In a letter sent to FCC chairman Kevin Martin today, Congressman John Dingell (D-MI) chairman of the House Energy and Commerce Committee argues that 2 conditions ought to be set by the FCC before they approve the merger.

The first condition would be to hold the merged company to it’s proposed pricing models.

The second is that they open up manufacture of their radios.

They do NOT take a position on whether the merger should be approved. More details here.

There has been lots of chatter all across the internets since Monday’s DoJ approval announcement.  One of the more interesting takes came from Bay Area DJ, “Big” Rick Stuart.  Mr. Stuart writes as a radio professional, a former employee of Mel’s at CBS Radio, and as a Sirius subscriber.  I thought his insights were interesting (as well as pretty much in line with mine).

As he writes here,  

1) big names stay and to listen to some of them you’ll pay more than “basic”
2) little weird stations might not stay or if they do will with staffing cuts
3) I don’t think there will be any programming duplication and Mel can be a loyal guy so if there is a choice XM staff gets cut
3) new hardware is coming soon, very very soon
4) the NAB will fight it all the way (and lose)
5) the very under the radar Sirius Backseat TV service will expand quickly

Now, I think he’s underplaying the pricing changes that will be favorable to many consumers, like the “Mostly Music” choice, but I encourage you to check out his post.

OK, technically, they didn’t approve it, they choose not to oppose it, but to subscribers this may be a difference without a distinction.  Here’s the press release from Sirius.  http://investor.sirius.com/ReleaseDetail.cfm?ReleaseID=301291

SIRIUS Satellite Radio (Nasdaq: SIRI) and XM Satellite Radio (Nasdaq: XMSR) today announced that the U.S. Department of Justice (DOJ) has informed the companies that it has ended its investigation into the pending merger of SIRIUS and XM without taking action to block the transaction. This decision means the DOJ has concluded that the merger is not anti-competitive and it will allow the transaction to proceed. SIRIUS and XM each obtained stockholder approval in November 2007. The pending merger is still subject to approval of the Federal Communications Commission.

Here’s the DoJ’s spin…http://www.usdoj.gov/opa/pr/2008/March/08_at_226.html

The Division’s investigation indicated that the parties are not likely to compete with respect to many segments of the satellite radio business even in the absence of the merger. Because customers must acquire equipment that is specialized to the satellite radio service to which they subscribe, and which cannot receive the other provider’s signal, there has never been significant competition for customers who have already subscribed to one or the other service. For potential new subscribers, past competition has resulted in XM and Sirius entering long-term, sole-source contracts that provide incentives to all of the major auto manufacturers to install their radios in new vehicles. The car manufacturer channel accounts for a large and growing share of all satellite radio sales; yet, as a result of these contracts, there is not likely to be significant further competition between the parties for satellite radio equipment and service sold through this channel for many years. In the retail channel, where the parties likely would continue to compete to attract new subscribers absent the merger, the Division found that the evidence did not support defining a market limited to the two satellite radio firms that would exclude various alternative sources for audio entertainment, and similarly did not establish that the combined firm could profitably sustain an increased price to satellite radio consumers. Substantial cost savings likely to flow from the transaction also undermined any inference of competitive harm. Finally, the likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband Internet devices, made it even more unlikely that the transaction would harm consumers in the longer term. Accordingly, the Division has closed its investigation of the proposed merger.

WASHINGTON and NEW YORK, Feb 29, 2008 — XM Satellite Radio and SIRIUS Satellite Radio today announced that the companies have agreed not to exercise their rights to terminate the Merger Agreement until May 1, 2008.

The closing of the pending merger remains subject to satisfaction of all applicable conditions, including approval from the Department of Justice and the Federal Communications Commission. For more information on the SIRIUS-XM merger, please visit www.XMmerger.com or www.SIRIUSmerger.com.

Interesting comments by Mr. K. at the Citigroup Global Entertainment, Media and Telecommunications conference in Phoenix on Tuesday.  Here are some highlight from Silicon Alley’s coverage.

“I can tell you there is no decision at the Department of Justice. Timing: I have no idea. I’m not going to give it a guess. This is a deal is ripe to be granted and we should be able to close. We will probably close the evening we get FCC approval. We have been waiting so long we are ready to close.”

On post-merger synergies: “I can tell you that it is in the hundreds of millions of dollars; the value of the efficiencies are greater than the market cap of one of the two companies,” Karmazin said.

“What is going to make us a winner is that we have the best radio on radio. I am betting that radio is going to continue to be a business. We are going to be a successful radio company and our content is going to drive it. The Howard Stern deal–and I didn’t do it, I walked into the company after it was done–I will tell you it more than pays for itself.”

He says don’t expect Congress to support royalties for terrestrial radio (as the music labels and the RIAA want) because it would be terribly unpopular in an election year.

OK, the headline is a little cheeky, but it is of interest to Backstagers that the topic of the merger came up at CES today as part of Chairman Martin’s address to CES attendees.  This report from the NYT, summarizes the discussion this way

XM-Sirius (NSDQ: SIRI) and Echostar-DirecTV: Shapiro attempted to draw Martin on whether approval of the XM-Sirius merger would bode well for a merger between Echostar (NSDQ: DISH) and DirecTV (NYSE: DTV). Martin wouldn’t talk about the pending approval of the satellite radio merger, but spoke about how XM (NSDQ: XMSR) and Sirius said they’d offer different subscription and content plans to consumers, allowing them more choice over the content they receive at a variety of price points. The implication was that this was an important declaration by the radio companies in terms of their chances of regulatory approval, and Martin said that it would be important for satellite TV companies to offer consumers more control and choice as part of any future merger plans.

Earlier this morning, Sirius and XM issued a joint press release that included quotes from various people including Cal Ripken, Jr., Wynton Marsalis, House Reps Connie Mack and Joe Baca, among others. It appears that they are trying to counter yesterday’s letter from Reps Conyers and Chabot that states they feel the merger was approved without full support at the Department of Justice.

Read the full Press Release here

Yesterday SIRI and XMSR had big drops around 3pm when reps John Conyers(D) and Steve Chabot(R) sent a letter to Attorney General Michael Mukasey not to rush approval of the merger. They feared that the assistant Attorney General might sign off on the deal even if there were objections from department staff. It appeared the congressmen, both friends with the NAB, were trying to stall the merger and hopefully get more politicos involved.

According to an AP article today, Stifel, Nicolaus & Co. analyst Blair Levin believes that the merger will be a close call but will get the green light anyway. Either way, the letter will not hold any weight with the Department of Justice, says Levin.

Keep up with the latest merger talks in our Merger Mania forum.

Checking out the merger site this evening, I came across this clever crossword puzzle that tests your knowledge of merger-related trivia,  http://www.siriusmerger.com/uploads/FINAL-Crossword.pdf  My personal favorite was 49 Down: a 3-letter “word” with the clue, Notorious Asserters of Balogna.  Hmmm, wonder how NAB could be merger-related?

In filings with the SEC this morning, both SatRad companies announced they will holding shareholder votes on the merger on Nov. 13th

http://money.cnn.com/news/newsfeeds/articles/djhighlights/200710040938DOWJONESDJONLINE000561.htm