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Senate Antitrust Subcommittee Chair Says Nix XM/Sirius

The Chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights came out strongly against the merger of XM and Sirius Satellite Radio Wednesday.

In a letter to the heads of the FCC and the Justice Department's Antitrust Division, Herb Kohl (D-WI) didn't mince words.

Saying he had concluded satellite radio was a separate market and the merger would concentrate that market with no "viable competitive alternative" he urged the organizations to take "all necessary actions to deny approval of this merger and prevent the creation of this satellite radio monopoly."

Kohl's letter to FCC Chairman Kevin Martin and Assistant Attorney General Thomas Barnett came as the product of a March hearing on the merger in Kohl's subcommittee  in which Kohl had indicated the committee had problems with the proposed merger.

That strong opposition was music to the National Association of Broadcasters collective ears: "NAB is delighted that Senate Antitrust Subcommittee Chairman Kohl has recommended a rejection of this proposed monopoly merger. XM and Sirius are fierce competitors in the finite market of satellite radio."

Sirius and XM have countered saying they are trying to become a more competitive and financially secure service in the audio delivery space. They argue the space includes  terrestrial radio, cable and Internet radio, iPods and other mobile devices--all points Sirius chief Mel Karmazin made in Kohl's hearing.

Kohl disagrees and says the merger would create a monopoly. "I have concluded this merger, if permitted to proceed, would cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest, and therefore should be blocked by your agencies."

FCC Chairman Kevin Martin has already said the merger faced an uphill climb: ""Obviously the Commission will evaluate any transaction filed to make a determination whether or not approval would be in the public interest," he said when the deal was announced. "The hurdle here, however, would be high as the Commission originally prohibited one company from holding the only two satellite radio licenses."