Federal Communications Commission Chairman Kevin Martin has reportedly agreed to back the proposed merger of Sirius Satellite Radio and XM Satellite Radio companies after getting concessions from the satcasters. According to an Associated Press report Monday (June 16) report, the new entity has agreed it will not raise prices or block competition between radio manufacturers. The conditions were specifically sought by Reps. John Dingell (D-Mich.) and Edward Markey (D-Mass.) in a letter to Martin more than six weeks ago.
"As I've indicated before, this is an unusual situation," Martin said in the AP report. "I am recommending that with the voluntary commitments they (the companies) have offered, on balance, this transaction would be in the public interest."
The conditions placed on the combined entity, will be good for consumers, Martin said. They include a three-year freeze on prices and a series of a la carte packages promised to the public and to regulators last July by Sirius CEO Mel Karmazin when he unveiled them during a luncheon at the National Press Club. The a la carte should be available within three months of the close of the deal.
Sources believe Martin will put his decision on circulation to the other four commissioners this week and their votes will follow. Martin is believed to be the last holdout on the long-awaited merger. Monday, June 16 marks the 453rd day since the deal was proposed on Feb. 19, 2007. Commissioners Deborah Taylor Tate and Robert McDowell are believed to be in favor of the merger while anti-media consolidation proponents Michael Copps and Jonathan Adelstein are thought to be inclined to vote against the deal.
On Friday, an FCC spokesman told R&R that the deal was still under the commission's review and that no decision had been made. He explained that it was more likely that a vote would be proposed by the chairman and then a vote taken.
XM and Sirius declined comment.
When announced, analysts pegged the all-stock deal's value at just about $5 billion but declining stock value puts the deal at about $3.6 billion. Shares of Sirius closed 14 cents higher on Friday at $2.54 while XM jumped 54 cents to $10.87.
The National Association of Broadcasters has spent millions of dollars on a variety of fronts attempting to block the merger, calling it a government-sanctioned monopoly. On March 24, the Department of Justice's Antitrust Division approved the merger without conditions.
Numerous legislators have spoken out against the union, concerned that it could harm consumers, while still others with influence have given their approval as long as certain conditions were met.