FCC Gives Green Light To XM-Sirius Merger

It’s finally done. After more than one year and 158 days following the announcement of the merger in Feb. ’07, and a slew of concessions later – the Federal Communications Commission has officially granted permission for the only two U.S. satellite radio operators, Sirius Satellite Radio Inc. (SIRI) and XM Satellite Radio Holdings Inc. (XMSR) to merge.

According to WSJ – the Federal Communications Commission voted 3-2 to approve Sirius $3.6 billion buyout of its rival XM Satellite Radio with the tie-breaking vote coming from Commissioner Deborah Taylor Tate.

The decision was delayed Friday by an impasse on the negotiations between two Republican commissioners. Commissioner Deborah Taylor Tate, notes WP, refused to vote until FCC Chairman Kevin J. Martin cast his own deciding vote to penalize the companies for violating some technical rules. The hold-up was resolved when Tate formally voted in favor of the deal. The approval was final once both companies agreed to pay a combined $19.7 million to the U.S. Treasury. The fines, levied because of radio signal interference and tower violations.

XM and Sirius say they will have a new generation of radio receivers, called “à la carte,” on store shelves within three months and also freeze subscription fees for three years, while setting aside a swath of channels for public broadcasting and minority programming.

I am pleased that before acting on this merger, the Commission first finalized our enforcement proceeding against two companies that have flagrantly violated FCC rules and regulations, Ms. Tate said in a statement.

The combination of both co’s will lead to more programming choices in terms of channel packages and better pricing for 18 million subscribers. The merger however, has been heavily criticized by the broadcasting industry, lawmakers and interest groups – arguing the merger would create a monopoly.

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