On July 25, 2008, the Federal Communications Commission, after a 16-month review, announced its approval of the XM-SIRIUS satellite radio merger. FCC approval provides the green-light for the merger as the FCC is the top communications regulator.
FCC commissioner Deborah Taylor Tate cast the deciding vote in a 3-2 decision, after the two companies agreed to a $19 million "consent decree" agreement in late June, which addressed prior dealings that created anti-trust issues.
From the outset, competitors and critics have challenged the merger as a violation of federal anti-trust laws.
One particular issue addressed in the FCC's consent decree is the use of "terrestrial repeaters," which both companies conceded were put in unauthorized locations. The violation is of note.
As John Eggerton reported for Broadcasting & Cable on July 24, 2008, the FCC launched a 2006 investigation in to the repeaters and radios [used by the two companies], which included FM transmitters that did not comply with FCC rules.
In addition, as former FCC chief of staff, Blair Levon, points out in a July 25, 2008, BusinessWeek article, "The biggest question mark is how this product thrives in an era of difficult financing and where people have alternative means of getting radio..."
No doubt, profitability is a critical issue for XM and SIRIUS, as the two companies have racked-up years of heavy losses on the way to the current merger. In short, it has been a long road for investors, and it seems patience may be running out.
The news of the XM-SIRIUS merger has done little to slow company losses. In fact, as BusinessWeek reports, since the deal was announced in February 2007, SIRIUS shares have plunged 43%, to 2.25 as of July 25, 2008, while XM stock has tumbled 40%, to 9.28.
Here is the BusinessWeek article referenced above (FCC Approves the XM-Sirius Merger) and the B & C article referenced above (FCC Approves XM-Sirius Merger), for more.
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