Wisconsin AG attacks XM/Sirius merger


"Unlike a traditional two-to-one merger, there are none of the usual reasons that could justify this combination," wrote Wisconsin Attorney General J.B. Van Hollen to Thomas O. Barnett, the Assistant Attorney General for Antitrust at the DOJ. Van Hollen wants the proposed XM/Sirius merger blocked. Van Hollen enumerated the absent conditions. There is no failing company; the companies have not demonstrated "extraordinary efficiencies" resulting from the merger; there is little chance of a third firm entering the market; and finally, DARS customers on board would be "unlikely to switch to another format." Van Hollen says iPods, cell phones and CDs cannot be considered substitutes for DARS since they lack range and the offering of live media; nor is broadcast radio since it is tethered to a specific market and dependent on advertising rather than subscriptions for revenue. He notes that Milwaukee has significant radio coverage, with 41 stations, but that this total pails in comparison with the 100+ channels the two DARS companies can offer separately. He noted that the most of Wisconsin doesn’t have the luxury of 41 stations; most areas are served by 15 or less, with some areas getting five or less stations. "I urge you to move to block the merger, as it present a real threat to competition and is a clear violation of the Clayton Act’s prohibition on merger-to-monopoly."