State AGs Again Target Sat Radio Merger

Last week, attorneys general for four states wrote the Federal Communications Commission again about the pending merger between XM and Sirius, calling the deal anti-competitive.

The FCC has the final regulatory say as to whether the satellite radio companies can combine operations. And it is the second time the attorneys general from Maryland, Connecticut, Ohio and Washington have written the commission and its chairman, Kevin Martin, about the proposed deal.

In their letter, the AGs wrote that the merger "poses a threat to competition" and subscribers of a combine satellite radio entity "may face the dual harms presented by anti-competitive mergers: Higher prices and diminished quality of service."

They added, "Ordinarily, these concerns are resolved by the presence of competitors that discipline prices and innovation. However, the proposed merger will eliminate the only major competition that has disciplined these firms to date."

If the FCC approved the merger, the state attorneys general said the agency should require a combined satellite radio entity to lease a portion of satellite capacity to an outside party. That party could deliver satellite radio service without charge to consumers, they wrote.

In addition to AGs from those four states, attorneys general from Missouri, Nevada, Iowa, Oklahoma, Rhode Island, Mississippi, Utah and Wisconsin have written the FCC in the past about their concerns with the merger.