The Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights has a scheduled hearing on “The XM-Sirius Merger: Monopoly or Competition from New Technologies” for Tuesday, March 20, 2007 at 2:15 p.m. in Room 226 of the Senate Dirksen Office Building.  Chairman Kohl will preside. 

Obviously, these hearings can greatly affect the perception on both XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI); and this is after some committee meetings in the House of Representatives.  Before you read further, please understand that there is still one "stances and positions" we are still awaiting and this is somewhat incomplete as a result.  We have our own opinions on this and we have noted in the past that the deal seems more likely to be approved with some severe conditions attached, and we have also noted that the companies both need the deal to be completed for them to both have ready access to more liquidity and to the capital markets.  That is our opinion ahead of time, but we obviously cannot say what the real outcome will be and won’t try to guess what the formal votes are or how long it will take to secure the votes.

Hearing before the Senate Committee on the Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights on “The XM-Sirius Merger: Monopoly or Competition from New Technologies.”  Those acting as witnesses are the following:

Mel Karmazin, Chief Executive Officer, Sirius Satellite Radio
New York, NY (Mel K. is obviously FOR the merger)

Mary Quass, President and CEO, NRG Media, LLC
Cedar Rapids, IA (NRG Media consists of 84 radio stations throughout 7 states in the Midwest and the Waitt Radio Network, based out of Omaha, Nebraska; ranked as 7th largest radio network in US; she represents the NAB which is "very strongly opposed to the merger.")

David Balto, Attorney at Law, Law Office of David Balto
Washington, DC (antitrust lawyer who was policy director of the Federal Trade Commission during the Clinton administration; formal opinion or stance not known/confirmed)

Gigi B. Sohn, President, Public Knowledge
Washington, DC (advocacy group that previously told the HOUSE COMMITTEE the merger should be approved subject to Three Conditions: new company makes available pricing choices such as a la carte or tiered programming; new company makes 5% of its capacity available to non-commercial educational and informational programming over which it has no editorial control; new company agrees not to raise prices for three years after the merger is approved)

If there are any updated positions or more public opinion made available before the hearing, we will make an update to this article.  This will be another big day for the XM-Sirius merger investors either way and it could further set the tone of how Wall Street is going to treat the companies: 1) as a combined entity or 2) as struggling competitors.  We will follow-up with more details when they are known, but they might not be known until after the meeting tomorrow.  With the market up today, XMSR is up 1.7% at $13.39 and SIRI is up 1.3% at $3.28.

Jon C. Ogg
March 19, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

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