The approval process was held
up by a deadlock among FCC top brass, where commissioners’ votes split
along party lines except for that of republican Commissioner Deborah Taylor
Tate. She announced her support in favor of the merger Thursday, with a final
deal gaining approval Friday night.
In order to assuage fears of a monopoly, XM-Sirius will be held to a number
of restrictions governing the way it operates. Subscription prices will be
capped for three years after joining and the company is required to offer
interoperable radios compatible with both XM and Sirius networks.
Other restrictions include a stipulation to dedicate 8 percent of its
capacity -- approximately 24 channels -- to alternative and educational
programming, designed to “enhance the diversity of programming available to
consumers.” Within the next three months, consumers will also receive a “number
of new programming packages,” including the ability to select stations on an a
la carte basis, when combined with an appropriate receiver (also ordered to
be available within three months).
In an unusual turn of events, the
agreement (PDF) directs the merger all the way down to an exact price for
subscription offerings. XM-Sirius’ price cap for basic programming is $12.95 a
month, and a combined “best of” package will be available for $16.99. A “mostly
music” package will be available for $9.99 per month, and a family-friendly
programming package will be prices at $11.95 or $14.95 per month, depending on
“The applications of XM and Sirius satellite radio to merge did not present the
Commission with an easy case,” said FCC Chairman Kevin J. Martin in a statement
(PDF) released Monday. “I said at the time that the two companies announced
their intent to merge that I thought they had a high hurdle to meet … It has
taken some time, but I do believe that with the essential voluntary commitments
they have made, the parties have met this burden.”
Dissenting Commissioner Michael J. Copps spoke
out against the decision (PDF), accusing the FCC of “[stacking] up enough
‘conditions’ on the merged entity … to tip the scale in favor of approval.”
“After cutting through all the heat and noise and lobbying this proceeding
has generated,” he said, “we are left with the unshakable reality of a
merger-to-monopoly in a market that could sustain competition.”
Both XM and Sirius received their satellite radio licenses in 1997, on
condition that they never merge. Despite that, the merger gained
the Justice Department’s blessings in March, and FCC Chairman announced
his support last June.
quote: One concern voiced by some subscribers regards the Sirius lifetime subscription: for a one-time fee, Sirius subscribers were able to obtain a lifetime subscription for a receiver. This subscription is tied to the individual receiver, and there was a concern that the subscription may not transfer to a new universal receiver. However, Sirius' FAQ page regarding the merger states that "Any plan you sign up for now will be honored by the merged company." As they also have guaranteed that no radio will become obsolete, it is likely that this concern will be addressed via some new, merged signal.
quote: Any notes on what will happen to users that have the SIRIUS lifetime subscriptions? Do they still get all the channels for one fee? No new ones? Basic package only?
quote: We guarantee no radio will become obsolete. Your current radio will continue to provide you with the programming you enjoy, whether you keep your current service or change to a new subscription plan.