updated 11:35 am EDT, Thu July 24, 2008
FCC Fines Sirius and XM
The Federal Communications Commission today fined satellite radio providers Sirius and XM in a step already recognized as a precursor to approving their long-anticipated merger. The ruling requires Sirius and XM to pay $2.2 million and $17.5 million respectively for allegedly violating FCC rules by continuing to run receivers and land-based repeaters that could potentially create interference while the FCC has decided on whether it will approve the union of the two companies.
The move, however, is known to be a merger condition set out by FCC Commissioner and Republican Deborah Tate, who is believed to be leaning towards approval for the deal but has asked that the satellite firms be punished for ignoring rules. Tate initially wanted a relatively modest fine of $8 million split between Sirius and XM but had her amount raised by FCC chair Kevin Martin after he believed it less than what the violations involved.
Securing Tate's vote is an essential last step for the merger, which was approved by the Department of Justice in March but has largely been unaddressed by the FCC for the 16 months since it was introduced.
The merger would leave the US with just one satellite radio provider and has drawn fire from both public interest groups and land radio providers, which have claimed a unified Sirius/XM would constitute a monopoly. Sirius and XM have said they compete against all other kinds of digital music and would self-impose measures to remain competitive, including a three-year subscription fee cap, by-the-channel station subscriptions, and reserving channels for public programming and minority-owned groups.