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FCC approves Sirius-XM satellite radio merger deal

July 26, 2008|From the Associated Press

Federal regulators formally approved the merger of the nation's only two satellite radio operators Friday, ending a 16-month-long drama closely watched by Washington and Wall Street.

Sirius Satellite Radio Inc.'s $3.3-billion buyout of rival XM Satellite Radio Holdings Inc. means that more than 18 million subscribers will be able to receive programming from both services. Executives say the deal will mean huge cost savings that will lead to a first-ever profit for the relatively nascent industry.

The Federal Communications Commission voted 3 to 2 to approve the buyout, with the tie-breaking vote coming Friday night from Republican commissioner Deborah Taylor Tate. The vote split along party lines.

Tate had insisted the companies settle charges that they violated FCC rules before she would approve the deal. The companies agreed this week to pay $19.7 million to the U.S. Treasury for violations related to radio receivers and ground-based signal repeaters.

FCC Chairman Kevin J. Martin confirmed the final 3-2 vote Friday night.

"I think it's going to be, in the end, a good thing for consumers and be in the public interest," he said.

Subscribers will not have to buy new radios to receive a mix of programming from both services, according to the companies. But if they want to pursue a special pay-per-channel option, they will need new sets.

The merger's approval was a major blow for the land-based radio industry, which lobbied hard against the buyout. It was also opposed by consumer groups, various members of Congress and state attorneys general, all of whom argued that the Sirius-XM merger would hurt consumers and was not in the public interest.

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