Washington

Brownback Urges FCC Not to Approve XM-Sirius Merger

Former Republican Presidential Candidate Comes Out Against Satellite-Radio Combination in Letter to Federal Communications Commission Chairman Kevin Martin 4/10/2008 09:05:00 AM Eastern

Former Republican presidential candidate Sen. Sam Brownback (Kan.) wrote Federal Communications Commission chairman Kevin Martin Thursday asking him not to approve the XM Satellite Radio-Sirius Satellite Radio merger.

Sam Brownback

According to a copy of the letter, Brownback said the Department of Justice made a mistake when it found nothing anticompetitive about the merger and warned against allowing a combination of companies "peddling obscene and indecent material."

Brownback pointed to the FCC's "prohibition" on two satellite-radio companies "ever merging" and its mandate that XM and Sirius produce interoperable radios.

The first point has been debated, with proponents of the deal saying that the commission had not prohibited one company from owning the two licenses, but had simply provided guidance to that effect.

That reading got some support when former FCC chairman Reed Hundt, who headed the agency when the satellite licenses were handed out, weighed in supporting the merger. Hundt said the FCC meant to create competition to terrestrial radio, which hadn't happened with the two companies as separate entities.

The second point has not been debated. The two companies did not create the interoperable radios, although ironically, the DOJ used that separation to argue for the deal rather than against it, which did not sit well with Brownback.

The senator was not gentle in his criticisms of that DOJ decision, saying that it laid a "dangerous trap" for the FCC. "The FCC must not endorse the department's flawed finding that XM and Sirius do not compete with each other because it is to expensive for existing subscribers to switch providers," given the need to buy new equipment, he said.

"Essentially, the department rewarded XM and Sirius for their audacious refusal to comply with an FCC requirement to manufacture consumer-friendly interoperable radios," Brownback added, echoing the incredulity of the National Association of Broadcasters at Justice's reasoning.

Brownback -- who has been a leading voice for media-content control, including boosting indecency fines -- cited Howard Stern's Sirius show as an argument that "explicit programming will continue to play a prominent role in the business model" of the merged companies.

"I challenge the FCC to stand up where the Justice Department has laid down,” he added.

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