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FCC's Merger Grumblings Foil Sirius

Shares are whipsawed by worries about the XM deal's fate in Washington.

Sirius (SIRI) - Get Report and XM (XMSR) shares took a little jolt Thursday as regulators shared their opinions on the proposed $4 billion merger of the two satellite radio broadcasters.

In a briefing with reporters, Federal Communications Commission member Mike Copps said the XM and Sirius merger approval faced a "steep climb," according to a

Reuters

report.

Copps, one of the two Democrats on the Republican dominated commission, went on to say that "somebody's going to have to make a pretty powerful and potent demonstration that it serves the public interest," the

Reuters

report says.

Sirius immediately dropped a dime from its $3.54 intraday high after the

Reuters

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report came out. But an

AP

report had a more favorable take from FCC Chairman Kevin Martin, who repeated his stance on the merger, saying there was a "higher burden" to examine the transaction carefully.

"I would be concerned if they were trying to become a local broadcaster," Martin added, according to the

AP

.

Investors have followed the merger review process closely. Critics of the deal say the combination of the sole satellite radio companies would create a monopoly. But fans argue that satellite radio competes against a much broader field including conventional radio and devices like iPods.

The deal must get a thumbs up from both the FCC and the Justice Department, which is currently reviewing the antitrust implications of the merger.

Earlier this month, executives for the two companies said they have provided federal antitrust regulators with all the additional information that had been requested in a second round of inquiry. The companies said they were cooperating with the Justice Department in the merger review.

Sirius shares fell a penny to $3.41 and XM shares were down a quarter to $14.15 in afternoon trading Thursday.