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So, it's done: Sirius has completed its acquisition of XM, forming Sirius XM Radio with more than 18.5 million subscribers, making it the second-largest radio business in the US. The new company, headquartered in New York, expects to save about $400 million in 2009 while earning $300 million. If you're a drooling investor, don't go charging up to the champagne room just yet -- analysts are pointing out that neither company has ever posted a profit, and losses are in the billions. Anyway, can we move on to all the new, shiny Sirius XM receivers now, please?
In a somewhat unsurprising move, the FCC has approved the merger of Sirius and XM after protracted -- and incredibly boring -- multi-year negotiations. The Federal Communication Commission decided tonight to allow a deal that will bring the two satellite radio providers together, creating a combined subscriber base of roughly 18 million users. The deal isn't without catches, however, with the Commission stating that the companies must cap prices for three years following the merger, allow subscriber choice on content, and lower fees for channel packages. FCC head Kevin Martin seemed pleased with the final outcome, stating, "Consumers will get to enjoy the best of the programming on both services." You know who wasn't so stoked? Clear Channel.
We basically knew the FCC was going to approve the XM / Sirius merger after the DoJ approved it earlier this year, and it looks like the communications agency is just about ready to sign off -- the Wall Street Journal is reporting that a majority of FCC commissioners are close to approving the deal. Word is that XM and Sirius will have to fork over an additional $20M to make it happen and agree to several enforcement terms, but it's all up in the air until this goes official. Let's hope that's soon -- after a historically long delay, it looks like there's finally some light at the end of the tunnel.
Even though the Justice Department has approved the XM / Sirius merger and the FCC's approval is all but sure to follow, those pesky fools at NAB just won't go down without a fight -- the organization is demanding that FCC's approval be postponed until certain documents are turned over by the agency. NAB says the paperwork shows "apparent wrongdoing" by Sirius and XM officials in including FM transmitters in radios and terrestrial repeaters, and it met with FCC officials on Tuesday to make its claim. There's no word on how effective any of this is going to be, but we'll give it to NAB for being tenacious, at least -- now please, go away.
While the FCC hasn't announced any decision, the Associated Press says that its chairman will recommend approval of the $5 billion merger between XM and Sirius. Kevin Martin does so, however, on the condition that the two satellite broadcasters freeze consumer prices for three years and turn over 24 channels (that's 8% of their combined satellite capacity) to "noncommercial and minority programming." The merged giant must also offer an "open radio standard" meant to create competition amongst radio manufacturers and an "a la carte" service that would allow customers to only pay for the channels they want as long as they purchase new radios. Speaking of those non-existent radios, the two claim that Interoperable radios capable of receiving both XM and Sirius broadcasts would be available "within one year." With DoJ Antitrust approval out of the way, all that's left now is to circulate Martin's recommendation for final vote from the FCC's four other commissioners -- a vote on a merger which, as strange as it seems, was expressly prohibited by the FCC when it licensed the satellite radio industry back in 1997.
With that little Department of Justice business out of their way, Sirius and XM have unsurprisingly been quick to start chatting up the all-important FCC, and a recent filing from the agency has now revealed that lawyers from the two companies have met with none other than FCC Chairman Kevin Martin himself, along with other higher-ups. Even more interesting, however, is that the same filing also includes a full rundown of the companies' proposed post-merger pricing plans, which don't appear to have changed much from those detailed way back in the early days of the merger. Starting with the basics, the Sirius and XM "Everything" plans will hang on to the same $12.95 per month price tag, and include approximately 130 and 170 channels, respectively. From there, each service has A La Carte options starting at $6.99 a month (with additional channels costing 25 cents apiece), along with the usual package options ranging in price from $9.99 for the Mostly Music and News, Sports and Talk bundles to $16.99 for the "Sirius Everything & Select XM" or "XM Everytyhing & Select Sirius" packages. Be sure to hit up the PDF available at the link below for the complete rundown.
Apparently Clear Channel's new motto is "if you can't beat 'em, make life suck on the other side of the merger." The broadcast giant has dropped a whole big list of requests on the FCC to impose as conditions upon XM / Sirius for a merger, not the least of which is asking for broadcast decency rules be applied to satellite radio. Clear Channel feels the competitive threat of satellite radio could be mitigated a bit if the "edgy" content (Howard Stern) ceased to make terrestrial radio's edgy stuff look weak by comparison. Of course, the big difference is that XM and Sirius are paid subscription services, and we're guessing they're going to pound the "but HBO can do it" argument for all they've got, but it seems like these days no request is out of reach for terrestrial radio: Clear Channel also wants another satellite radio competitor, 5 percent "public interest" radio, and zero local programming or local advertising.
Well, it's only been a couple hours since the DOJ officially approved the XM / Sirius merger, and while we're a little surprised at how low-profile the two satellite radio services are being about the decision, there's nothing at all shocking about NAB's reaction -- the organization says it's "astonished," and that the Justice Department's decision to "propose granting a monopoly" to the two companies is "breathtaking." Yeah, they're not happy. Same goes for various members of Congress: Rep. Ed Markey, head of the House telecom subcommittee, expressed his disappointment that "the Bush administration has apparently never seen a telecommunications merger it didn't like," and suggested FCC approval would have to come with strict conditions, while Sen. Herb Kohl flatly said the deal would "create a satellite radio monopoly" and encouraged the FCC to block it. That's a lot of haterade -- but XM and Sirius are apparently too busy looking deeply into each other's eyes as their respective stock prices soar, because the only post-decision statement either company has made is a rehash of a months-old list of organizations and people that support the merger. Ah, young love -- so innocent, so oblivious.








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