Washington - Consumer advocacy groups including the Consumer Federation of America, Consumers Union and Free Press on Monday urged the Federal Communications Commission (FCC) to reject the proposed merger of satellite radio providers XM (NASD: XMSR) and Sirius (NASD: SIRI), saying the deal would eliminate competition and negatively impact consumers.

"The proposed XM-Sirius merger is not in the interest of American consumers," said Dr. Mark Cooper, director of research for the Consumer Federation of America and lead author of the report.

"Leaving one company to monopolize the satellite radio industry would result in higher prices and fewer choices -- with no foreseeable public benefit."

The groups say the companies have not made a sufficient case that the FCC should end its explicit prohibition on mergers between satellite licensees.

They also argue that the deal will reduce the number of channels and formats available, resulting in fewer cost-saving incentives and a dramatic drop in spending on talent and retail.

The proposed $5 billion merger was recently approved by shareholders of both companies, and is currently under review by the FCC and the Justice Department.

Related Links:
http://www.freepress.net/docs/cfacufpexparte11-26.pdf (PDF)

http://www.consumerfed.org

http://www.consumersunion.org