US lawmaker urges more conditions on XM-Sirius deal

By Peter Kaplan

WASHINGTON, July 15 (Reuters) - A key U.S. lawmaker on Tuesday called for regulators to impose tougher conditions on Sirius Satellite Radio Inc's (SIRI.O) acquisition of XM Satellite Radio Holdings Inc XMSR.O.

Rep. Edward Markey, chairman of the House Subcommittee on Telecommunications and the Internet, said the Federal Communications Commission should go beyond requirements that FCC Chairman Kevin Martin has already proposed the agency impose on the companies.

Markey said his conditions are needed to protect consumers and help ensure that free, over-the-air radio remains a viable business.

"I believe that such an extraordinary (satellite radio merger) request compels the commission to adopt several extraordinary conditions if it wishes to approve the merger," said Markey, a Democrat from Massachusetts.

Martin has proposed that the agency approve the deal so long as the companies make available to consumers radios that receive both Sirius and XM, cap prices for three years, offer programming on an "a la carte" basis, and make 24 radio channels available for noncommercial and minority programming, among other things.

But in a letter to Martin on Tuesday, Market said the agency should require that all new satellite radio receivers be built with technology enabling them to also receive high-definition terrestrial radio signals.

Markey also said the FCC should extend the price caps to six years and increase the number of channel set-asides.

"Only through such a mandate will the commission adequately ensure that competition in digital radio services is as robust as possible and that free, over-the-air radio remains a vibrant marketplace alternative for consumers well into the future," Markey wrote.

On Friday, Martin said he would consider further conditions on the deal if it were needed to win support of other FCC commissioners. Martin said he hoped the commissioners would be ready to vote on the deal by the time the agency holds its next meeting on Aug. 1.

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.

The FCC decision is the final hurdle in a regulatory marathon for the deal that was first announced in February 2007. Antitrust authorities at the U.S. Justice Department approved the merger this past March.

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.

But it is still unclear whether Martin has the two other votes he will need on the five-member commission to get his proposal through. (Editing by Gary Hill)