NAB enlists Ashcroft for sat radio merger fight


WASHINGTON -- The National Association of Broadcasters retained some heavyweight legal talent in their battle to block the $4.8 billion XM-Sirius deal as it hired former senator and Attorney General John Ashcroft to help the industry in its battle.

Ashcroft wasted no time lobbying his successor, Attorney General Alberto Gonzales, as he sent a letter spelling out the antitrust harm the deal will cause.

"To create now a monopoly for a single licensee is to create a unitary dominant player who would have the incentive and ability to use monopoly rents to undermine competition in media and broadcasting," Ashcroft wrote. "As the department examines the market definition for this transaction, may I suggest that the law should require discounting greatly the claimed future competition from proposed, untested, nascent technologies."

Ashcroft points to the DirecTV-EchoStar deal that was blocked by the FCC and the Justice Department during his tenure as an example of the type of analysis that needs to be done on the XM-Sirius deal.

"The department recognized that reducing competition from three (including cable) to two was anitcompetitive and opposed the transaction, which was eventually abandoned," he wrote. "A similar analysis should determine that the proposed Sirius-XM merger, which reduces the number of competitors from two to one, raises most serious competitive concerns."

Sirius and XM contend that the market isn't just satellite radio but everything from satellite radio through traditional radio to the iPod.

The view is disputed by broadcasters and other opponents of the transaction who contend that the market is limited to the two services.

NAB was not the first call for Ashcroft as the former attorney general also peddled his services to at least one of the principals in the merger, according to an XM official.

"It looks like Ashcroft was prepared to support the merger before he was against it," said XM spokesman Nathaniel Brown. "After the merger was announced, he called about assisting us, but we declined."