John Ashcroft, devout Christian, is apparently a man of real ethics. He isn’t about to allow a merger between Sirius and XM to happen because it would be bad for broadcasters. Of course, he says this as he was hired by the NAB (National Association of Broadcasters) to “investigate” the intended merger between Sirius and XM.
Ashcroft, who served as head of the Justice Department for four years until January 2005, was hired by the National Association of Broadcasters to examine the acquisition.
The NAB, which represents traditional radio broadcasters, has been a fierce critic of the acquisition, now worth about $4.4 billion, since it was announced last week.
In a letter sent on February 27 to his replacement as attorney general, Alberto Gonzales, Ashcroft concludes “… the proposed Sirius/XM merger, which reduces the number of competitors from two to one, raises most serious competition concerns.”
Ashcroft compared the deal to the attempted takeover by satellite provider Echostar Communications Corp. of Hughes Electronic Corp., which would have reduced the competitors in the satellite television market in many areas from three to two.
“The Department recognized that reducing competition from three to two was anticompetitive and opposed the transaction, which was eventually abandoned,” he said.
He also draws comparisons with the attempted tie-up between Echostar and DirectTV Group Inc., in which the FCC reaffirmed its rule of not granting a single commercial license for satellite TV. That deal also wasn’t allowed.
“I would submit that a thorough study of consumer demands and preferences would show that terrestrial radio stations should not be considered part of the satellite radio market for the purposes of the review of the current merger …,” said the letter.
I submit that you have no idea what the hell you’re talking about Mr. Ashcroft, and I also note that there’s no mention of the fact that if they don’t merge, it’s pretty obvious that both companies will be out of business in a few years. Despite Sirius’ growth and XM’s stable stock price, neither company is doing well. XM isn’t growing as fast as it was, and Sirius is hemorrhaging money at an alarming rate.
I guess it’s better to let both companies just rot and die than to allow them to form one company that can sustain itself.
It’s amazing how someone can contort their views depending on who their employer of the moment is. I mean, considering Ashcroft shopped his services to both the NAB and to XM, you can only imagine that had Hugh Panero hired Mr. Ashcroft, we’d be hearing how great this merger is for consumers right now.
Here’s the full text of the infomercial script letter (via Orbitcast).
