US regulators approve Sirius-XM merger to create satellite radio monopoly
26 July 2008
Sirius Satellite Radio Inc.'s purchase of XM Satellite Radio Holdings Inc was approved with conditions by US communications regulators on Friday, clearing the way for a deal that will leave just one satellite radio service in the country. This brings to an end the protracted rounds of approvals towards the longest running merger in American corporate history spread over almost a year and half.
Although there had been speculation earlier this week of such an approval materializing, it had been based on the assent of Democrat FCC commissioner Jonathan Adelstein who had promised to approve the deal subject to certain conditions. (See: XM Radio - Satellite Radio closer to merger as FCC set to approve deal conditionally)
Even though Adelstein finally voted against the buyout, the deal managed to sail through 3-2 with the tiebreaker coming Friday night from Republican commissioner Deborah Taylor Tate. Fellow Democrat Michael Copps joined Adelstein on the minority opposing side. Joining Kevin Martin and Tate in approving the deal was Republican commissioner Robert McDowell.
"They kept each other on their toes," Adelstein said of the two companies as he explained his opposing stance. "I hope they keep their edge and don't become a fat and happy monopoly."
"I think it's going to be, in the end, a good thing for consumers and be in the public interest," said FCC chairman Martin." Consumers will enjoy a variety of programming at reduced prices and more diversified programming choices."
Subscribers will not have to buy new radios to receive a mix of programming from both services, according to the companies. But if they want to pursue a special pay-per-channel a la carte option, they will need new sets.
Tate had insisted that the companies settle charges that they violated FCC rules before she would approve the deal. The companies agreed this week to pay $19.7 million to the US Treasury for violations related to radio receivers and ground-based signal repeaters.