Monday, March 05, 2007

XM Declines To Hire Ashcroft As Lobbyist, So Former AG Signs With Merger Opponent

What this story doesn't say is that John Ashcroft had offered his services as a lobbyist to XM Satellite Radio following the announced merger with Sirius.

When rebuffed by XM, the former Attorney General was hired by a major opponent of the merger to exert influence upon his successor as head of the Justice Department, Alberto Gonzales.

Former Attorney General John Ashcroft, hired by opponents of the deal, has blasted the proposed merger of Sirius Satellite Radio Inc. (SIRI) and XM Satellite Radio Holdings Inc. (XMSR), saying their merger would leave only one provider in the market.

Ashcroft, who served as head of the Justice Department for four years until January 2005, was hired by the National Association of Broadcasters to examine the merger scenario.

The NAB, which represents traditional radio broadcasters, has been a fierce critic of the $13 billion merger since it was announced last week.

In a letter sent on February 27 to his replacement as attorney general, Alberto Gonzales, Ashcroft concludes "...the proposed Sirius/XM merger, which reduces the number of competitors from two to one, raises most serious competition concerns."

Ashcroft compared the current merger to the attempted takeover by satellite provider Echostar Communications Corp. (DISH) of Hughes Electronic Corp. In that instance, he said, a merger would have reduced the competitors in the satellite television market in many areas from three to two.

"The Department recognized that reducing competition from three to two was anticompetitive and opposed the transaction, which was eventually abandoned," he said.

He also draws comparisons with the attempted tie-up between Echostar and DirectTV Group Inc. (DTV), in which the FCC reaffirmed its rule of not granting a single commercial license for satellite TV. That deal also wasn't allowed.

<< Home