair committees overseeing the FCC, are asking for the Commission to place conditions upon its final approval of any merger between the nation's only two satellite radio providers.

Rep. John Dingell (D - Mich.) chairs the Committee on Energy and Commerce, while Rep. Edward Markey (D - Mass.) chairs the Subcommittee on Telecommunications and the Internet, part of the Commerce Committee.

While the Dept. of Justice approved the merger last March, it's not the final regulatory body that needs to sign off on the deal.

"The Commission's review of a proposed merger is not confined to simple economic analysis of the transaction," Reps. Dingell and Markey wrote. "The Commission has a unique role in reviewing proposed mergers because it is expressly directed to consider the broad public interest, in addition to other factors, when weighing any proposed license transfer."

While neither congressman is taking a public position on the matter, they urge that steps be taken to protect consumers.

Other Democrats in Congress have been more outspoken. Sen. Byron Dorgan (D - N.D.) urged the FCC to block the deal, saying the DOJ's reasoning was illogical, and the merger would not be in the public interest.

The minimum conditions that Dingell and Markey are looking for the FCC to impose include the pricing constraints that the two companies have already submitted. This would prevent the merged entity from raising prices once the merger is complete.

Another requirement is the enablement of open radios. While XM and Sirius have both said they would produce radios capable of receiving each other's signals, this proposal goes much further.

An open radio would be able to support technologies outside of radio, including the nascent HD Radio technology, as well as non-satellite radio related features. Additionally, any company would be permitted to produce radios, rather than the small group that currently does so now.

Exclusivity contacts would be made illegal under what Dingell and Markey suggest, which would essentially bar XM + Sirius from preventing competing technologies from finding their way onto their radios.

XM and Sirius had no comment.


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