Radio Daze: Congress Opposes Sirius-XM Merger
The letter's signatories came from both parties, with 47 Democrats and 25 Republicans listed, including former Speaker of the House Dennis Hastert of Illinois. It was written by Gene Green, D-Texas, and Jim Sensenbrenner, R-Wis.
The letter is a major setback for the satellite radio broadcasters, which have been lobbying hard to convince Congress and the FTC that the merger would not constitute a monopolistic act that limits consumer choice. The letter reads in part: "On its face, we believe that sanctioning the marriage of the only competitors in the satellite radio market would create a monopoly which would be devastating to consumers."
While Congress has no direct control over the commissions' execution of their duties, its legislative role includes issuing directives to the FTC and FCC about the scope and nature of those duties. As such, congressional opinion usually receives careful consideration.
The merger also drew fire from the National Association of Broadcasters, which represents terrestrial radio stations. Key figures of the NAB have publicly opposed the merger in testimony to Congress. In June, NAB President and CEO David K. Rehr sent a personal letter to Sirius CEO Mel Karmazin urging him to withdraw the merger application. The NAB has also created a Web site, XMSiriusMonopoly.com, dedicated to preventing the merger.
On a positive note for Sirius, Volkswagen announced that Sirius products will be offered as standard equipment beginning with 2008 models. As part of the deal, radios will be installed in the Touareg2, New Beetle, New Beetle Convertible, GTI and GLI models. They'll also be available as add-ons for the Jetta, Passat and EOS models. Overall, Volkswagen will install satellite receivers in about 80% of its new vehicles, with an offer of three months of free service.