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FCC Approves Merger of XM-Sirius Satellite Radio Firms
Friday, July 25, 2008; 8:56 PM
XM Satellite Radio won final approval to merge with Sirius Satellite Radio after the deciding vote in the Federal Communications Commission was cast tonight, putting an end to a contentious and drawn-out bid to join the companies.
The decision was delayed Friday by a last-minute stalemate between two Republican commissioners. Commissioner Deborah Taylor Tate refused to cast her tie-breaking vote to approve the merger until FCC Chairman Kevin J. Martin cast his own deciding vote to penalize the companies for violating some technical rules. The hold-up was resolved when Tate formally voted in favor of the deal.
The deal was largely sealed Thursday when the FCC fined the nation's two major satellite radio companies $20 million for breaking federal rules. The enforcement of the technical offenses was a sticking point for Tate, the last of the five-member commission to cast her vote on the deal.
The FCC's approval means XM and Sirius have passed the final regulatory hurdle associated with the $13 billion merger, which was proposed almost a year and a half ago. It also means satellite radio consumers will have access to both companies' programming and, eventually, more choices in terms of channel packages.
The merger has been heavily critized by the broadcasting industry, consumer groups and dozens of lawmakers and state attorneys general who argue the merger would create a monopoly satellite radio provider that could lead to higher prices and fewer programming options. But the deal passed antitrust scrutiny by the Justice Department in March and has been under the FCC's review for more than 16 months.
Under conditions imposed by the FCC, the companies have promised to let consumers pick only the channels they want and pay less for certain packages of channels. Radios that allow a-la-carte channel selections will also eventually be available for car dashboards -- the largest area of growth for the companies.
The combined company will offer two a la carte packages. Consumers will select their channels on-line allowing them to easily review the full-range of each company’s programming choices. A la carte programming will only be available for subscribers using new radios, which will be developed following approval of the merger.
• A La Carte – 50 Channels ($6.99) – Currently the only standard package offered by either company is $12.95 a month. Under this new option, for only $6.99 per month – a savings of 46 percent – consumers will be able to choose either 50 SIRIUS channels from approximately 100 SIRIUS channels or 50 XM channels from approximately 100 XM channels. Additional channels can be added for 25 cents each, with premium packages priced at additional cost. However, no one choosing this option will pay more than $12.95 a month.
• A La Carte – 100 Channels ($14.99) – Consumers may also choose an a la carte offering of 100 channels each. SIRIUS customers will be able to choose from some of the best of XM’s programming and XM customers will be able to choose from some of the best of SIRIUS’ programming. Today this programming would require two monthly subscriptions, totaling $25.90. The new 100 channel a la carte option represents a savings of 42 percent. Best of Both Packages Will Be Available on Existing Radios
Today, if consumers want the best of both XM and SIRIUS, they need two satellite radios and two separate monthly subscriptions totaling $25.90. Following the merger of SIRIUS and XM, consumers will be able to obtain the best of both SIRIUS and XM, on any of today’s satellite radio devices with one monthly subscription. XM customers would continue to receive their existing XM service, and be able to obtain certain SIRIUS programming. SIRIUS customers would continue to receive their existing SIRIUS service, and be able to obtain certain XM programming. This will be available
through existing SIRIUS and XM radios at a monthly cost of $16.99, a savings of 34 percent, compared to what it would cost to receive both services today.
Discounted Family-Friendly Packages
Both companies enable comprehensive channel blocking and parental controls today. After the merger, consumers who purchase a family friendly version of XM Everything or SIRIUS Everything can do so for $11.95, a credit of $1.00 per month. SIRIUS customers will also be able to choose a family-friendly version of SIRIUS programming that includes select XM programming. And XM customers can select a family-friendly XM programming option that includes select SIRIUS programming. These packages will cost $14.99 per month, a credit of $2.00 per month from the cost of
the “best of” packages. Today, a consumer would have to purchase two subscriptions for $25.90 to get this combined content.
Get Mostly Music or Just News and Sports and Save 23 Percent
Following the merger, consumers will also have the option of choosing a package of SIRIUS Mostly Music programming or XM Mostly Music programming. Subscribers will also be able to choose a package of SIRIUS News, Sports and Talk programming or XM News, Sports and Talk programming. Each of these packages will be $9.99 per month, a savings of 23 percent compared to today’s standard subscription of $12.95.
Like What You Have Today? It Will Still Be Here Tomorrow
From day one, SIRIUS and XM have promised that no subscriber will pay more after the merger for a service similar to what they enjoy today and that no existing radio will be made obsolete by the merger. The XM Everything and SIRIUS Everything packages will offer a service similar to that offered today for the standard subscription of $12.95.
The Canadian Radio-television and Telecommunications Commission (CRTC) said Monday it will demand that XM Canada and Sirius Canada immediately explain any merger plans and how those plans will affect their broadcasts.
The CRTC also said it has the right to reject such a merger and that a public hearing would be needed before the companies could consolidate their businesses.
The companies are being forced to consider combining their businesses because their U.S. counterparts will be merging into one satellite broadcaster. Both XM Canada and Sirius Canada receive their radio broadcasts from the U.S. businesses.
Ambitions for a Canadian merger could spark a major battle between the companies and the CRTC regarding how much Canadian content should be available on satellite radio.
Last week the U.S. Federal Communications Commission agreed to allow Sirius Satellite Radio and XM Satellite Radio to merge. The two, which have close to 20 million U.S. subscribers, have been preparing to merge for the past 17 months.
The U.S. companies are consolidating to cut business costs so that they can better compete with new technologies such as iPod music players and cellular phones capable of playing free Internet radio stations.
They will soon release a new satellite receiver capable of receiving both XM and Sirius programming.
One way the two U.S. companies can reduce costs is by closing duplicate specialty radio stations. XM and Sirius, for example, each offering music from the ‘60s, ‘70s and ‘80s. But a consolidated company would not require two of each specialty station.
With the U.S. broadcasters offering similar duplication of programming for their Canadian subsidiaries, concerns have arisen that Canadian content for satellite radio might be endangered.
When the CRTC allowed XM and Sirius to broadcast in Canada in 2005, it was contingent on the two offering one Canadian station for each nine U.S. stations offered. Until now, the broadcasters have offered about 20 Canadian stations. But with only one U.S. satellite radio business in the offing, and fewer stations expected as a result, the newly merged company could meet current CRTC requirements with as few as 10 Canadian stations overall.
"The last thing you want in any merger situation is a dilution of Canadian content. Obviously the CRTC is going to have to look long and hard at that," said Carmi Levy, senior vice-president of strategic consulting for AR Communications.
"I don't believe the CRTC would ever put the Canadian satellite broadcast landscape in a position of weakness. The CRTC is going to make sure nothing goes away programming-wise," he said.
More than 1.2 million Canadians subscribe to either XM or Sirius.Michael Moskowitz, president and chief executive of XM Canada, said merger talk in Canada is premature.
He said his company is examining all of its options, including a merger or an attempt to operate as a separate company.
"This is not something that is going to happen overnight," said Moskowitz. "Nothing could be done prior to the FCC approval in the U.S. That just happened on Friday night. We are looking at all of our options."
Moskowitz stressed to his company's customers that in the meantime, it will be business as usual for XM Canada.
No one from Sirius Canada would return phone calls seeking comment Monday.
XM Canada is a publicly traded company. Sirius Canada is held jointly by the Canadian Broadcasting Company, Sirius U.S. and Standard Radio Inc.
Tue Jul 29, 2008 5:24pm IST
NEW YORK, July 29 (Reuters) - Sirius Satellite Radio (SIRI.O: Quote, Profile, Research) on Tuesday said it completed its purchase of rival XM Satellite Radio Holding Inc (XMSR.O: Quote, Profile, Research), forming a broadcasting company that competes with traditional radio as well as digital audio players like iPods.
The completion comes after a marathon period of government scrutiny which ended late last week when the U.S. Federal Communications Commission approved the deal, which was first announced 17 months ago.
The new company will be named Sirius XM Radio, and will have more than 18.5 million subscribers.
Yes I have never had much success in any Forum having a new section added, so I just started one with a Post on Sirius Satellite Radio News. Since many NITRO owners do have this radio I think it is worthwhile to inform them of programing and pricing changes, here. Some that have not renewed their service may now want to do so with their new lower monthly fees with their recent purchase/merger with XM radio. Also if you want more information I recommend you check out the "Discussion Group Forum & News" over at SIRIUS Backstage Forum - Powered by vBulletin if you have not done so already.
Yes I have never had much success in any Forum having a new section added, so I just started one with a Post on Sirius Satellite Radio News. Since many NITRO owners do have this radio I think it is worthwhile to inform them of programing and pricing changes, here. Some that have not renewed their service may now want to do so with their new lower monthly fees with their recent purchase/merger with XM radio. Also if you want more information I recommend you check out the "Discussion Group Forum & News" over at SIRIUS Backstage Forum - Powered by vBulletin if you have not done so already.
Thanks for your post and enjoy!
Good idea about starting this thread. There doesn't seem to be much Admin support here, and NO moderators to speak of. You should be some sort of staff member here. You are ALWAYS online, and you post a TON.
Satellite Radio provides a residual income for automakers, and their shift to including the service on more and more models would indicate that auto manufacturers see a value in the satellite delivered services. Unlike AM, FM, or CD’s, satellite radio actually puts money into the coffers of the auto industry. Ford Includes Sirius in Long-Range Plans - Seeking Alpha
In accordance with their agreement with the FCC, Sirius and XM have sent letters letting subscribers know they may have satellite radio tuners that contain wireless FM transmitters that may overmodulate and interfere with terrestrial stations.
The XM letter states the notice does not apply if the subscriber’s new car came with an XM Satellite Radio; it’s generally referring to receivers purchased before August 2006.
The affected tuners include the Roady2, SKYFi2, MyFi, Airware, Tao, RoadyXT, Xpress, Sportscaster, XR9-XCX9, Jensen JXR9, Inno, Helix and Nexus.
XM is asking subscribers to visit a Web site or call an 800 number to discuss no-cost options to “alleviate this possible interference.” Those include XM sending the subscriber ferrite beads to attach to the FM antenna and power adaptor cables or a replacement cassette adaptor to use with the XM radio.
The company reminds subscribers their XM radio with an FM modulator will work best “if you use an unused frequency.”
Sirius has sent similar letters, and assured subscribers that there is no health or safety issue involved. The company is offering a free “Optimizer Kit” with several options that subscribers can take to prevent interfering with other devices.
Gotham sports-talk biggie Chris “Mad Dog” Russo is segueing from a 20-year run at CBS-owned WFAN to a five-year pact with Sirius XM.
Reformatted channels on Sirius and XM will be called Mad Dog Radio. Beginning Sept. 15, Russo will host a five-hour weekday show and help shape overall programming.
Deal is the first talent announcement from the satellite radio company since the merger of Sirius and XM cleared the final government hurdle earlier this summer.
Russo bid a tearful goodbye to his longtime afternoon home “The Mike and the Mad Dog Show” last Friday. The show essentially popularized sports talk as a national radio format and Russo’s pinched-throat exclamations defined the Gotham sports scene for a generation.
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