24/7 Wall St. spoke to Rep Gene Green of Texas. He is Congress’s most vocal opponent of the Sirius (NASDAQ: SIRI) merger with XM Satellite (NASDAQ: XMSR). He has been vilified by none other than Jim Cramer for working against the deal by suggesting strongly to the FCC that putting the two companies together would be wrong.
In our interview with Green he likened a merger of XM and Sirius to the DirecTV (NYSE: DTV) combination with Echostar (NASDAQ: DISH) which the FCC killed because it would represent a monopoly.
We asked Green whether he was concerned that one of the satellite radio companies might fail. Both have heavy debt and significant operating losses. Green did not appear to think that the financial problems of the companies had any bearing on the issue. He suggested that if one company fails, the FCC should auction off its spectrum to another company that might want into the business.
Green views the debt that Sirius and XM have built up as the cost of getting into the business. That may be his reason for any lack of sympathy about where the companies find themselves financially.
Green also thinks that one of the most interesting proposals being debated to move the merger along would be for the two companies to give up half of their spectrum once a business competition is complete. That would allow that FCC to conduct another auction, and, presumably, create yet another satellite radio company in the market.
Douglas A. McIntyre