KARMAZIN CALLED TO TESTIFY BEFORE HOUSE ANTITRUST TASK FORCE Jeffrey Yorke – Radio and Records The Antitrust Task Force, a brand new subcommittee of the House Judiciary Committee, will examine the proposed $13 billion merger between Sirius and XM satellite radio companies and has already confirmed that Sirius CEO Mel Karmazin will testify on Feb. 28 when the committee makes its debut.
Chaired by Rep. John Conyers (D-MI), the committee has been established to focus on antitrust and competition policy issues and next Wednesday afternoon’s hearing, billed “Competition and the future of Digital Music,” will focus on the proposed satcasters’ merger.
"Digital music is at the cutting edge of technology and innovation. We are holding this hearing to allow Members to probe whether this merger will enhance or diminish competition in the digital music distribution industry,” Conyers says. “Our members will explore how to define this new marketplace, and whether this merger will lead to increased choices and lower prices for consumers."
Ranking Member Lamar Smith (R-TX) added, "XM and Sirius provide unique programming options for millions of customers nationwide. Consumer's interests should remain our priority. This hearing will help determine whether customers will get higher or lower prices and more or fewer programming options with the proposed merger. In particular, the Committee will examine whether satellite radio competes against terrestrial radio, the Internet or other emerging technologies."
Conyers is forming the new task force and committee members from both the Democratic and Republican sides are being selected. The subcommittee, created on Wednesday (Feb. 21) morning, will have a limited term, now set to end in August when Congress adjourns for summer recess.
Banc of America Securities analyst Jonathan Jacoby, who gives the merger a “less than 50-50 chance” of winning regulators approval, says “a congressional hearing doesn’t doom the deal (we believe the merger does pass muster on competitive grounds), but it shows that the high profile nature of the transaction could attract plenty of opposition” and he expects the hearing to slow the entire approval proves.“ Jacoby adds that “a review by Congress seems to open the door further to politically motivated opposition.”
The hearing is perfect timing for the NAB which had already scheduled its annual State Leadership Conference for Feb. 27-March 1. That means hundreds of grassroots broadcasters will be in Washington, preparing to rush Capitol Hill to let their representatives know about the hardships small broadcasters face daily. The NAB schedule this year has all but an evening dinner (featuring Senate Commerce Committee co-chairman Daniel Inouye and Ted Stevens) cleared for lobbying. It will give the broadcasters plenty of time to lean on representatives before the 3 p.m. hearing begins. |