Democrats to FCC: Restrict XM-Sirius deal

The proposed merger of XM Satellite Radio and Sirius Satellite Radio may have sailed through a U.S. Department of Justice review without conditions, but key congressional Democrats are urging the Federal Communications Commission to impose limits designed to protect consumers.

In a letter on Thursday (PDF), Reps. John Dingell (D-Mich.) and Edward Markey (D-Mass.) said they're not taking a position on whether the FCC should clear the deal, but they believe the regulators should consider certain steps as they weigh whether the union of the only two U.S. satellite radio operators satisfies the "public interest." Dingell and Markey are the chairmen of two House of Representatives panels that oversee the FCC.

Here's the relevant portion outlining what they'd like to see:

First, the Commission should require the merged entity to adhere, at a minimum, to the pricing constraints that XM and Sirius have already submitted to the Commission. Such a condition would ensure that a combined entity does not take advantage of consumers by leveraging its position as sole provider of satellite radio services by raising prices.

Second, the Commission should require the merged company to permit any device manufacturer to develop equipment that can deliver the company's satellite radio service. Device manufacturers should also be permitted to incorporate in satellite radio receivers any other technology that would not result in harmful interference with the merged company's network, including hybrid digital (HD) radio technology, iPod ports, Internet connectivity, or other technology. This principle of openness would serve to promote competition, protect consumers, and spur technological innovation.

Attorneys general from 11 states have made similar recommendations. In their effort to win over regulators last year, the two companies unveiled plans to offer new packages of channels at reduced rates and committed, at least informally, to not raise their monthly subscription fees.

FCC Chairman Kevin Martin said in late March that the agency is inching closer to a decision on whether the deal passes muster.

The Justice Department, for its part, concluded that the merger would not "substantially lessen competition," and XM and Sirius shareholders approved the transaction last December.

The FCC has already suggested that its bar for approval is higher. In 1997, the agency adopted an order prohibiting such a merger when it would result in only one operator controlling all satellite radio spectrum. In addition, terrestrial broadcasters and some consumer advocacy groups oppose the merger.