Saturday, 07/26/2008 - 12:07 pm
by Stefan Halley
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FCC approves Sirius-XM satellite radio merger
FCC gets off their butt and finally approves the merger between Sirius Satellite Radio and rival XM Satellite Radio in a $3.3 billion buyout.
On Friday, the Feds gave their approval for the two satellite companies to form one company in a 3-2 vote. Subscribers will benefit by being able to get both companies programming without having to buy a new radio.
The merger will have a subscriber base of over 18 million customers. The terrestrial radio industry fought long and hard to keep this merger from happening and helped draw out the process. Other critics argued that the merger will create a monopoly and will end up hurting customers instead of providing greater services at a cheaper price.
Current subscribers will be able to get all of the programming from both companies but if you want the special pay-per-channel a la carte option, you’ll have to get a new radio.
Under the terms of the agreement, XM will pay $17.5 million and Sirius will pay $2.2 million to resolve interference complaints and violations related to land-based signal repeaters the companies use.
The companies initially applied for the merger in March 2007. It took a year but the Justice Department agreed in March of this year without conditions. The DOJ agreed with XM and Sirius’s argument that the merger won’t create a monopoly since they compete with other forms of entertainment including digital radio, internet radio and mp3 players like Apple’s iPod and Microsoft’s Zune. It another four months for the FCC to iron out the details of the merger.
The companies agreed to a three-year price cap and 8% set-aside of full-time audio channels for public interest and minorty programming and they will adopt an open radio standard that will allow greater competition among manufacturers and increased features.