Sen. Herb Kohl (D-WI) is head of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights (part of the Judiciary Committee), and hosted Mel Karmazin back in March to discuss the proposed merger of XM and Sirius satellite radio firms. Kohl told Karmazin he had problems with the merger, and apparently Karmazin was unable to change his mind.
Kohl has fired off a letter to FCC Chairman Kevin Martin and Assistant Attorney General, Antitrust Division Thomas Barnett in which he states that, should it be determined that XM and Sirius constitute a distinct and separate market, then the merger cannot be allowed.
"It is my conclusion that satellite radio is in fact a separate market."
He explained his reasoning, noting the wide selection of programming, superior sound quality and mobility of the services as reasons it is distinct from all other audio services. Local radio is tied to its community, MP3s and iPods lack news and sports programming, and wireless internet is not a competitive alternative. He noted Karmazin's opinion that there isn't much chance of a new company entering the satellite audio business.
He also argued that putting conditions on the merger was unwise, and that continuing competition between the services was preferable to the possibility of "intrusive government regulation for years to come." He asked for the merger to be denied.
