Boucher Urges FCC to Approve XM-Sirius Merger

Rep.: Relevant Competitive Market Is Audio Entertainment, Not Satellite Radio

By John Eggerton -- Broadcasting & Cable, 3/25/2008 11:48:00 AM

Rep. Rick Boucher (D-Va.) Tuesday praised the Justice Department's decision that the XM Satellite Radio-Sirius Satellite Radio merger was not anticompetitive and urged the Federal Communications Commission to approve the deal.

The applause was not unexpected. Boucher wrote FCC chairman Kevin Martin last fall to express his support for the merger, including the a la carte proposals offered up by the companies as an inducement to the FCC.

In a statement e-mailed to reporters, Boucher said Justice got it right when it determined that the relevant competitive market was not satellite radio, but "the entire marketplace for audio entertainment, including terrestrial radio, Internet radio and consumer devices, such as iPods," adding that a merged company would have "limited ability" to raise prices.

"The merger is clearly in the public interest," he concluded. "I urge the FCC to complete its review of the XM and Sirius transaction expeditiously and allow the two companies to proceed with their merger plans.”

Those plans, according to Sirius and XM, include ensuring that "no existing radio will be made obsolete by the merger." That point was made in a statement from the two companies Monday night after criticisms by the National Association of Broadcasters of the satellite companies' failure to deliver on promised interoperable radios -- the two services use different types of receivers.

"Consumers will be able to obtain the best of both Sirius and XM on any of today’s satellite-radio devices with one monthly subscription," the companies said. "XM customers would continue to receive their existing XM service and be able to obtain certain Sirius programming. Sirius customers would continue to receive their existing Sirius service and be able to obtain certain XM programming."

The merged company also promised to offer eight different service options, including a la carte packages that will be available to subscribers using new radios that will be supplied if the merger is approved.

Boucher praised that a la carte proposal, which has also been hailed by a la carte fan Martin. "This unprecedented approach will provide subscribers with more choices and lower prices," Boucher said, "and will pave the way for a form of content acquisition based on the individual programming preferences of listeners."

The FCC is expected to put some conditions on the merger if it approves it. Martin has said that he would like to get the merger review completed by the end of this month.