Wisconsin Attorney General J.B Van Hollen asked Thursday the Federal Communications Commission to reconsider the pending merger between Sirius and XM satellite radio.
In a letter addressed to FCC Chair Kevin Martin, Van Hollen asked the FCC to consider taking action against the proposed merger, which has already been approved by the U.S. Department of Justice.
“The requested license transfer by XM-Sirius would eliminate competition in the satellite radio industry,” Van Hollen wrote. “The combined XM-Sirius companies would feel free to raise prices, stifle innovation and reduce program diversity.”
Van Hollen added a post-merger subscription plan has emerged that may result in a satellite radio monopoly detrimental to the public interest.
“This combination will result in a single corporation controlling access to all nationally available satellite radio,” he wrote. “The U.S. Department of Justice’s failure to take action puts the burden on the FCC to take into account a broader public interest standard.”
The letter to the FCC comes seven months after Van Hollen wrote a similar letter to Assistant U.S. Antitrust Attorney and DOJ official Thomas O. Barnett, in which he voiced concerns over the possible merger. Van Hollen’s concerns had little effect, as the DOJ approved the merger.
University of Wisconsin law professor Richard Heymann said any opinion on the effects of the merger could not be formed without extensive knowledge of the complexities of the radio market.
“This is a very sophisticated issue,” Heymann said. “You can’t just sit back and make judgments about a very complicated issue like this without knowing all the facts.”
Heymann gave past examples of how concerns over possible monopoly formation often turn out to be benign, such as the worries over the AOL-Time Warner merger in 2001 that later proved unfounded.
Heymann also said opponents to the merger opposed it on oversimplified grounds, and said a detailed knowledge of the economics of the market was necessary to make a sound judgment on the issue.
XM and Sirius transmit roughly 100 channels apiece, compared to 41 broadcast signals available in Milwaukee. Some parts of rural Wisconsin receive fewer than 15 broadcast signals, according to Van Hollen.
After the DOJ approved the merger March 24, approval by the FCC remains the final regulatory hurdle for the two companies before the full merger can take place.