Rep. John Conyers Jr. Holds a Hearing On the Proposed Xm-Sirius Satellite Radio Merger

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Rep. John Conyers Jr. Holds a Hearing On the Proposed Xm-Sirius Satellite Radio Merger

HOUSE JUDICIARY COMMITTEE HOLDS A HEARING ON THE PROPOSED XM-SIRIUS SATELLITE RADIO MERGER

FEBRUARY 28, 2007

SPEAKERS: REP. JOHN CONYERS JR., D-MICH. CHAIRMAN REP. HOWARD L. BERMAN, D-CALIF. REP. RICK BOUCHER, D-VA. REP. JERROLD NADLER, D-N.Y. REP. ROBERT C. SCOTT, D-VA. REP. MELVIN WATT, D-N.C. REP. ZOE LOFGREN, D-CALIF. REP. SHEILA JACKSON-LEE, D-TEXAS REP. MAXINE WATERS, D-CALIF. REP. MARTIN T. MEEHAN, D-MASS. REP. BILL DELAHUNT, D-MASS. REP. ROBERT WEXLER, D-FLA. REP. ANTHONY WEINER, D-N.Y. REP. ADAM B. SCHIFF, D-CALIF. REP. LINDA T. SANCHEZ, D-CALIF. REP. CHRIS VAN HOLLEN, D-MD. REP. DEBBIE WASSERMAN-SCHULTZ, D-FLA. REP. KEITH ELLISON, D-MINN. REP. HANK JOHNSON, D-GA. REP. LUIS V. GUTIERREZ, D-ILL. REP. BRAD SHERMAN, D-CALIF.

REP. LAMAR SMITH, R-TEXAS RANKING MEMBER REP. F. JAMES SENSENBRENNER JR., R-WIS. REP. HOWARD COBLE, R-N.C. REP. ELTON GALLEGLY, R-CALIF. REP. ROBERT W. GOODLATTE, R-VA. REP. STEVE CHABOT, R-OHIO REP. DAN LUNGREN, R-CALIF. REP. CHRIS CANNON, R-UTAH REP. SPENCER BACHUS, R-ALA. REP. BOB INGLIS, R-S.C. REP. RIC KELLER, R-FLA. REP. DARRELL ISSA, R-CALIF. REP. JEFF FLAKE, R-ARIZ. REP. MIKE PENCE, R-IND. REP. J. RANDY FORBES, R-VA. REP. STEVE KING, R-IOWA REP. TOM FEENEY, R-FLA. REP. TRENT FRANKS, R-ARIZ. REP. LOUIE GOHMERT, R-TEXAS

WITNESSES: MEL KARMAZIN, CHIEF EXECUTIVE OFFICER, SIRIUS SATELLITE RADIO

DAVID REHR, PRESIDENT AND CEO, NATIONAL ASSOCIATION OF BROADCASTERS

GIGI SOHN, PRESIDENT AND FOUNDER, PUBLIC KNOWLEDGE

MARK COOPER, DIRECTOR OF RESEARCH, CONSUMER FEDERATION OF AMERICA

CHARLES BIGGIO, FORMER DEPUTY ASSISTANT ATTORNEY GENERAL, ANTITRUST DIVISION

[*] CONYERS: Good afternoon.

The first hearing of the Antitrust Task Force for the 110th Congress will come to order.

I welcome all of our members, especially our ranking member, Steve Chabot of Ohio, who will be joining us momentarily.

The very first hearing of our Antitrust Task Force involves a discussion of the issue of competition in digital media as exemplified by the proposed merger of Sirius and XM Radio.

We come to this hearing with an open mind. But we recognize that the companies have the obligation to convince the Congress, the regulators and, most importantly, the American people, that this combination will improve the competitive playing field and benefit consumers. And so here are the concerns I'd like to lay on the table.

The critical issue in this hearing to me is whether the relevant market is all forms of digital music and retail music and radio or simply satellite radio. Proponents of the merger would note that the retail music industry exceeds $12 million in annual revenue, includes more than 230 million people who listen to ordinary radio and 50 million people who listen to Internet radio, more than 100 million iPods are going around the country, but yet there are 14 million satellite radio subscribers.

If we are to define the market as broadly as merger supporters advocate, what sort of precedent are we setting for other businesses?

Now, several commentators have suggested that the reason this deal is being pushed is that the present administration's appointees will be able to give their approval before the next election. Excuse me for being so candid about this consideration. And from at least one perspective, this merger can be said to turn a duopoly into a monopoly circumstance.

And, finally, my concern is about the potential for non- interoperability of competing technologies. How are we ever going to get the consumers who've already purchased equipment for either XM or Sirius to be able to use the equipment in a post-merger world? These consumers could be left high and dry and there could be complications that we hope to examine about how this could be made technologically smooth.

I look forward to a full and frank discussion with our distinguished witnesses and urge that we all be as concerned as we can for the public interest issue that overlies this hearing.

Our witnesses are David Rehr, the president and CEO of the National Association of Broadcasters. Our next witness, Ms. Gigi Sohn, president and founder of Public Knowledge, a nonprofit public interest organization th...

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