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Isaac Brekken/AP
FCC Chairman Kevin Martin

FCC Head Wants Sirius–XM Merger

June 17, 2008 06:01 AM
by Anne Szustek
Kevin Martin announced Sunday he supports passage of the $3.8 billion agreement to unite America’s two biggest satellite radio broadcasters, making final approval likely.

30-Second Summary

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

The deal will not get official approval without vetting from the other four FCC commissioners, however. Analyst Jessica Zufolo told Bloomberg that a decision is likely in July.

The Federal Communications Commission chair said in a 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.

See Wall Street Journal coverage

Headline Link: ‘FCC Chief Recommends OK of Satellite Radio Deal’

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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