XM and Sirius File Merger Application With FCC

Hugh Panero, chief executive of District-based XM, which a month ago announced its intention to merge with Sirus.
Hugh Panero, chief executive of District-based XM, which a month ago announced its intention to merge with Sirus. (By Michael Williamson -- The Washington Post)
By Charles Babington
Washington Post Staff Writer
Thursday, March 22, 2007

The nation's two satellite radio companies formally asked the Federal Communications Commission this week to allow them to merge, launching a review process that is likely to last months and involve substantial teams of lawyers, lobbyists and executives.

XM Satellite Radio Holdings and Sirius Satellite Radio said yesterday that they had filed papers with the FCC late Tuesday, restating their position that the merger would benefit the public and not reduce competition in audio entertainment. XM of the District and Sirius, based in New York, announced their merger plans Feb. 19, but it took a month to file the 68-page application.

When the FCC licensed the two subscriber-based companies in 1997, it ordered them to remain separate. XM and Sirius say the commission should overturn the order because the industry has become dramatically more competitive in the past decade, especially with the growth of cellphones, Internet radio, MP3 players and other music-playing devices.

"The merger will not harm competition in any market," the application said. AM and FM radio companies and some consumer groups sharply disagree, and are urging the FCC and the Justice Department to prevent the merger.

The application repeats claims that XM and Sirius executives have made publicly but does little to explain how they would be met. Under a merged company, customers could choose to block channels they find objectionable and receive an unspecified credit on their monthly bill, it states.

"The combined company will also offer consumers the options of receiving either fewer channels at a lower price or more channels, including the 'best of both' networks, at a modest premium to the existing $12.95 per month price," the application says. But it is vague on how the two lineups might be mixed and transmitted. Customers "might no longer have to choose" between programs now on XM only -- such as Major League Baseball -- and those on Sirius only, such as the NFL.

The two companies would create more transmission capacity, the document said, by eliminating duplication. They now carry 12 identical news-oriented channels, such as CNN, and they have another 75 music-oriented channels that "overlap by genre," the application says.

© 2007 The Washington Post Company