Whitesburg KY
Partly cloudy
Partly cloudy

FCC chairman approves merger of XM and Sirius


The proposed merger of the nation’s two satellite radio broadcasters – bogged down in the regulatory process for over a year – has cleared a major hurdle: The Federal Communications Commission chief is recommending approval of the $3.8 billion deal.

FCC Chairman Kevin Martin made his recommendation earlier this week in exchange for a number of concessions, including turning 24 channels over to noncommercial and minority programming. That sets the stage for a final vote that could occur any time after Martin’s recommendation is circulated among his fellow commissioners.

The provision on noncommercial and minority programming along with several others – including a three-year price freeze for customers – persuaded Martin to support Sirius Satellite Radio Inc.’s buyout of rival XM Satellite Radio Holdings Inc. The deal would affect millions of subscribers who pay to hear music, news, sports and talk programming, largely free from advertising, in homes and vehicles.

The other four commissioners have kept their views on the deal largely to themselves. Unlike most FCC decisions, there is no clear indication how the vote will go.

Martin said the conditions will make the combination of the two companies good for consumers.

The companies also agreed to an “open radio” standard, meant to create competition among manufacturers of satellite radios, according to FCC officials who spoke on condition of anonymity because the agreement had not yet been made public.

Other conditions are similar to promises made by Sirius CEO Mel Karmazin last year.

They include a three-year freeze on prices and packages that include programs from both services, including a so-called “a la carte” offering that would be available within three months of the close of the deal.

Karmazin has pledged that the combined company will offer pricing plans ranging from $6.99 per month for 50 channels offered by one service, up to $16.99 a month, where subscribers would keep their existing service plus choose channels offered by the other service.

Karmazin also said he will let customers choose and pay for only the channels they want. The “a la carte” option will require new radios, the companies have said.

In addition, the companies have pledged to offer radios that are capable of receiving both services within one year.

Washington-based XM has about 9 million subscribers while New York City-based Sirius has about 8.3 million subscribers.

Leave a Reply