FCC Reaches Tentative Deal To Approve XM-Sirius Merger

By | July 23, 2008 at 4:38 PM

A tentative deal has been reached by a majority of commissioners at the Federal Communications Commission to approve the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., a FCC source close to the review said Wednesday.

Republican commissioner Deborah Taylor Tate is the only FCC member left to vote on the deal and she is expected to do so shortly, two FCC officials close to the negotiations said. She is expected to sign off on the deal in exchange for a consent decree that resolves several enforcement issues involving the satellite radio companies and a combined fine of about $20 million, an FCC source close to the deal said.

Ms. Tate has also asked for a variety of other minor conditions, an FCC source said. An adviser to Ms. Tate did not respond to a call for comment. Exact details about the deal are not known since FCC officials and lawyers for the companies appear to still be working them out.

Ms. Tate’s vote would finally end the agency’s 13-month review of the deal. Her vote is critical for the deal’s approval since the rest of the five-member board remained evenly split on the deal.

As of Wednesday morning, both of the FCC’s two Democratic commissioners had voted against the deal. Democrat Jonathan Adelstein announced his decision in a statement, noting he was hoping for a “bipartisan solution” but that the other commissioners weren’t interested.

Last week, Mr. Adelstein proposed conditions including a six-year price cap, a 25% channel set-aside for non-commercial and minority-owned stations and interoperable radios that would receive high-definition signals from terrestrial radio stations.

FCC chairman Kevin Martin had made it clear to the rest of the commissioners Tuesday evening that Mr. Adelstein’s conditions would not be a focus of the negotiations, an agency source said.

In recent days, Ms. Tate has been the center of negotiations, as the companies have wrangled over how to resolve several outstanding enforcement issues that have been raised. They include issues involving complaints that some of the satellite radio receivers exceeded FCC power limits and bled into the signals of some local radio stations.

Concerns have also been raised that Sirius has yet to bring to market an interoperable radio despite an FCC requirement that it develop one. Broadcasters have also complained that satellite booster towers were placed in non-approved locations.

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