In Defense of the XM/Sirius Merger - Broadcasting & Cable

In Defense of the XM/Sirius Merger

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As the 13-term U.S. Representative from New York, I support the proposed merger of XM Satellite Radio and Sirius Satellite Radio. I firmly believe the merger is good for consumers, and that appropriate adjustment can be made, if needed, to accommodate any antitrust challenges.

This merger will allow the companies to consolidate programming and better utilize channel capacity to offer even more unique and diverse programming. The merged company would meet the discriminating needs of its audience, which includes minority and underserved communities.

Satellite radio has created the model for incorporating new artists, old favorites, and the top 40 in the playlist. National and world news, talk shows, sports, music and entertainment are offered. If merged, consumers will be spared having to purchase two different receivers and pay two separate service fees to hear Major League Baseball (XM) and the NFL (Sirius).

The combined company plans to offer an array of new artists, service tiers and family-friendly programming, more affordably.

The beauty of the vast numbers of satellite channels means that paid radio service will have great appeal for racial, ethnic, geographical, religious and age-diverse populations, with distinctive needs and interests.

The FCC and the U.S. Department of Justice must approve the merger. The FCC must determine whether it's in the public interest, based upon consumer benefits. On Oct. 25, myself and 10 of my congressional colleagues jointly wrote a letter to Chairman Kevin Martin of the FCC, voicing our ardent support for the merger.

The Department of Justice must determine whether the merger will run afoul of antitrust considerations. Despite the two companies merging to produce one national satellite radio provider, I believe the overall radio market is competitive and that the consolidation by XM and Sirius into one company will enhance competition, because a merged satellite radio company will serve as a robust alternative to terrestrial broadcasting. With a growing combined subscriber base of 15.4 million, satellite radio has garnered 4% of the radio audience, while AM and FM radio stations command a whopping 96%.

Over the last 10 years, the American radio audience has witnessed an overwhelming consolidation of radio, which has led to decreased diversity in programming. Satellite radio has been in existence for less than six years. Consolidation would yield the ability of the merged company to enhance its opportunities by virtue of being able to achieve greater economies of scale and scope, at less cost to the consumer. I urge approval of the merger this year.

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