updated 01:25 am EDT, Sat July 26, 2008
FCC Approves Sirius XM
The US Federal Communications Commission in an evening decision has approved the merger between satellite radio providers Sirius and XM, ending a 16-month delayed process. The decision quickly follows an agreement by the FCC to issue a $20 million combined fine against the two companies for violating interference regulations as a condition for persuading the lone official still undecided on the deal, FCC Commissioner Deborah Tate. The Department of Justice had already approved the deal from an antitrust perspective in March.
The combined satellite radio provider will have to agree to a three-year ceiling on subscription costs, produce dual-format tuners that work with either network within a year, as well as allow the option of subscribing a la carte instead of through bundles. About eight percent of all stations must also be run by either minority-owned or public interest groups, shifting the balance away from the nearly all-commercial emphasis both Sirius and XM share today. In the future, the FCC is also expected to inquire as to whether satellite radio receiver makers should be mandated to include HD Radio tuners as proposed by terrestrial radio groups, which claim that a larger, unified satellite radio provider would equate to a monopoly.
No precise schedule has been given by Sirius or XM for when the two will finish merging their operations, although it's expected that the two will run their individual networks side-by-side in the near future.
A merger creates a stronger competitor in digital music, according to past statements by the radio providers' officials. Both have argued that a lone satellite radio network wouldn't constitute a monopoly as it has to compete against iPods, Internet streaming, and land-based radio. Portable media players have surfaced in recent years that build in satellite radio tuners, while a large number of home theater receivers and in-car stereos now either include at least one satellite radio network's service either built-in or as an option through an attachment.