FCC OK’s Sirius Satellite acquisition of XM

Published on July 26th, 2008

Posted by Eideard in General, Technology

Sirius Satellite Radio’s $3.3 billion purchase of XM Satellite Radio has been approved with conditions by U.S. communications regulators, clearing the way for a deal that will leave just one U.S. satellite radio service.

The FCC’s commissioners voted by a 3-2 margin in favor of a proposal that would allow the deal to proceed as long as the companies met a series of consumer protection conditions, including a three-year cap on prices, setting aside 8 percent of their channel capacity for minority and non-commercial programming and payment of a $19.7 million penalty for past FCC rule violations.

The companies also will have to make available to consumers radios that receive both Sirius and XM. As part of the order, the FCC also will conduct an inquiry into whether it should require that all satellite radios be built with technology that allows them to also receive high definition terrestrial radio signals…

The merger would bring entertainers such as Oprah Winfrey and shock jock Howard Stern under the same banner.

Neither firm has managed to outstrip the other, in content, style or substance. Maybe there’s now a better chance of a single self-sustaining operation.

29 users responded in " FCC OK’s Sirius Satellite acquisition of XM "

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# 1 gquaglia said, on July 26th, 2008 at 6:16 am

Its about time. This whole ordeal was a complete sham. How many thousands from NAB lobbyists got pocketed by certain politician to keep this going as long as it did.

# 2 Rakarich said, on July 26th, 2008 at 6:34 am

Personally I think Podcasting will be the death of satellite radio.. I would short this stock.

# 3 TVAddict said, on July 26th, 2008 at 6:35 am

I just hope the FCC keeps it’s nose out of the content. We have enough regulation in AM/FM radio. Don’t want or need the same regs in XM/Sirius.

# 4 JPV said, on July 26th, 2008 at 6:38 am

and payment of a $19.7 million penalty for past FCC rule violations.

Cool, as a part of allowing the merger they promise to pay fines that they incurred. How nice. And if the merger wasn’t approved?

# 5 Improbus said, on July 26th, 2008 at 7:03 am

So?

There is no way in hell I will ever PAY for radio. I don’t care if it’s digital. I have a DAP and a car stereo that knows how to play MP3s. Why do I NEED pay digital radio?

# 6 Miss_X2b said, on July 26th, 2008 at 7:19 am

One year of free XM radio came with my GM car. It’s so-so. When I drive under any obstruction, even trees, the signal is lost. Bleh! I’m sticking with FM, it’s free.

# 7 Jägermeister said, on July 26th, 2008 at 7:26 am

No difference… I can’t see myself pay to listen to either Oprah or Howard Stern…

# 8 MikeN said, on July 26th, 2008 at 7:28 am

Why should the FCC mandate what type of technologies people use? You guys are OK with the requirement that you have to be able to receive HD radio as well?

>setting aside 8 percent of their channel capacity for minority and non-commercial programming

Anytime there’s a merger, there are outsiders demanding a piece of the action.

# 9 cranky pants said, on July 26th, 2008 at 7:30 am

I would love to get away from paying for premium TV, but my family just has to have it. There is no way I’m paying for radio, that’s absurd.

# 10 BillBC said, on July 26th, 2008 at 9:27 am

I’ve subcribed to Sirius for a couple of years now…listen to it in house and car…I think it’s terrific…pops, classical, jazz, Latin, country, oldies…everything. No commercials. Great reception (even in mid north Canada..I use the US not the Canadian service.) Never listend to Stern..a blowhard…just music…great.

# 11 TallSteve said, on July 26th, 2008 at 9:41 am

Hey Improbus and others…

Can you say no commercials and no dj’s that suck! This is why I pay to uninterruped music.

# 12 grimm77 said, on July 26th, 2008 at 9:50 am

The FCC proposal requires the combined company to cap the subscription price for three years, but it does not say the price will be $12.95/mo. The price will be negotiated and the company will argue that the increased number of channels justifies a higher price. It may cost $25/mo. Yes, there will be a la carte pricing, but they will bundle channels in such a way that it won’t make sense. (For example, you might get basic news, talk and music channels for under $25, but add any “premium” channels like MLB or NFL and you’re over $25).

The merger is no guarantee that the company will be profitable. I don’t think the NFL, MLB, Nascar, or Howard Stern will agree to restructure their contracts. Sirius/XM will be paying for the duration.

The company will have to toe a fine line between charging enough to pay its bills, but not so much that it loses subscribers. Any mistake could spell disaster.

# 13 Cap'nKangaroo said, on July 26th, 2008 at 10:16 am

As a over-the-road truck driver, I would give up my CB radio before I would give up XM. If you only drive an hour or two a day, I understand not wanting to pay for radio. I’m driving up to ten hours a day and will gladly pay the $15 a month for the variety and always being in signal range. And the prospect of getting both baseball and football on the same radio has me behind the merger.

That said, I also love my ipod to listen to my music and to podcasts and will be trying out audiobooks. Anything is better than the crappy FM and AM free radio stations. Gator country, The Edge alternative, Fox rock, etc. Doesn’t matter what part of the US I’m in, I’ll hear one of these stations using the same playlist and sometimes the same DJs. As long as you can get a signal. Try driving thru west Texas and finding anything other than a country station and couple of religious stations (with the same feed!!)

#6 I don’t know about the antennas used in cars but I always replace the little magnetic mount antennas with a decent mirror mount one and only lose signal when going thru a tunnel or something similar.

# 14 Thomas said, on July 26th, 2008 at 10:57 am

#5
Simply put, you are only listening to what you have listened to before. There is no variety other than what you specifically put on your player. There are times when that is good. However, there are an equal number of times when I want to hear a variety assembled by someone else or to hear current news and talk rather than that which I had to previously assemble.

There are a lot of good reasons for satellite radio. If everyone had a radio that could allow people to easily tap into the Internet with no disruptions regardless of where you were located, then they might use that. However, even satellite radios can be clunky to use in a car, so I can only imagine the problems with an Internet radio.

Although these companies are merging, we, the consumer are unlikely to feel the difference until they consolidate their technology. I have XM and could care less about the MLB stations but the College stations (Pac-10, Big-10 etc) are nice during football season (there are only two seasons: football season and waiting for football season ;->). It’d be great if they gave XM listeners the NFL stations but I doubt that will happen.

# 15 hhopper said, on July 26th, 2008 at 11:49 am

As far as the loss of signal goes… get a decent receiver that has a buffer.

# 16 Jägermeister said, on July 26th, 2008 at 12:51 pm

#11 – TallSteve – Can you say no commercials and no dj’s that suck! This is why I pay to uninterruped music.

Ever tried listening to the Internet stations? But of course, if you want to listen to overpaid people who whine all day long, pay to listen to Stern.

#13 – Cap’nKangaroo – And the prospect of getting both baseball and football on the same radio has me behind the merger.

That’s another good reason for not paying.

# 17 MikeN said, on July 26th, 2008 at 1:07 pm

Because of this vote Howard Stern declared the Democrats to be communists. I don’t think they can afford to lose him in an election year.

# 18 Paddy-O said, on July 26th, 2008 at 1:20 pm

#2 “I would short this stock.”

Can’t get much shorter…

# 19 Floyd said, on July 26th, 2008 at 2:08 pm

When on the road, I plug in my iPod and listen to music and podcasts I want to hear.

Howard Stern, and for that matter Oprah Winfrey, make my ears bleed.

# 20 Cap'nKangaroo said, on July 26th, 2008 at 2:32 pm

#14 It is my understanding that the new company will offer both NFL and MLB together, though you may need a new receiver. Since they have been trying to get the deal approved for nearly 18 months, i bet they have the specifications ready to roll out to the manufacturers.

# 21 daav0 said, on July 26th, 2008 at 2:35 pm

I have XM and never listen to Howard Stern OR Ophrah. One hundred commercial free music channels is awesome! Sixties (sometimes with the risen from the dead Wolfman Jack) Seventies, Forties, Bluegrass, Accoustic Jazz, Fusion Jazz, Drum and Bass, Trance, Techno, even an all EMO channel, should I want to depress myself to death.

Multiple comedy channels, Old Time Radio Theater, Contemporary Radio Theater, every kind of talk.

Local traffic and weather for sixty markets.

American FM radio sucks, for the most part. It has been homogenized and blown out of the water by overconglomeration. There is only one message on ‘merkin radio, only one voice, only one master.

Satellite radio is great stuff.

# 22 jescott418 said, on July 26th, 2008 at 2:35 pm

I really don’t see this as a big help. I am not sure even one company can make it. Unless they reduce the payroll of the online talent and sports contracts. I had XM for a couple years and the quality of audio became almost worse then FM. Bandwidth has been over compressed to make room for more and more channels.

# 23 Brian said, on July 26th, 2008 at 4:56 pm

I am glad this finally happened…and the only reason it took so long was because the corrupt terestial station owners like clearchannel (clear? hah!) were allowed to put so much pressure on to keep it from happening.

Anyone who says ‘I won’t pay for radio!’ let me guess, you still picking up TV for free?

I’ve had XM since the day it launched, and haven’t once regretted it. No commercials, no moronic DJs trying to be ‘funny’ infinitely better music choices. Anyone who says ‘I won’t pay for radio!’ isn’t a music fan.

There are a few stations on Sirius I really like (Faction, Boobox) and to get those on the same radio I get my XM? I’m stoked.

Now you losers who think 60 year old ‘technology’ such as FM is the way to go, well, old fogeys, you couldn’t be more wrong.

# 24 Slovenia stroll said, on July 27th, 2008 at 12:07 am

I am an XM subscriber. This part bugs me.

“setting aside 8 percent of their channel capacity for minority and non-commercial programming”

This bothers me as much as infomercials on my cable. I am paying for a premiem service. To force them to include this crap may keep them from including some good programing. Would you except infomercials on your HBO? And yes I can read “noncommercial programing” but that is what it is alreaddy offering.

# 25 Mister Ketchup said, on July 27th, 2008 at 1:00 am

#24 – You can go to the web site and block out the crap that you don’t want to listen to like the religious nuts. Howard Stern is great, well worth the $500,000,000 salary.

# 26 Glenn E. said, on July 27th, 2008 at 1:23 am

“The merger would bring entertainers such as Oprah Winfrey and shock jock Howard Stern under the same banner.”

This isn’t any incentive for me to subscribe to XM or Sirius. Especially Oprah. I can’t avoid hearing her fawn all over Tom Cruise, enough. And no doubt Limbaugh is stinking up their airways too. If I want to listen to music on a long trip, I’ll take along my MP3 player. XM is for radio-addicts, who can’t get enough programming choices, to the point of absurdity. Doubtless, most of them are only slightly varied, to the point of being indistinguishable, without their channel logos. Like Tv shopping channels that carry only a select quality of CRAP you don’t need!

As for the long haul drivers, of whom XM probably got its start with. $4 a gallon gas will probably shorten both their trips, and the radio subscriptions. XM may not survive, being it’s never shaken being a luxury. It will have to depend on the top 5% of american incomes to support it. It may not get that many.

# 27 Jim said, on July 27th, 2008 at 10:54 am

well, oprah doesn’t even appear on her channel more than 1 hr per week, from what i understand while on sirius martha stewart is there a couple of hours a day, 5 days a week.

as for the music channels, i like what i got but from what i understand xm also has a good playlist, so hopefully the merger will complment both of them. but what I want is hockey back (if for no other reason than to listen to flyers games wherever i am and not have to get the nhl center ice plan from comcast). as well, it will be nice to listen to penn state games without needing the net. and as for the lefty channel over on XM, eat Lynn Samuels’ and Alex Bennett’s shorts. but finally, i only listen to local radio anymore for local talk and maybe coast to coast am.

i am betting in 5 or so years, that most terrestrial stations will go to mainly local content while networked shows will head onto the sattelite radio and the net.

# 28 Martina said, on August 9th, 2008 at 2:33 am

I only listen to lacal radio anymore for local tald and maybe coast to coast am.

# 29 Martina said, on August 21st, 2008 at 3:17 am

Regulators clearing the way for a deal that will leave just one U.S. satellite radio service.

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