A merger between Sirius Satellite Radio and XM Satellite Radio was approved with conditions by the FCC today, clearing the way for a deal that will leave just one U.S. satellite radio service.
The Federal Communications Commission voted 3-2 in favor of a proposal that would allow the deal to proceed as long as the companies meet a series of consumer protection conditions, including a three-year cap on prices, set-aside of channels for minority and non-commercial programming and payment of a $19.7 million penalty for past FCC rule violations.
Subscribers will not have to buy new radios to receive a mix of programming from both services, according to the companies. But if they want to pursue a special pay-per-channel a la carte option, they will need new sets.
Based on yesterday’s closing share prices, the deal is valued at $3.3 billion, not including debt. Three of the five FCC Commissioners agreed that the marketplace has changed since the two companies formed, with iPods, mobile radio/tv and cellular/WiMAX devices.
It ended a 16-month-long process when Sirius Satellite proposed a $3.6 billion buyout of rival XM Satellite Radio. It will mean 18 million-plus subscribers will be able to receive programming from both services. Executives say it will mean huge cost savings that will lead to a first-ever profit for the relatively nascent industry.
Related Satellite Radio articles on Dailywireless include; Adelstein: Swing Vote in Satellite Radio Merger, XM/Sirius Merger Soon?, Sat Radio Merger Provisions?, Satellite Radio Merger Goes to FCC, Battle Over 2 Dot 3.
