Sirius-XM merger opposed by 72 U.S. House members

Sirius Satellite Radio Inc.'s proposed $3.58 billion purchase of XM Satellite Radio Holdings Inc. drew opposition from 72 members of the U.S. House of Representatives, who cited a lack of competing services.

Allowing the only two pay-radio companies to combine would have a "devastating" impact on consumers, the 47 Democrats and 25 Republicans said Monday in a letter to the Federal Communications Commission, the Justice Department and the Federal Trade Commission.

"The FCC has never before allowed the only two competitors in a given market to combine, and we would seriously question an FCC decision to start now," the lawmakers, led by Democratic Representative Gene Green of Texas and Republican Representative James Sensenbrenner of Wisconsin, said in the letter.

Sirius and XM executives say the merger wouldn't harm competition because new technologies have provided consumers with many more music products to choose from, including Internet radio, high-definition radio and music players such as Apple Inc.'s iPod. The letter from the lawmakers shows they haven't been persuaded by the new competition argument.

The FCC invited public comment on the combination of New York-based Sirius and Washington-based XM on June 8, triggering an informal 180-day countdown for completing its review. The commission often exceeds its self-imposed 180-day deadline for ruling on large transactions such as the Sirius-XM deal, which also faces a Justice Department antitrust review.

The two pay-radio companies, which between them lost more than $1.8 billion last year, have pledged to use an estimated $200 million to $400 million in annual cost savings to lower prices.

Shares of Sirius fell 2 cents to $2.90 at 4 p.m. New York time in Nasdaq Stock Market trading. They have declined 22 percent since Feb. 19, when the company agreed to combine with XM by exchanging 4.6 of its shares for each XM share. Shares of XM closed unchanged at $11.13.

The lawmakers' letter "speaks to the strong bipartisan opposition to merging the only two competitive players" in the pay-radio market, Dennis Wharton, spokesman for the National Association of Broadcasters, said Monday in an interview. The Washington-based trade group's members include free AM-FM radio station owners.

XM and Sirius called the letter "the latest in a series of NAB stifle-the-competition productions." The pay-radio companies said they are confident that regulators will decide the merger is in the public interest.

"The harder NAB lobbies to use government to stop the XM- Sirius merger, the more obvious it is that they fear the competition in the market that would result," the companies said in a joint statement e-mailed Monday.