tion of what he or she will pay for satellite radio. And the evidence will come from the parties' documents and an evaluation of how and why consumers choose to spend their money on satellite radio. Thank you very much. I would be glad to take any questions. [The prepared statement of Mr. Biggio follows:] PREPARED STATEMENT OF CHARLES E. BIGGIO STATEMENT OF CHARLES E. BIGGIO WILSON SONSINI GOODRICH & ROSATI, PC BEFORE THE ANTITRUST TASK FORCE COMMITTEE ON THE JUDICIARY UNITED STATES HOUSE OF REPRESENTATIVES CONCERNING COMPETITION AND THE FUTURE OF DIGITAL MUSIC FEBRUARY 28, 2007 Mr. Chairman, I am Charles E. Biggio, a partner in the law firm of Wilson Sonsini Goodrich & Rosati. I would like to thank the Chairman, the Ranking Member and the Members of the Committee for inviting me to testify on the antitrust aspects of the merger between XM and Sirius. I have practiced antitrust law for over 20 years, including three years (from 1995 to 1998) at the Antitrust Division of the Department of Justice, first as Senior Counsel to the Assistant Attorney General and then as Acting Deputy Assistant Attorney General. My focus both in private practice and at the Antitrust Division has been merger review. While at the Antitrust Division, I devoted substantial time to the wave of radio mergers that followed the enactment of the 1996 Telecom Act.1 This merger raises important policy and law enforcement considerations. There is no doubt that XM and Sirius have been vigorous competitors for subscribers, talent and distribution. Indeed, I do not understand the parties to be arguing that the merger should be approved because XM and Sirius do not compete. Moreover, XM and Sirius sell something that is different from other media, and so it is plausible that satellite radio is a market unto itself. If so, this would be a “2-to-1” merger and would be patently unlawful under existing precedent. At the same time, there can be no denying that consumers have an increasing number of alternatives vying for their listening time. It is possible that these alternatives are in the same relevant antitrust market as satellite radio. If so, this merger may in fact raise no antitrust concerns. Whether the combination of XM and Sirius is a "2-to-1" merger or a merger in a much larger market is a question of fact. Right now, we do not have all the facts necessary to determine the legality of the merger. 1 Although in private practice I have represented various terrestrial radio firms from time to time, I am providing this testimony on my own behalf, and not on behalf of any client. The facts will come out. The facts developed at hearings, like the one held here today, will help the process along. However, merger review is essentially a law enforcement exercise, and the enforcement agencies - the Antitrust Division in particular, along with the FCC - are best equipped to find the relevant facts. My recommendation is that no firm conclusions be formed about this merger until the agencies have completed their review. I outline below the antitrust principles applicable to this merger and try to identify the key issues that should be examined in evaluating whether the XM/Sirius merger is likely to harm consumers. HSR Procedure This merger, like most substantial M&A transactions, is subject to the pre-merger notification and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. XM and Sirius must provide notice to the Antitrust Division of the Department of Justice and the Federal Trade Commission. Although the Antitrust Division and the FTC share merger enforcement responsibility as a general matter, I expect that the Antitrust Division, and not the FTC, will review this transaction, given the Antitrust Division's prior experience with similar mergers (e.g., DirectTV/Echostar and numerous terrestrial radio mergers). The initial waiting period under HSR will be 30 days. Given the obvious competitive overlaps between XM and Sirius, I expect the Antitrust Division at the end of the initial waiting period to issue a request for additional information a so-called Second Request - to both XM and Sirius. The issuance of a Second Request defers the ability of the merging parties to consummate their transaction until 30 days after they have provided the Antitrust Division with the requested information. Ordinarily, it takes at least several months to comply with a Second Request. After all waiting periods have expired, HSR would no longer prevent XM and Sirius from completing their merger. However, as a practical matter, the timing of the HSR process will be determined by the timing of the FCC's review. The FCC's review is not limited by the 30-day waiting periods provided for by HSR. Thus, the parties do not have the ability to put the FCC "on the clock" as they do with the Antitrust Division. Consequently, the timing of the Antitrust Division's review of this merger likely will be determined by the review timeline at the FCC. As a technical matter, both the FCC and the Antitrust Division have the authority to apply Section 7 of the Clayton Act to mergers that are subject to FCC jurisdiction. In the past, the Antitrust Division and the FCC have worked together closely; however, as the primary enforcer of the antitrust laws, the Antitrust Division in most cases has taken the lead in analyzing the antitrust aspects of a merger. The FCC does apply a broader public interest standard in its review of mergers. However, while the FCC has obtained additional relief in connection with some transactions, I am not aware of a recent case in which there was substantial disagreement between the Antitrust Division and the FCC over the antitrust aspects of a merger. As with prior merger reviews, I would expect that the two agencies will cooperate in their review of the antitrust aspects of this transaction. Merger Enforcement Standards In reviewing mergers, the Antitrust Division applies Section 7 of the Clayton Act, which prohibits the acquisition of stock or assets “where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such |