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Satellite radio mega-merger clears antitrust regulators

Posted: 27 Mar 2008 ?? ?Print Version ?Bookmark and Share

Keywords:satellite radio merger? FCC?

Antitrust lawyers of the U.S. Department of Justice this week approved the proposed $5-billion merger deal between rivals XM Satellite Radio and Sirius Satellite Radio, according to a CNN report.

In a statement, the Justice Department said "the evidence does not demonstrate the proposed merger of XM and Sirius is likely to substantially lessen competition, and the transaction thus is not likely to harm consumers."

Sirius and XM each obtained stockholder approval for the merger in November 2007.

Reed Hundt, former chairman of the U.S. Federal Communications Commission (FCC), also commented on the merger: "I think that if XM and Sirius combined, it will be pro-competitive in all likelihood. There's no indication of any anti-competitive outcome if they do combine, so let's give them a chance to have a sharper point on the arrow and see if they can do better in terms of penetrating the listener audience."

Both service providers are also reported to have entered into contracts with automakers to provide their services and equipment in new vehicles.

The merger, according to the CNN report, has been opposed by U.S. over-the-air broadcasters and consumer groups who argued it could lead to sharply higher subscription costs. The regulators said they found no basis to support the argument.

In addition, XM released a statement saying that radios owned by its current subscribers would not need to be replaced to continue receiving programming. But an analyst said it will take a while before people can receive full programming from both companies over one device.

The pending merger is still subject to approval of the FCC, which could place conditions of its own on the merger.

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