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Dear Reader:

We wanted to let you know that, after nearly three years of operation on the World Wide Web, National Journal's Insider Update: The Telecom Act ceased publication as of January 1, 2008.

We took this step at a time when the National Journal Group is moving to increase technology coverage -- including reporting on telecommunications and broadcasting issues -- in several of its other publications. In particular, National Journal's CongressDaily -- our twice daily publication for Capitol Hill insiders -- will be adding staff in the coming weeks for this purpose.

CongressDaily will feature the kind of detailed coverage of telecom issues, both on Capitol Hill and at the Federal Communications Commission, that you are accustomed to seeing in Insider Update -- plus a lot more.

If you are interested in a trial subscription to CongressDaily, please call 800-424-2921 or e-mail us at memberships@nationaljournal.com. Thank you for your readership and support of Insider Update, and please don't hesitate to write to me at lpeck@nationaljournal.com if you have any questions or concerns.

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Lou Peck Editor In Chief

« Lawmakers Push FCC To Open Airwaves | Main | Lawmakers May Seek Overhaul At FCC »

Lawmakers, Celebrities Back Radio Merger

by Andrew Noyes

(Friday, December 14) The satellite radio services Sirius and XM, whose multibillion-dollar merger is pending before the FCC and Justice Department, got a vote of confidence from three more lawmakers and the production company owned by talk-show queen Oprah Winfrey.

In FCC filings, Reps. Joe Baca, D-Calif., who chairs the Congressional Hispanic Caucus; Bob Filner, D-Calif.; and Connie Mack, R-Fla., threw their weight behind the companies' controversial merger plan.

Baca said the estimated $14 billion merger "will not only maintain an advanced technological innovation, it will bolster the industry, thereby strengthening our economy." "More families and individuals will have an opportunity to access satellite radio," he said.

In his comments, Mack said the proposed union would let satellite radio "become a stronger competitor and will drive all other players in the market, including terrestrial radio, to focus on making their services even more appealing to consumers."

The National Association of Broadcasters is fighting the deal and has gotten support from a growing list of lawmakers. More than 80 members of Congress reportedly have expressed opposition, including Sen. Herb Kohl, a Democrat from Wisconsin and chairman of the Senate Judiciary Antitrust Subcommittee.

House Judiciary Committee Chairman John Conyers, D-Mich., and Rep. Steve Chabot, R-Ohio, also wrote to new Attorney General Michael Mukasey on Tuesday with concerns that Justice officials may "rush through" their analysis of the Sirius, XM merger.

While the two lawmakers have not taken a position on the transaction, they said they are worried that Thomas Barnett, the head of the Justice Department's Antitrust Division, may approve the deal "over the objections of department staff."

"Opposition to this proposed merger is broad and bipartisan because competition is preferable to monopolies," NAB spokesman Dennis Wharton said. "You would have to believe in the Tooth Fairy to accept claims that this would be the first monopoly in world history that leads to lower prices and better service."

The influential Winfrey has her own station called "Oprah & Friends" on XM, and Harpo Productions President Tim Bennett issued a statement backing the merger. Baseball legend Cal Ripken Jr., who hosts an XM show, and General Motors also endorsed the proposed pairing.

A spokeswoman for Sirius and XM said the firms are still hopeful that Justice and the FCC can "make their decisions and the merger could close by year end." "We have fully complied with the requests from both agencies. The ball is now in their court," she said.

Analysts for Stifel Nicolaus said Thursday that a Justice Department ruling "could come any day" and that if the agency approves the transaction, the FCC will follow suit. "We continue to believe it is more likely than not that the DOJ will clear the deal," they wrote.

RBC Capital Markets issued a similar statement, adding that Sirius and XM "shouldn't expect Santa to bring closure" by the end of 2007. The FCC will not be in a position to rule until early February at best, merger watchers said.


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