Pressure Continues on XM/Sirius Deal

While regulators continued to scrutinize the pending XM/Sirius merger during the week (given statements that they want to wrap up the review process by the end of the month), the satellite radio companies kept feeling the heat from the deal's opponents.

Earlier this week, representatives from radio giant Clear Channel Communications met with Federal Communications Commission staff about the proposed transaction. During their visit at the Portals, company representatives said the XM/Sirius merger would be harmful to consumers and could concentrate satellite radio spectrum resources "in the control of one essentially unregulated entity."

In a filing detailing its FCC meetings, Clear Channel said a combined satellite radio company could use its market power to impede the growth of HD Radio, the fledgling digital audio service being rolled out by local radio stations.

"While HD Radio holds much promise, satellite radio faces no meaningful, foreseeable threat from HD Radio," Clear Channel said in its comments. "Moreover, XM and Sirius have completed with each other to obtain exclusive contracts with auto manufacturers - a crucial market into which HD Radio is just beginning to gain entry."

If the merger should win regulatory approval, a condition that HD Radio technology be embedded into satellite radio receivers should be attached to the transaction, Clear Channel said.

The radio conglomerate also proposed other conditions such as a divesture of some satellite radio spectrum and a ban on satellite-delivered local radio content by the combined company.