Just another day in the life of the Bush administration money train...
Ashcroft Offered Services Before Being Hired By NAB
March 03, 2007: 07:18 PM EST
(Updates with comment from Ashcroft spokeswoman)
By Corey Boles Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Former Attorney General John Ashcroft, who sent a letter this week to his successor Alberto Gonzales blasting the proposed merger of Sirius Satellite Radio Inc. (SIRI) and XM Satellite Radio Holdings Inc. ( XMSR), approached XM in the days after the merger was announced offering the firm's consulting services, a spokesman for XM said Saturday.
The spokesman said XM declined Ashcroft's offer to work as a lobbyist for the company.
Ashcroft was subsequently hired by the National Association of Broadcasters, which is fiercely opposed to the merger. On its behalf he conducted a review of the effects on competition if the two satellite radio companies were allowed to merge.
In a letter sent to Gonzales Feb. 27, Ashcroft concluded the merger would have a significant negative impact on competition in the market and urged the current Attorney General to withhold approval for the merger.
"After the merger was announced, Mr. Ashcroft's firm contacted us about hiring him to assist us," said Nathaniel Brown, a spokesman for XM. "We declined. Apparently the National Association of Broadcasters opted to pay him to parrot their views."
Dennis Wharton, the NAB's executive director, said Saturday, "NAB approached former Attorney General Ashcroft to review the proposed XM-Sirius merger and offer his honest opinion as an antitrust expert. We are not aware of any alleged previous discussions between Mr. Ashcroft and officials at either satellite radio company."
A revelation that Ashcroft was shopping his services to both sides of the debate over the merger may raise doubts in the eyes of some as to the rigor of his review conducted on behalf of the NAB.
"We are often in contact with opposing interests on almost every major antitrust issue when the news first breaks," said Juleanna Glover Weiss, a spokeswoman for Ashcroft. "Working for the National Association of Broadcasters was a clear call for Ashcroft - there are simply no substitutes in the marketplace for the product XM and Sirius sell."
Ashcroft's letter was forwarded by the NAB to lawmakers on the House and Senate Judiciary Committees.
In the letter, Ashcroft concludes "...the proposed Sirius/XM merger, which reduces the number of competitors from two to one, raises most serious competition concerns."
He compares the current merger to the attempted takeover by satellite provider Echostar Communications Corp. (DISH) of Hughes Electronic Corp. In that instance, he said, a merger would have reduced the competitors in the satellite television market in many areas from three to two.
"The Department recognized that reducing competition from three to two was anticompetitive and opposed the transaction, which was eventually abandoned," he said.
He also draws comparisons with the attempted tie-up between Echostar and DirectTV Group Inc. (DTV), in which the FCC reaffirmed its rule of not granting a single commercial license for satellite TV. That deal also wasn't allowed.
"I would submit that a thorough study of consumer demands and preferences would show that terrestrial radio stations should not be considered part of the satellite radio market for the purposes of the review of the current merger...," said the letter.
The companies' main argument for the deal being approved is that, while they are the only two satellite radio companies, they are in fact competing against the range of audio media including traditional radio, HD radio, Internet-based radio and applications like Apple Inc.'s (AAPL) iPod.
While neither panel has authority to block the deal, the House Judiciary Committee's newly formed Antitrust Task Force has already held a hearing into the matter.
Next week it is the turn of the House Commerce Committee's telecommunications subcommittee, headed by Massachusetts Democratic Rep. Edward Markey.
The merger must receive approval of both the Department of Justice's antitrust unit and the Federal Communications Commission. The latter would have to change its rules to allow one company to hold the only satellite radio license.
As Attorney General, Gonzales has ultimate responsibility for the Department of Justice, although Assistant Attorney General Thomas O. Barnett is in charge of the department's antitrust unit.
Ashcroft served as head of the Justice Department for four years until January 2005. He then set up the lobby firm The Ashcroft Group LLC.
According to the Web site opensecrets.com, the firm had revenue of $2.34 million in 2006. The NAB isn't listed as a client of the firm last year.
Clients of the firm included Ebay Inc. (EBAY), which paid $60,000 and Oracle Corp. (ORCL), which paid $480,000 to the firm for its services.
The NAB, which represents traditional radio broadcasters, has been a virulent critic of the $13 billion merger since it was announced last week.
-By Corey Boles, Dow Jones Newswires
Ashcroft Offered Services Before Being Hired By NAB
March 03, 2007: 07:18 PM EST
(Updates with comment from Ashcroft spokeswoman)
By Corey Boles Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Former Attorney General John Ashcroft, who sent a letter this week to his successor Alberto Gonzales blasting the proposed merger of Sirius Satellite Radio Inc. (SIRI) and XM Satellite Radio Holdings Inc. ( XMSR), approached XM in the days after the merger was announced offering the firm's consulting services, a spokesman for XM said Saturday.
The spokesman said XM declined Ashcroft's offer to work as a lobbyist for the company.
Ashcroft was subsequently hired by the National Association of Broadcasters, which is fiercely opposed to the merger. On its behalf he conducted a review of the effects on competition if the two satellite radio companies were allowed to merge.
In a letter sent to Gonzales Feb. 27, Ashcroft concluded the merger would have a significant negative impact on competition in the market and urged the current Attorney General to withhold approval for the merger.
"After the merger was announced, Mr. Ashcroft's firm contacted us about hiring him to assist us," said Nathaniel Brown, a spokesman for XM. "We declined. Apparently the National Association of Broadcasters opted to pay him to parrot their views."
Dennis Wharton, the NAB's executive director, said Saturday, "NAB approached former Attorney General Ashcroft to review the proposed XM-Sirius merger and offer his honest opinion as an antitrust expert. We are not aware of any alleged previous discussions between Mr. Ashcroft and officials at either satellite radio company."
A revelation that Ashcroft was shopping his services to both sides of the debate over the merger may raise doubts in the eyes of some as to the rigor of his review conducted on behalf of the NAB.
"We are often in contact with opposing interests on almost every major antitrust issue when the news first breaks," said Juleanna Glover Weiss, a spokeswoman for Ashcroft. "Working for the National Association of Broadcasters was a clear call for Ashcroft - there are simply no substitutes in the marketplace for the product XM and Sirius sell."
Ashcroft's letter was forwarded by the NAB to lawmakers on the House and Senate Judiciary Committees.
In the letter, Ashcroft concludes "...the proposed Sirius/XM merger, which reduces the number of competitors from two to one, raises most serious competition concerns."
He compares the current merger to the attempted takeover by satellite provider Echostar Communications Corp. (DISH) of Hughes Electronic Corp. In that instance, he said, a merger would have reduced the competitors in the satellite television market in many areas from three to two.
"The Department recognized that reducing competition from three to two was anticompetitive and opposed the transaction, which was eventually abandoned," he said.
He also draws comparisons with the attempted tie-up between Echostar and DirectTV Group Inc. (DTV), in which the FCC reaffirmed its rule of not granting a single commercial license for satellite TV. That deal also wasn't allowed.
"I would submit that a thorough study of consumer demands and preferences would show that terrestrial radio stations should not be considered part of the satellite radio market for the purposes of the review of the current merger...," said the letter.
The companies' main argument for the deal being approved is that, while they are the only two satellite radio companies, they are in fact competing against the range of audio media including traditional radio, HD radio, Internet-based radio and applications like Apple Inc.'s (AAPL) iPod.
While neither panel has authority to block the deal, the House Judiciary Committee's newly formed Antitrust Task Force has already held a hearing into the matter.
Next week it is the turn of the House Commerce Committee's telecommunications subcommittee, headed by Massachusetts Democratic Rep. Edward Markey.
The merger must receive approval of both the Department of Justice's antitrust unit and the Federal Communications Commission. The latter would have to change its rules to allow one company to hold the only satellite radio license.
As Attorney General, Gonzales has ultimate responsibility for the Department of Justice, although Assistant Attorney General Thomas O. Barnett is in charge of the department's antitrust unit.
Ashcroft served as head of the Justice Department for four years until January 2005. He then set up the lobby firm The Ashcroft Group LLC.
According to the Web site opensecrets.com, the firm had revenue of $2.34 million in 2006. The NAB isn't listed as a client of the firm last year.
Clients of the firm included Ebay Inc. (EBAY), which paid $60,000 and Oracle Corp. (ORCL), which paid $480,000 to the firm for its services.
The NAB, which represents traditional radio broadcasters, has been a virulent critic of the $13 billion merger since it was announced last week.
-By Corey Boles, Dow Jones Newswires
