US Senate antitrust chief skeptical on Sirius-XM pact

21 Mar 2007
00:00

(Associated Press via NewsEdge) The chairman of a US Senate antitrust panel expressed skepticism regarding claims by two satellite radio companies that their merger would not eliminate competition or lead to higher prices.

During a hearing on the proposed combination of Sirius Satellite and XM Satellite, Democratic Senator Herb Kohl questioned assertions by Sirius's chief executive that the combined company would still face significant competition with land-based radio, iPods and Internet radio.

'We must view these claims with a healthy degree of skepticism,' Kohl said. 'Over-the-air radio does not come close to duplicating the impressive array of program offerings of satellite radio.'

Mel Karmazin, chief executive of Sirius, nevertheless stuck to his argument that a combined Sirius-XM would face heavy competition from other sources.

'There is no question that there is robust competition in this area,' he said. Karmazin testified before the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights, which Kohl chairs.

The proposed merger still faces what observers say could be challenging antitrust reviews by the Federal Communications Commission and the Justice Department. When the FCC created the satellite radio industry in 1997, it did so on the condition that the two licensees would not merge.
Kohl's subcommittee is the third congressional panel in recent weeks to consider the competitive impact of the planned merger, although so far there are no congressional plans to prevent the merger. Sirius offered to pay $4.7 billion in stock for XM when the transaction was announced February 19.

© 2007 The Associated Press

© 2007 Dialog, a Thomson business. All rights reserved

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