Posted on 07/24/2008 12:44:16 PM PDT by Wolfie
XM-Sirius merger OKd in fines plus booster-dump deal
Woo FCC with $19m in 'voluntary contributions'
XM Satellite Radio and Sirius Satellite Radio are nearing a final agreement with US regulators to approve their long-pending merger.
The companies agreed to pay millions of dollars in fines in order to grease the wheels of the Federal Communications Commission (FCC) for formal approval of their proposed monopoly.
Some officials and lawmakers are concerned that leaving only one company to rule satellite radio airwaves will lead to price-hikes and anti-competitive behavior. But XM and Sirius are approaching a final pact with the FCC that includes conditions to protect customers and pay millions in regulatory fines.
"I think it's fair to say an agreement in principle has been reached," FCC Chairman Kevin Martin told The Wall Street Journal. "We're still trying to work out the language."
Republican commissioner Deborah Tate cast a tie-breaking vote in favor of the deal in exchange for XM and Sirius agreeing to pay a total of about $19m to settle allegations of past compliance violations.
Those violations include constructing several unauthorized terrestrial repeaters to boost network transmission, and using excessive power levels in some radio units sold to consumers.
XM will make a "voluntary contribution" to the FCC of $17.2m, while Sirius is expected to pay $2.2m. The former received a greater fine because it kept the towers in operation after being informed of the violation by the FCC.
Within 60 days of adopting the decree, XM must shut down 50 booster towers and will have to either close down or bring into compliance an additional 50. Sirius must shut down or bring into compliance 11 booster towers, which the company claims to have already retired since October 2006.
The companies must also agree to additional concessions such as a-la-carte pricing, setting aside some of its spectrum for additional public interest channels, using an open standard for radio receivers, and extending service to Puerto Rico.
The FCC's two Democratic commissioners voted against the deal, and caution against further consolidation of the US media.
Antitrust authorities at the US Justice Department already approved the merger back in March. With the final hurtle cleared, the deal could close within a matter of days.
and if they raise thier rates people still have the choice of whether or not to subscribe. if the rates go to high and to many people dump the service then they won’t survive.
does it matter? satellite radio will be dead in 3 years any way.
Some monopolies are more equal than others.
*sigh* Bribes are awfully public these days, aren’t they?
Pretty stupid concern considering the altenatives, over the air broadcasts and online streaming, are free.
Just out of curiosity, why do you say that?
Yep. XM and Sirius finally found a way to outspend the NAB, who were bribing in the opposite direction.
Monopoly? There are radios all over the place.
Yes, but some shows are either satellite radio at 3:00am or online streaming...I would rather listen from my bed at 3:00am than sitting in front of the computer. Some shows on the east coast are not broadcast over local affilates here on the west coast. And, some of us live in rural areas where radio, especially AM band is almost impossible to get, due to AM drift. I love my XM radio.
True enough.
the industry has had a difficult time making a profit. people are not going to pay for something they can get for free. anyone with an ipod now can put on any song in the world they want and use it in their car. they can have complete control over what they listen too, not some radio producer.
you can get any baseball or football game now on cable. why listen to sports on the radio when you can view it for the roughly the same price?
that leaves talk shows as the only other draws for satellite radio. the howard sterns of the world are going to pull in some audience but its not going to be enough to make satellite radio survive. there are just too many other options now.
i will wager a donut he is in the broadcast business...probably a NAB member
Thanks.
Because I don't have a TV in my truck?
Gotta admit, if I had a couple million, that'd be what I'd be working on right now, as much of this is all there; immediate numbers of ratings, localized content, it's all not that far in the future.
Which is why this merger should have been approved last year. But the NAB has gotten their money's worth.
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