Federal Communications Commission Chairman Kevin Martin confirmed Thursday that an agreement in principle to approve the merger between
Sirius Satellite Radio
XM Satellite Radio
has been reached, according to a published report.
Martin said the commissioners are "still trying to work out the language," according to a report in
The Wall Street Journal
Republican commissioner Deborah Taylor Tate cast the third and final vote in favor of the deal a day ago, breaking what was a 2-2 tie, after both satellite companies agreed to several concessions involving enforcement issues. The majority vote in favor of clearing the union would end a 13-month review process.
Finally! FCC Set to Approve XM-Sirius Deal
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In addition to Tate and Martin, commissioner Robert McDowell also offered support for the transaction. Commissioners Jonathan Adelstein and Michael Copps voted against allowing the deal to go through.
Shares of XM jumped 8.2% to $10.87, and increase of nearly 30% over the previous week. Sirius was higher by about 1% to $2.70.
The report came as XM and Sirius said they are in talks with the FCC's enforcement division in hopes of entering into a consent decree, what would likely be the final step in the FCC's process. XM and Sirius said they expect to agree to adopt comprehensive compliance plans, which includes taking steps to address any non-compliant receivers that consumers may currently own.
XM will also make a voluntary contribution of $17 million to the U.S. Treasury, and Sirius is expected to donate approximately $2 million. Both XM and Sirius must also shut down a number of terrestrial repeaters, which work with satellite signals to provide a stronger transmission network.
Within 60 days of adopting the consent decree, XM must shut down 50 variant terrestrial repeaters and will have to either close or bring into compliance an additional 50 repeaters. Sirius will be forced to bring into compliance or shut 11 repeaters. Sirius said those repeaters were already taken out of services in October 2006.
"There can be no assurances regarding the ultimate outcome of these enforcement proceedings, including whether the FCC will approve consent decrees under discussion with the companies," XM and Sirius said in a joint statement.
The sides must also adopt Martin's laundry list of concessions, which includes a-la-carte pricing, a three-year cap on price increases, an open standard for the manufacturing of radio receivers, spectrum set aside for additional public interest channels, and that service be extended to Puerto Rico, where neither company currently offers service.