Final approval given to merger of US satellite radio firms
US regulators formally approved the long-delayed billion-dollar merger of the nation's only two satellite radio companies, combining Sirius and XM into a single network with 18 million subscribers, the FCC said on Saturday.
By Agencies |
WASHINGTON: US regulators formally approved the long-delayed billion-dollar merger of the nation's only two satellite radio companies, combining Sirius and XM into a single network with 18 million subscribers, the FCC said on Saturday.
The Federal Communications Commission, in a 3-2 vote Friday by its commissioners, approved Sirius Satellite Radio's 3.3-billion-dollar buyout of XM Satellite Radio, ending about 16 months of regulatory limbo for the satellite radio pioneers.
Company executives have long argued that the merger would lead to major cost savings and the first-ever profits in the fledgling industry.
"The merger is in the public interest and will provide consumers with greater flexibility and choices," FCC chairman Kevin Martin said in a statement confirming the final vote.
"It will also spur innovation and advance the development and use of interoperable radios, bringing more flexible programming options to all subscribers."
The vote reportedly fell along party lines, with the FCC's three Republicans voting in favor of the controversial merger and the two Democrats opposing.
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The top US communications regulator, however, attached conditions to the decision. The firms agreed to a three-year cap on prices, reserved eight percent of their broadcast capacity for minority and non-commercial programming, and agreed to pay 19.7 million dollars for previous FCC violations, tech-news website CNET reported.
The deal was approved by XM and Sirius shareholders last December, when Sirius had more than 8.3 million subscribers compared with nine million for XM.
The FCC approval marks the final regulatory hurdle needed for the merger, which passed antitrust scrutiny by the Justice Department in March.
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When the companies first began publicly discussing the merger, in February 2007, the deal was valued at 13 billion dollars. Some critics of the deal argued that a combined satellite group would form a monopoly that would benefit from sharing the same broadcast stars and could bring an end to rival bidding wars for top talent.
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They have also warned that the FCC approval would be an about-face from rules formulated in 1997, when the companies were given the new satellite radio licenses with the condition that they never merge, according to the Washington Post. Sirius broadcasts over 130 digital-quality channels, including 69 channels of commercial-free music, and counts the controversial star Howard Stern among its broadcasters.
XM boasts over 170 digital channels and offers a range of sports, music, news and talk radio. Both XM and Sirius offer devices that allow subscribers to listen to programs in their cars.
Since 2001, satellite radio has grown from a niche medium into a larger phenomenon across the United States. Its total audience reach is around 10 percent of all Americans and some seven percent of car-drivers, according to Sirius and XM.
The subscription fees starting at about 12 dollars per month allow consumers to get broadcasts of specific themed programs, ranging from country music to hard rock to talk radio.
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