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U.S. FCC chairman recommends approval of satellite radio merger
[June 16, 2008]

U.S. FCC chairman recommends approval of satellite radio merger

(Canadian Press (delayed) Via Acquire Media NewsEdge) WASHINGTON _ The chairman of the Federal Communications Commission is recommending approval of the $5 billion merger between the nation's two satellite radio broadcasters in exchange for concessions that include turning over 24 channels to non-commercial and minority programming, The Associated Press has learned.

That condition _ along with others, including a three-year price freeze for consumers _ convinced FCC Chairman Kevin Martin on Sunday to recommend approval for Sirius Satellite Radio Inc.'s buyout of rival XM Satellite Radio Holdings Inc.

The deal affects millions of subscribers who pay to hear music, news, sports and talk programming, largely free from advertising, in homes and vehicles.

Martin's recommendation sets the stage for a final vote on the closely watched merger, which could occur any time after his recommendation is circulated among his fellow commissioners.

The other four commissioners have, for the most part, kept their views on the deal to themselves and there is no clear indication on how the vote will go.

Martin said consumers would benefit from the merger.

The companies also agreed to an ``open radio'' standard, meant to create competition among manufacturers of satellite radios, according to FCC officials who spoke on condition of anonymity because the agreement has not yet been made public.

Other conditions include a three-year freeze on prices and packages that include programs from both services, including a so-called ``a la carte'' offering that would be available within three months of the close of the deal.

Martin is recommending approval despite intense opposition from the land-based radio industry and most consumer groups, who say the deal will create a monopoly.

The buyout was approved by the Justice Department in March and received shareholder approval in November. The companies said the merger will save hundreds of millions of dollars in operating costs, savings that will ultimately benefit their customers.

Both companies have lost money each year since they launched their satellites.

Washington-based XM has about 9 million subscribers while New York City-based Sirius has about 8.3 million subscribers.

The expected merger of the two American satellite radio operators has raised questions about the possibility of a similar deal in Canada

XM Canada is affiliated with XM Satellite Radio Holdings and Canadian Satellite Radio Holdings.

Sirius Canada Inc. is a partnership of the government-owned Canadian Broadcasting Corp., private-sector Standard Radio and U.S.-based Sirius Satellite Radio. The two Canadian partners each own 40 per cent and the U.S. company owns the remaining 20 per cent. When asked in April about the possibility of a merger of the Canadian businesses, XM Canada president and chief executive Michael Moskowitz said only that if the FCC approved the deal in the U.S., his company would review any opportunities that might arise.

Copyright ? 2008 The Canadian Press

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