More Static for Sirius-XM Deal

Sirius Satellite Radio (SIRI) Chief Executive Mel Karmazin is willing to play ball with the government on possible conditions placed on his planned merger with XM Satellite Radio. He has said he'll hold prices steady, for example, to allay concerns the deal would hurt consumers in the pocketbook. But Karmazin may cry foul over a slew of other restrictions that the Federal Communications Commission is under growing pressure to impose before it gives a green light to the proposed combination. Legislators want the FCC to force XM and Sirius to allow their satellite radio service on all manner of consumer electronics -- not just the devices made by manufacturers that have exclusive licensing agreements. The upshot would be devices that carry satellite radio alongside HD radio, Internet stations, and other competing sources of music. FCC officials are also being lobbied to require XM and Sirius to give up some of their channels for use by public radio or minority-owned broadcasters. The tougher the restrictions imposed by the government, the harder it will be for the companies to eke out the cost savings and revenue increases of as much as $6 billion that analysts estimate the deal will provide. Also, on May 6, Senior House Commerce Committee member Bobby Rush (D-IL) wrote FCC Chairman Kevin Martin, disavowing a letter about the XM/Sirius merger he had co-signed to Martin only the day before. In the original letter, on which Rep Rush teamed with Rep. Edolphus Towns (D-NY), they had "fully supported" the voluntary commitment of XM and Sirius to carve out eight channels, four apiece, for minority owners. Rep Rush says that he and Rep Towns had a "miscommunication," and that while he certainly advocates setting aside channels for minority ownership -- both he and Towns are African American -- he says eight channels aren't nearly enough.
http://www.businessweek.com/technology/content/may2008/tc2008057_605379....