"Elimination of the head-to-head competition currently offered by XM and Sirius leaving only a monopoly satellite radio service will likely result in higher prices and poorer service being offered to consumers," Kohl said. "Satellite radio is a unique service for which none of the other audio services is a substitute. Uncertain promises of competition from new technologies tomorrow do not protect consumers from higher prices today."
The FCC and Justice Department are currently reviewing the proposed deal. The FCC issued satellite radio licenses 10 years ago to D.C.-based XM (NASDAQ: XMSR) and New York-based Sirius (NASDAQ: SIRI) on the condition that the two companies would not combine their operations.
"I have concluded this merger, if permitted to proceed, would cause substantial harm to competition and consumers, would be contrary to antitrust law and not in the public interest, and therefore should be blocked by your agencies," Kohl said.
Analysts who follow the satellite radio industry have said that the merger is a long shot. Most analysts say the transaction, at best, has a 50 percent chance of getting regulatory approval.
XM spokesman Chance Patterson, in response to Kohl's comments, said that the "companies continue to believe that the regulatory agencies conducting formal reviews of the merger will conclude that the combination of Sirius and XM will increase programming choices and improve pricing for consumers, and that the audio entertainment market after the merger will remain robust, competitive and open to new entrants."
