XM, Sirius deal closing in on FCC approval: reports
Last Updated: Thursday, July 24, 2008 | 4:10 PM ET
CBC News
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The proposed merger of the U.S.'s two satellite radio broadcasters is expected to be approved after the companies agreed to pay $19.7 million US to settle rules violations.
Federal Communications Commission chairman Kevin Martin said Thursday the regulatory agency reached agreements Wednesday night in which XM Satellite Radio Holdings Inc. will pay $17.5 million and Sirius Satellite Radio Inc. will pay $2.2 million to settle agency violations.
The Wall Street Journal reported Thursday the deal was all but done after commission member Taylor Tate cast the deciding vote.
"I think it's fair to say an agreement in principle has been reached," Martin was quoted by the Journal on Thursday as saying.
The proposed merger — whereby Sirius would buy out XM in a $3.9-billion US deal — has been in a holding pattern during an FCC approval process that has gone on for more than a year.
Critics of the deal, including the ground-based radio industry and consumer groups, argue the merger would essentially create a monopoly in the satellite radio industry.
It remains unclear how the proposed merger would affect the two companies' Canadian partners, which operate under a separate regulatory structure.
Sirius Canada Inc. is owned by Sirius Satellite, Toronto-based Standard Radio and the CBC. XM Canada is run by Canadian Satellite Radio Holdings, also of Toronto, in partnership with XM Satellite.
XM Canada has maintained that the U.S. development has no immediate implications for Canadian subscribers and that the stated intent of its XM U.S. partner and Sirius is to maintain two separate satellite delivery systems.
Sirius Canada Inc. said it has more than 750,000 paying subscribers, while XM Canada claims close to 400,000 subscribers. Their U.S. parents have 8.3 million and about nine million subscribers, respectively.
An XM Canada spokesperson said the company had no comment, since no official announcement has been made. However, XM Canada has repeatedly stated that a merger would not bring any change in the service for Canadian subscribers.
Sirius Canada spokesman Jeff Roman said the company also wouldn't speculate on the outcome until a decision from the FCC is final.
He said regardless of the outcome, Sirius Canada is a separate company and its subscribers won’t experience interruption to their programming and their radios "will not become obsolete as a result of a merger."
With files from the Associated PressShare Tools
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