XM-Sirius Still Concerns Attorneys General

States Attorneys General Continue to Oppose Satellite-Radio Merger

By John Eggerton -- Broadcasting & Cable, 5/9/2008 10:45:00 AM

States attorneys general continued to register their concerns with the proposed XM Satellite Radio-Sirius Satellite Radio merger.

The attorneys generals met with Federal Communications Commission member Jonathan Adelstein this week to talk about the lack of an interoperable radio that would work with both services, as well as their general concern that "significant harms" would result from "the loss of a direct competitor.”

That is according to a letter from the attorneys general of Washington state and Connecticut outlining the meeting, which was distributed Thursday to reporters by Adelstein's office.

Eleven attorneys general registered their disapproval of the Justice Department's decision not to apply any conditions to the possible merger, arguing that it should have at least required a la carte pricing or divestiture of sufficient spectrum to create a third satellite company to compete with the new, merged entity.

In the meeting with Adelstein, the attorneys general said they supported the carve-out.

Adelstein shared that concern, saying, "The attorneys generals have a number of serious concerns. They have a feeling that the Justice Department did not pay proper deference to their concerns when it issued its opinion … In this case, those concerns were dismissed and there was no proper audience given to the attorneys general. I think it is important that the FCC, after such dismissive treatment by the AGs, take extra consideration on the very legitimate concerns that the attorneys generals are raising."

There is no sign of an XM-Sirius merger decision out of the FCC anytime soon. Adelstein said he didn't have any idea. An FCC source said a key sticking point remained whether and how sufficient spectrum could be carved out to create a competitor.

XM and Sirius have already twice delayed deadlines for unwinding the deal absent government approval, and they have now put it on an automatic, two-week extension plan unless one or the other decides to back out.

Asked how he planned to vote on the merger, Adelstein said it would depend on how it was conditioned.

FCC chairman Kevin Martin was asked Thursday whether he, too, would meet with the attorneys general after there had been a suggestion that he declined to meet with them.

"I'm not sure who told you I declined,” he said. “If they asked for a particular date that I was unavailable, that may have happened, but I'm not aware that we have declined, and of course, I meet with all kinds of parties who are interested in talking about any of the proceedings in front of us."