Senator urges rejection of Sirius-XM merger

Democratic Sen. Herb Kohl of Wisconsin, the chairman of the U.S. Senate's antitrust subcommittee, urged regulators on Wednesday to block a proposed merger of Sirius Satellite Radio and XM Satellite Radio. Kohl sent letters to the Justice Department and the Federal Communications Commission (FCC) urging them to oppose the deal as it would cause "substantial harm to competition and consumers."

"Such a result should be unacceptable under antitrust law and as a matter of communication policy," Kohl wrote to FCC Chairman Kevin Martin and the Justice Department's antitrust chief, Thomas Barnett. The proposed deal would see Sirius buying XM in an all-stock deal worth $4 billion, effectively combining the only two satellite radio providers in the U.S.

The Justice Department and the FCC are currently reviewing the deal. Back in 1997, the FCC issued both companies licenses on the condition they would never merge. Sirius Chief Executive Mel Karmazin has promised that the combined company would not raise prices for customers. He believes the deal is not anti-competitive because traditional radio and even MP3 players could be considered competition for the services.

Source:
Reuters

Written by: James Delahunty @ 23 May 2007 18:47

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6 comments

fgamer

Yeah I completely don't agree with the merger of the two companys, it's just not a good thing for consumers even though these big execs at both companys are saying it'll be a good thing for our subscribers. I think not!

23.5.2007 21:34 #1

borhan9

Quote:The Justice Department and the FCC are currently reviewing the deal. Back in 1997, the FCC issued both companies licenses on the condition they would never merge.Well if this is the case then their might have something to fight.

24.5.2007 05:49 #2

spydah

I kinda like the merger because it brings content together you cant get unless you own each companies hardware. The only issue that about this that im airy on is what price changes will be if this does go through. Plus they are doing this to save Sirius from going belly up. XM is still currently going strong.

24.5.2007 05:53 #3

ripxrush

i think that Sirius is going stronger than people think, i personally have an XM but there are a lot of people out there that want Howard stern & got Sirius for him. If you did see also that Sirius is buying XM not the other way around! but i am worried that if they merge no matter who buys who & for what ever reason there will be no competition for that company & they can make things the way they want & that may not be in the best interest of consumers! That is why there are antitrust laws for stuff like this to protect the consumer! It would be a monopoly if they merged.

24.5.2007 06:20 #4

wetsparks

You guys are crazy, neither company is able to turn a profit. So what is best for consumers? Let them merge and have a monopoly that way but with twice the satellites and other technologies. Or do you suggest that they try to hold on as long as possible for the other company to finally go bankrupt, probably having to raise prices to outlast the other, and get a monopoly that way? As to this idiot Senator saying it will hurt competition, these two companies losing money every year hurts competition because no one else is dumb enough to start a third company knowing that they will lose money also.

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24.5.2007 12:26 #5

retepa

I am for the merger.
This type of technology, free of FED interference, is phenomenal. Let them merge and see what happens. It is a win/win situation. We will all benefit from more variety of channels and if they become too pricey "others" will take over.

24.5.2007 17:10 #6

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