'Voluntary' Concessions Give Cover for Final F.C.C. XM/Sirius Approval

Sam Gustin is on the lookout for final F.C.C. approval of the proposed XM/Sirius merger as early as this week, thanks to the "voluntary" concessions F.C.C. Chairman Kevin Martin was able to extract from the two companies.

Now that Martin has given his backing to the merger, he only needs two of the remaining four commissioners to vote in favor of the deal to achieve the majority required for formal approval. Justice Department regulators approved the deal in March.

Typically, Martin's style is to try to achieve a unanimous vote by the commissioners. The two other Republican commissioners, Robert McDowell and Deborah Taylor Tate, will likely approve the merger. And the "voluntary" concessions may provide cover for the Democratic commissioners, Michael Copps and Jonathan Adelstein, to sign off on the deal as well.

In this case, "voluntary" is a bit of a misnomer, in the way that "voluntary buyout" is, because Martin most likely gave XM and Sirius little choice whether to accept them. And as Alley Insider's Peter Kafka notes, "the desperate satellite guys would agree to just about anything to get this deal done."

Among the concessions agreed to by XM and Sirius:

- No rate hikes in the first three years.

- Smaller, a la carte packages at lower rates.

- Open technology standards for radio units, allowing a proliferation of devices, which will be sold in retail stores. (This is a big one, because it encourages competition among device manufacturers.)

- A la carte configured radios available on the retail market withing three months of the merger.

- Interoperable radios capable of receiving both XM and Sirius programs within one year of merger.

- Eight percent of radio spectrum set aside for "public interest" programming -- four percent non-commercial, four percent for under-represented groups, (minorities, women.)

In a sign of how far the concessions may go in placating opponents of the deal, Public Knowledge, a consumer rights group, issued a statement Monday praising the conditions the companies have agreed to.

"From what we have been able to read and to learn this morning, many of the conditions the Federal Communications Commission is considering placing on a potential merger of XM Satellite Radio and Sirius Satellite Radio are conditions that we have proposed and supported for more than a year, both in Congressional testimony, as well as in meetings with the Commission," said Gigi Sohn, president of Public Knowledge. "We support what we have heard today about the Commission's proposals, although we would like to know more about how the set-aside for noncommercial channels would be implemented."

Martin's success in extracting the concessions appears to be a pretty deft move which may have taken the wind out of the sails of many opponents of the merger. Barring something weird, this one's a done deal, folks.

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Laura Rich is a co-founder of Recessionwire, which provides news, advice, perspective and humor about the recession and the recovery.