Contrary to statements by a senior Federal Communications Commission official, lawyers for Sirius Satellite Radio and XM Satellite Radio are claming that no FCC rule prohibits the two firms from merging.
In an FCC filing Tuesday night, Sirius and XM urged approval of their controversial $13 billion combination in part because “no commission rule bars the transaction.”
FCC chairman Kevin Martin, however, told reporters in January that the commission adopted a satellite-radio cross-ownership rule when it created satellite digital audio radio service (SDARS) in 1997.
Regarding the 1997 rule, Sirius and XM lawyers said in the filing that the FCC’s language that “one licensee will not be permitted to acquire control of the other remaining satellite DARS license” was nonbinding because “this language was not codified in the Code of Federal Regulations.”
Further disputing Martin’s view of the rules, the radio companies added, “It is merely a policy statement reflecting the [FCC’s] view, based on the evidence available in 1997, that two satellite-radio licensees were needed to have enough competition in the audio-entertainment market. That statement does not preclude today’s [FCC], recognizing a radically altered competitive environment, from finding that the proposed transaction serves the public interest.”
