XM Radio - Satellite Radio closer to merger as FCC set to approve deal conditionally

22 July 2008

The longest merger in American corporate history got closer to reality with the last hurdle of the US Federal Communications Commission (FCC) looking to be crossed, as FCC commissioner Jonathan Adelstein said he would approve the Sirius-XM deal, but with stricter conditions, an FCC staff member confirmed.

The conditions would require the merged company to include HD Radio on any satellite radio product it subsidises that also includes an AM-FM tuner. Stipulations would also include a six-year freeze on service fees and that Sirius and XM devote 25 per cent of spectrum to minority and public-interest programming.

A pro-merger vote by either Adelstein or Deborah Taylor Tate, two undecided commissioners of the FCC, would result in merger approval. However, a staff member at Tate's office said, ''She doesn't have a stance right now. She's having the necessary meetings to make the right decision.''

The NASDAQ-listed XM Satellite Radio Holdings and Sirius Satellite Radio are the only two satellite radio (SDARS) services operating in the US and Canada.

A satellite radio or subscription radio (SR) is a digital radio signal that is broadcast by a communications satellite, which covers a much wider geographical range than terrestrial radio signals.

For now, satellite radio offers a meaningful alternative to ground-based radio services in some countries. Mobile services, such as Sirius, XM, and Worldspace, allow listeners to roam across an entire continent, listening to the same audio programming anywhere they go.