FCC chief says will act soon on XM-Sirius deal

WASHINGTON Thu Jun 5, 2008 11:25am EDT

A person walks through the lobby of the XM Satellite Radio building in Washington, March 25, 2008. REUTERS/Larry Downing

A person walks through the lobby of the XM Satellite Radio building in Washington, March 25, 2008.

Credit: Reuters/Larry Downing

WASHINGTON (Reuters) - The U.S. Federal Communications will act soon on Sirius Satellite Radio's proposed purchase of rival XM Satellite Radio, the chairman of the FCC said on Thursday.

In an interview on CNBC television, FCC Chairman Kevin Martin said the XM-Sirius deal raised difficult regulatory issues. But he noted the companies had agreed to concessions and said the agency "will hopefully be able to do something on it soon."

The merger would bring entertainers such as Oprah Winfrey and shock jock Howard Stern under the same banner. It has been criticized as anti-competitive by the traditional radio industry, and by some U.S. lawmakers.

Antitrust authorities at the Justice Department approved the combination in March after concluding it would not harm consumers. The department said satellite radio companies face stiff competition from traditional AM/FM radio, high-definition radio, MP3 players and audio delivered by mobile phones.

Under U.S. law, the FCC must determine whether a communications deal is in the overall public interest. In the case of the XM-Sirius deal, the agency also has to decide whether to waive a rule that barred the two satellite radio companies from merging.

Sirius Chief Executive Mel Karmazin has promised that the combined company would let customers buy channels individually as well as let them block adult channels and get refunds for those blocked channels. Sirius has also said all existing XM and Sirius satellite radios would continue to work after the merger.

(Reporting by Peter Kaplan; editing by Maureen Bavdek)