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FCC comments cast doubt on Sirius (SIRI) merger with XM, Dow Jones deal

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Michael Copps, a member of the FCC, said that the tests for some upcoming mergers should be set higher. Two deals over which he showed special concern were the Sirius (NASDAQ: SIRI) merger with XM (NASDAQ: XMSR) and the News Corp (NYSE: NWS) purchase of Dow Jones (NYSE: DJ).

Mr Copps' worries about Dow Jones are simple enough. He is troubled that Mr. Murdoch will have such a large concentration of media in New York

He shows even more interest in the Sirius plan. The Wall Street Journal writes that "as one of five FCC commissioners, Mr. Copps will cast a vote on whether the Sirius-XM merger and Tribune sale should be allowed to proceed." Copps may want the satellite radio companies to give more guarantees on prices charged to consumers.

XM and Sirius stocks have both moved off lows as it appeared that approval for their merger looks more certain. The stocks are sill severely depressed. Copps comments may help push them down again.

While the satellite radio company merger may face more opposition than was anticipated recently, the firms still have a compelling argument about how competitive the marketplace is. They continue to lose money and, without some change in their structures, their debt loads could sink them. Perhaps someone will point that out to Copps.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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Last updated: November 23, 2009: 05:18 AM

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