FCC CHAIRMAN OKS SIRIUS-XM MERGER

FCC Chairman Kevin Martin has reportedly decided to recommend approval of the deal following concessions aimed at preventing the combined company from raising prices.

The Associated Press reports his decision was based on an agreement to turn over 24 channels of the combined service to noncommercial and minority programming. The two companies have also agreed on a three-year price freeze.

You’d think the Riley Martin hour would be enough to satisfy anyone.

A vote on the merger by the Commission could come as early as this week. The Department of Justice has already OK’ed the pairing from its end, determining it was not in violation of anti-trust provisions.

Martin’s statement read: "As I've indicated before, this is an unusual situation ... I am recommending that with the voluntary commitments they have offered, on balance, this transaction would be in the public interest."

FCC sources indicated both XM and Sirius have also agreed to an "open radio" standard, which will create competition among satellite radio manufacturers. Among the other conditions, agreed to by Sirius CEO Mel Karmazin last year, include a three-year freeze on prices and packages that include programs from both services, including an "a la carte" offering that would be available within three months of the close of the deal. At the time, he proposed pricing plans that ranged from $6.99 per month for 50 channels offered by one service, up to $16.99 a month, where subscribers would keep their existing service plus choose channels offered by the other service.

The biggest sticking point in the negotiations was over how much radio spectrum would be turned over to noncommercial and minority broadcasters. The final agreement was 8% of their satellite capacity, which works out to 12 channels apiece for noncommercial programmers and for those who have "not been traditionally represented" in radio. The details have yet to be worked out.

An FCC approval of the merger, which would require the Commission to waive explicit anti-merger prohibitions in the companies' licenses, may raise constitutional questions about caps on broadcast license ownership and cross-ownership as well, if satellite, MP3 players, iPods and mobile phones are considered competition for broadcast radio as well.

Nothing was mentioned about the FCC controlling the content of the combined stations, a discussion many feeled was aimed largely at Sirius' Howard Stern.