FCC Chief To Recommend Clearing XM-Sirius Deal; Conditions Include A La Carte Subscription

Rafat Ali
Monday, June 16, 2008 4:07 AM

Everyone has "learned" it at the same time: U.S. Federal Communications Commission chairman Kevin Martin will recommend clearing Sirius Satellite Radio's ( NSDQ: SIRI) proposed purchase of rival XM Satellite Radio ( NSDQ: XMSR), and will remove the last big hurdle for the $5 billion deal, with a vote in as little as three weeks if the companies meet several conditions, reports WSJ, and others. Justice Department antitrust officials signed off on the deal, but FCC officials disagree with the assessment that there's enough competition from the likes of online radio, iPods and other sources.

The conditions that the deal may come under are designed to protect consumers from price increases for satellite-radio service and inflated prices for satellite receivers, the WSJ story says. Another condition calls for additional service options for three years to give consumers choice determine to which channels they want to subscribe, meaning a la carte, that would be available within three months of the close of the deal. Also, the FCC would also require the combined XM-Sirius to set aside 8 percent of its channels equally for non-commercial and minority-owned stations.

AP: The companies also agreed to an ''open radio'' standard, meant to create competition among manufacturers of satellite radios. The ''a la carte'' option will require new radios, the companies have said. In addition, the companies have pledged to offer radios that are capable of receiving both services within one year. An ''interoperable radio'' requirement was part of the two providers' license agreement 11 years ago, but the companies have never brought one to market, a point regularly brought up by merger opponents.

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