Reuters, May 1, 2008
By Peter Kaplan

The Federal Communications Commission should impose conditions on Sirius Satellite Radio Inc's proposed $3.95 billion acquisition of rival XM Satellite Radio Holdings Inc to protect consumers, two senior Democratic lawmakers said on Thursday.

Rep. John Dingell, chairman of the House Energy and Commerce Committee, and Rep. Edward Markey, urged the FCC to take steps to protect consumers in connection with any decision to approve the merger.

Such steps should include allowing any manufacturer to sell consumers receivers that work with the merged company's satellite service, said Dingell and Markey, chairman of the House Subcommittee on Telecommunications and the Internet.

The XM-Sirius deal has been cleared by antitrust officials at the U.S. Justice Department but still needs the approval of the FCC.

Representatives of XM and Sirius declined to comment.

But Paul Gallant, an analyst with Stanford Washington Research Group, said the lawmakers' letter to FCC Chairman Kevin Martin bodes well for the deal.

"It's a good thing when two of the most powerful House Democrats are only talking conditions and not rejection, as some others in Congress are doing," Gallant said.

Last month, a high-ranking Democrat on the Senate Commerce Committee, Sen. Byron Dorgan of North Dakota, urged the FCC to block the XM-Sirius combination entirely.

"The conditions that Dingell and Markey represent appear relatively limited and wouldn't seem to be deal breakers," Gallant said.

The merger would bring entertainers such as Oprah Winfrey and shock-jock Howard Stern under the same banner. It has been criticized as anti-competitive by the traditional radio industry, and by some U.S. lawmakers.

Antitrust authorities at the Justice Department approved the combination in March after concluding it would not harm consumers. The department said satellite radio companies face stiff competition from traditional AM/FM radio, high-definition radio, MP3 players and audio delivered by mobile phones.

Dingell from Michigan, and Markey of Massachusetts, called on the FCC to ensure the satellite radio companies adhere to pricing constraints they have already submitted to the agency.

"Second, the commission should require the merged company to permit any device manufacturer to develop equipment that can deliver the company's satellite radio service," they said in their letter.

Under U.S. law, the FCC determines whether a communications deal is in the overall public interest.

Sirius Chief Executive Mel Karmazin has promised that the combined company would let customers buy channels individually as well as let them block adult channels and get refunds for those blocked channels. Sirius has also said all existing XM and Sirius satellite radios would continue to work after the merger.

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