The Federal Communications Commission earlier today released the text of its order approving the merger between XM Satellite Radio Inc. and Sirius Satellite Radio Inc. The media-regulating body signed off on the deal Friday by a vote of 3-2 along party lines.
For those of you who have been following the saga, not much is surprising. Among the agency’s findings:
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- “The transaction will benefit consumers by making available to them a wider array of programming choices at various price points and by affording them greater choice and control over the programming to which they subscribe”
- “There was insufficient evidence in the record to predict the likelihood of anticompetitive harms”
- The companies’ concessions must be honored for at least three years; these include a price freeze, a la carte programming, a set-aside of 8 percent of channel capacity to noncommercial and minority programmers, interoperable radios and an open manufacturing standard that allows any firm to make a satellite radio
- The companies can’t provide local content
- XM will pay $17.4 million and Sirius $2.2 million in fines for breaking FCC rules regarding broadcast interference
Here are some excerpts from the commissioners’ statements:
- Chairman Kevin J. Martin, a Republican: “I said at the time that the two companies announced their intent to merge that I thought they had a high hurdle to meet if they wanted to prove that the transaction would be in the public interest. It has taken some time, but I do believe that with the essential voluntary commitments they have made, the parties have met this burden.”
- Robert M. McDowell, a Republican: “Competition in the audio market has grown substantially in the past few years. Barely one generation removed from AM and FM radio and vinyl albums, we now have a still vibrant AM/FM dial, full of music, news and talk radio of all stripes, HD radio with its multicast streams of content, mp3 players, Internet radio and much more. When discussing this merger, it is important to keep in mind that satellite radio — both XM and Sirius combined — comprises only five percent of that audio marketplace.
- Michael J. Copps, a Democrat: “The majority’s argument is that it can stack up enough ‘conditions’ on the merged entity — spectrum set-asides, price controls, manufacturing mandates, etc. — to tip the scale in favor of approval. In essence, the majority asserts that satellite radio consumers will be better served by a regulated monopoly than by marketplace competition.”
- Jonathan S. Adelstein, a Democrat: “In April and June 2006, the commission launched an investigation into alleged noncompliant XM and Sirius satellite radio devices; and that fall, the commission learned that about widespread unauthorized use of terrestrial repeaters …. It is inconceivable to me that we would even consider approving such a merger with such a large and serious number of outstanding violations unresolved. That would never have crossed our minds if the transactions involved terrestrial broadcasters.”
Deborah Taylor Tate, a Republican who cast the swing vote on favor of the merger in exchange for the fines, did not release a statement.
— Kara Rowland
