US lawmaker seeks concessions in Sirius-XM deal

July 16, 2008 6:08:27 PM PDT
A key U.S. legislator is awaiting a response from regulators on his recommendation to impose more conditions on the acquisition of XM Satellite Radio Holdings Inc. by rival Sirius Satellite Radio Inc. Rep. Edward Markey, a Massachusetts Democrat who leads the House Subcommittee on Telecommunications and the Internet, wrote the chairman of the Federal Communications Commission Tuesday.

Markey said the combination of the only two providers of satellite radio demands "extraordinary conditions" to protect the public's interest.

The FCC's vote on the acquisition, expected soon, is the deal's last regulatory hurdle.

"Without meaningful, enforceable conditions this proposed merger should be blocked as inconsistent with the public interest," Markey wrote to the FCC's Kevin Martin.

Markey wants the FCC to ensure that new satellite radio receivers process high-definition radio signals and that the combined companies freeze their prices for six years and set aside more channels for noncommercial use.

Martin had proposed approving the deal as long as new radio receivers can get Sirius and XM, prices are capped for three years and 12 channels are set aside for noncommercial and minority programming.

Markey believes over time Sirius and XM will cease to be commercial-free. That change will hurt free, over-the-air radio stations as it did cable television, he said.

By making sure the two companies sell receivers that can get free radio, the FCC will preserve competition in the marketplace to the benefit of consumers, Markey wrote.

An XM spokesman said the company has no comment on Markey's letter.

Sirius did not immediately return a call for comment.

Sirius announced an agreement to buy XM in February 2007 for what was then a $4.7 billion, all-stock deal. As Sirius' stock price declined, the deal's value has fallen to $2.9 billion.

XM, based in Washington, D.C., serves 9.3 million subscribers. New York-based Sirius has 8.6 million subscribers.

The Justice Department cleared the deal in March.

Weeks ago, three Democratic senators urged Martin to require the companies to set aside at least 20 percent of about 300 channels for noncommercial and minority-operated stations, among other conditions. Five members of Congress from Minnesota sent a similar letter June 27.

Shares of Sirius rose by a nickel to $2.07 on Wednesday while XM shares rose 60 cents to $8.61.


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