congress.JPGOn it's face, the fact that a letter arrived at the FCC from two democrat representatives would only mean bad news for the proposed merger of Sirius and XM Satellite Radio. After all, whether we like it or not, the merger issue seems to fall along party lines within the FCC, and in many past filings, the democrat side of the aisle has seemed to be more in favor of major concessions should the merger be allowed.

This letter however could actually be good news for the merger. The concessions sought deal with pricing guarantees and open access. Both issues seem to have very workable solutions in terms of implementation and do not strip away synergies that make the deal less attractive. Sirius and XM have already outlined A-La-Carte pricing, and would seem to be open to the concept of a price freeze for a specified period of time. On open access, the theory is sound, but mechanics are a bit more cumbersome. Open access is something that has a high potential of getting somewhere if the FCC decides that the issue is important enough.

This letter, from high profile congressional representatives gives ammunition to the merger being approved on terms that would protect consumers while at the same time being street friendly from an investment standpoint. If indeed spectrum concessions were being sought by some of the FCC commissioners, a letter such as this helps deflect such positions. In particular it is not what is written in the letter as much as who the letter is from that can be viewed as positive in merger terms.

The FCC has had the proposed merger on their plate for 410 days.

Position - Long Sirius, Long XM