Isaac Brekken/AP
FCC Chairman Kevin Martin

FCC Likely to Approve Sirius-XM Merger

July 18, 2008 04:35 PM
by Anne Szustek
FCC approval of the Sirius-XM merger hinges on the vote of one member, who will green light the deal pending a six-year price cap and airspace for public broadcasting.

30-Second Summary

Jonathan Adelstein, a Democratic commissioner for the Federal Communications Commission, announced that he will give the green light to the merger if the combined network allots one-fourth of its airtime to public and minority broadcasting, as well as not raise prices for six years.

Two members of the five-member FCC board of commissioners have already approved the deal: Republican Robert McDowell and fellow GOP member Kevin Martin, who is the board's chair.

Martin’s approval for Sirius’s buyout of XM hinged on the condition that the two radio providers cede control of 24 channels to not-for-profit and minority formats.

The Federal Communications Commission chair said in a June 17 statement, “As I’ve indicated before, this is an unusual situation. I am recommending … this transaction would be in the public interest.”

Given the streamlined operations, shareholders are likely to benefit from a merger. Owners of Sirius and XM stock OK’d the deal in November.

The traditional radio industry, which has been in stiff opposition to the merger since its nascent stages, had strong words for the FCC. “Given their systematic breaking of virtually every rule set forth by the FCC in their 11 years of existence, it would be curious if the Commission now rewards XM and Sirius with a monopoly,” said Dennis Wharton, executive vice president of the National Association of Broadcasters, in a press release.

But the Justice Department has also backed the merger, stating in March that, because the companies are in competition with traditional radio and digital downloads, there is sufficient competition to prevent Sirius and XM from raising prices monopolistically.

Headline Link: ‘XM-Sirius Merger Gets Conditional Go-Ahead'

Background: Past developments in Sirius–XM merger

Reactions: Statement from National Association of Broadcasters

Opinion & Analysis: Shareholders will likely benefit from merger

Reference: FindingDulcinea’s Web Guide to Radio

Related Topic: ‘Senate Votes to Overturn FCC Cross-Ownership Order’


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