Sirius XM Merger Draws Near; What Does it Mean for You

The FCC has finally announced its approval of the Sirius XM Merger that has been pending before them for far too long. The approval of the Sirius XM Merger, however doesn't let the two companies off the hook for pending enforcement actions. To settle these issues Sirius and XM are expecting to make "voluntary contributions" to the US Treasury to the tune of 19 million dollars. Additionally Sirius and XM will need to address some technical issues that remain with some of their older radios and terrestrial repeater broadcasting stations.

Remaining FCC Enforcement Issues

These remaining issues, are not expected to be deal breakers for the XM Sirius merger. Indeed Sirius and XM have announced on July 24^th that they are negotiating the resolution of the FCC enforcement matters already. These enforcement actions stem from technical deficiencies in some of the portable radios that came to light a few years ago. Both XM and Sirius have fixed the issue in all new models, but some of the older equipment remains in the field. Specifically the problem was the transmitting power of the mobile satellite radio receiver units. Both XM and Sirius receivers allowed users to send a weak FM signal from the receiver to their car radio. The broadcast power of these Sirius and XM receivers was intended to be limited so that the signal could not be inadvertently picked up by nearby cars who happened to be tuned in to the same frequency. Unfortunately a number of these receivers ended up broadcasting their signals too far and a number of complaints were received by the FCC as people found their NPR or religious programming interrupted by things like the Playboy Channel or Howard Stern.

NAB Opposition to the Sirius XM Merger

The approval of the XM Sirius merger was also delayed by aggressive lobbying efforts by the National Association of Broadcasters which feared competition from a strong satellite radio entity which might be formed by the Merger of XM and Sirius. However, the NAB's argument that the merger of the two satellite radio companies created a monopoly, seemed to be undermined by the NAB's concern about the merger. IF the merger creates a monopoly which has no effective competition, then why is the NAB, representing terrestrial radio broadcasters concerned. The obvious answer is that satellite radio does have strong competition. That competition comes from terrestrial radio and increasingly other sources of audio. Things like the iPod, internet radio, and other new technologies are providing consumers with new options for delivery of music and other audio content.

Justice Department Ruling on the XM Sirius Merger

Months ago, the Justice Department ruled that in their opinion, the Merger of XM and Sirius would not create a monopoly. This ruling really left little room for the FCC to deny the application of the merger between Sirius and XM. Even so, the delay seemed unusually long.

How the Sirius XM Merger Affects Customers

I have been a customer of both XM and Sirius radio since I worked with both companies several years ago. I have been looking forward to reducing my two receivers into one combined unit, and having easier access to both Sirius' music programming and XM's baseball coverage. Sirius and XM have announced that they will offer a variety of programming packages at various prices if the merger is consummated. For some consumers this will mean lower prices for a smaller number of channels. Many others, like myself, will want everything that both satellite radio companies have to offer and will pay a bit more. If customers find it too expensive, then they'll just have to try that newfangled music device that Apple released a while ago, or even free terrestrial radio.