From today's Wa****ngton Post:
FCC May Be Near Decision on Merger Of Sirius and XM
By Cecilia Kang
Wa****ngton Post Staff Writer
Saturday, May 24, 2008; D01
Federal Communications Commission Chairman Kevin J. Martin said
yesterday that the agency could reach a decision on the proposed merger
between Sirius Satellite Radio and XM Satellite Radio Holdings by the
end of June.
For XM and Sirius, the FCC's scrutiny is the last regulatory hurdle in
the way of the long-delayed proposed merger of the nation's only two
satellite radio providers. The deal has drawn criticism from consumer
groups and federal and state lawmakers who say consolidation of the
satellite radio industry would leave consumers with fewer choices and,
possibly, higher prices.
At a news conference, Martin said that a decision on the merger isn't
on the agenda of the agency's open monthly meeting for June, but he
added: "I still think the commission could act by the end of the second
quarter."
Earlier in the week, Sens. Olympia J. Snowe (R-Maine) and Claire
McCaskill (D-Mo.) sent a letter to Martin saying that if the merger is
approved, the agency should require the combined company to return some
of the radio spectrum it occupies so it can be reallocated to
competitors. They also called on the FCC to require that the merged
company make its service open to all manufacturers of satellite radio
players. They are among dozens of lawmakers who have criticized the
merger and pressured Martin to reject it or approve it with strict
conditions.
"We are concerned that this merger could possibly undermine competition
and harm the consumer if certain conditions are not applied," Snowe and
McCaskill said in the letter.
Public interest groups have asked the FCC to impose other conditions,
as well, such as allowing customers to buy certain channels rather than
the entire service and promising not to raise prices for the combined
programming package for at least three years.
XM, of the District, and Sirius, based in New York, successfully argued
against antitrust concerns raised by the Justice Department, saying
they must compete not just with each other, but with a broad variety of
entertainment options, including iPods, terrestrial radio and Internet
radio. The department approved the merger in March.
The FCC almost always moves in step with the Justice Department on
merger decisions. It is, however, in an awkward position: Lawmakers
such as John D. Dingell, a Michigan Democrat and chairman of the House
Commerce Committee, have raised concerns about the merger, and the FCC
granted spectrum licenses to XM and Sirius in 1997 with the condition
that they never merge.
Separately, Martin said yesterday that the FCC would hold a hearing
June 12 on the penalties that wireless carriers charge customers who
cancel their cellphone contracts before they are due. The hearing would
include wireless carriers and such public interest groups as Consumers
Union and AARP, he said.
Carriers such as Verizon Wireless, AT&T and Sprint Nextel routinely
charge customers $150 to $200 for canceling their services early, which
has sparked several lawsuits.
Early termination fees were among the five most common complaints by
cellphone users, who filed 20,300 service-related complaints in 2007,
according to the FCC.
Martin said he sup****ted a "national framework" to regulate the early
termination fees and has been meeting lately with a major wireless
carrier on the issue. He didn't say, however, whether such a policy
would protect wireless carriers from litigation in state courts,
something the carriers have been pu****ng.
The industry is starting to respond to the demands of consumers.
Tomorrow, AT&T will begin a gradual payment plan for customers who
cancel their contracts early. Instead of paying their $175 fee upfront,
the subscriber will pay $5 each month for the remaining months on the
contract.
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