FCC Supports XM-Sirius Deal

The Associated Press has reported that 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 noncommercial and minority programming.

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

The proposed merger has been in a holding pattern during an FCC approval process that has gone on for more than a year.

Martin told the AP that the conditions will make the combination of the two companies good for consumers.

"As I've indicated before, this is an unusual situation," Martin said in a statement. "I am recommending that with the voluntary commitments they (the companies) have offered, on balance, this transaction would be in the public interest."

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.

The FCC's analysis has gone on twice as long as the agency prefers in merger reviews, largely because the XM-Sirius deal faces a special hurdle.

To ensure competition, the FCC prohibited the merger of the only two license holders when it created the industry in 1997.

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.

The satellite radio deal has drawn an unusual amount of scrutiny from Capitol Hill, where the National Association of Broadcasters has fought an expensive advertising and lobbying campaign to block approval.