Static: 14 State AGs Oppose XM/Sirius Merger
The letter--almost identical to the one sent by 10 other state attorneys general toward the end of March--argues that the merger would decrease competition and harm consumers. A number of critics have leveled these charges, calling it a merger to monopoly, including the National Association of Broadcasters.
If the merger gets a green light, however, the attorneys general added that the FCC should set aside part of the satellite-accessible spectrum for a free service to be started by a new third-party company. They reason that this is a minimum requirement for preserving competition once the two dominant entities have merged.
Barring the creation of a public satellite radio broadcaster--which is very unlikely in the current political climate--the only feasible financial support for this proposed free service would be advertising.
One such service has already been proposed by a private-equity firm, Georgetown Partners. XM and Sirius already accept advertising on a number of channels, and Sirius CEO Mel Karmazin has identified advertising as an important source of future revenue growth at Sirius, regardless of the merger's success.
The letter from the attorneys general isn't the only petition containing a conditional request. While terrestrial broadcasters have stated their opposition to the merger in no uncertain terms, the HD Digital Radio Alliance--representing the same companies--sent the FCC a petition asking that satellite radio sets be required to include HD receivers, if the satellite merger is approved.