FCC official voices doubts on Tribune and Sirius deals
By Peter Kaplan
WASHINGTON (Reuters) - A Federal Communications Commission official on Thursday expressed skepticism about whether he would endorse Sirius Satellite Radio Inc.'s proposed acquisition of XM Satellite Radio Holdings Inc or renew regulatory waivers sought for the leveraged buyout of Tribune Co.
FCC Commissioner Michael Copps, one of two Democrats on the five-member commission, said it would be a "steep climb" for him to cast a favorable vote on either deal because he has serious concerns about consolidation in the U.S. media.
"Somebody's going to have to make a pretty powerful and potent demonstration that it serves the public interest," Copps said, referring to the XM-Sirius deal.
"The parts of the (public) record that I've looked at so far have not shown me that (the deal) serves the public interest," Copps told reporters at a briefing.
Sirius plans to buy XM in an all-stock deal worth about $4 billion. The transaction would combine the only two providers of satellite radio service in the United States and has sparked concerns among some U.S. lawmakers and consumer groups.
The deal is being reviewed by both the Justice Department and the FCC.
Sirius and XM have argued that the deal would not hurt consumers because satellite radio faces competition from other forms of audio like traditional AM-FM radio and personal audio players.
Copps declined to comment on how he will vote.
But Copps said he had "very serious worries" about media consolidation in general. "I think localism, competition, diversity (in the media) have been seriously threatened."
In a separate matter, Tribune needs the FCC to endorse the transfer of Tribune TV licenses and grant the company waivers in cross-ownership markets in order to go forward with a leveraged buyout deal led by Chicago real estate magnate Sam Zell.
Under FCC rules, a single company cannot own both a daily newspaper and a broadcast outlet in the same market. Tribune and some other companies with cross-ownership markets were either grandfathered around the ban or received a waiver that allowed them to own both.
However, FCC rules provide that a transfer of control terminates any grandfather exemption or waiver, so without FCC approval Tribune could be forced to divest assets in cross-owned markets.
"I think everybody understands that the Tribune thing would be a steep climb for me given my history on consolidation," Copps said.
The FCC is considering loosening the restrictions on cross-ownership. But Copps dismissed suggestions that this should be a factor in the Tribune requests.
"I do not buy into this argument that, well, because you might be considering rule changes, ergo you can't apply the current rules to current pending applications," Copps said.
(Editing by Brian Moss)
