FCC Gets Serious About Satellite Radio

Finally, after 520 days of waiting, the FCC has reached a tentative deal to propose the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. Of course, there’s a catch. Commissioner Deborah Taylor Tate, the last of the FCC reviewers to vote on the deal, is expected to give her vote in favor of the merger in exchange for a $20 million fine paid jointly by the two companies. XM is expected to pay the bulk of the fine (about $17.5 million) and Sirius will cover the remainder (about $2 million). Tate’s vote is reliant on the release of a consent decree, which will settle claims that the companies produced satellite radio transmitters that exceeded FCC power limits as well as placed booster towers in unapproved areas. Tate has suggested many other conditions for the deal, which will not have a great effect on previous terms of agreement. In June, the companies consented to a 3-year price freeze for their customers after the merger. They also promised that 8% of their programming (about 24 channels) would be reserved for educational and minority broadcasts. As for technicalities, exact details of the merger are not yet known because the FCC and lawyers are still working on the finishing touches. One known detail is that the companies will not be required to include technology in their radios, which would pick up digital signals from local stations—a downside for newly digital broadcasters. Now that the merger has been approved, one would foresee smooth sailing from here. However, Wall Street Journalreporter, Heidi Moore speculates that there could be more hindrances in the two companies’ futures. “[The National Association of Broadcasters] have done everything in their power to stop [the merger] from happening. There is no reason to believe that will stop happening.”
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