[Federal Register Volume 73, Number 174 (Monday, September 8, 2008)]
[Notices]
[Pages 52046-52047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20735]


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FEDERAL COMMUNICATIONS COMMISSION

[MB Docket No. 07-57; FCC 08-178]


Applications for Consent to the Transfer of Control of Licenses, 
XM Satellite Radio Holdings Inc., Transferor, to Sirius Satellite Radio 
Inc., Transferee

AGENCY: Federal Communications Commission.

ACTION: Notice; approval of merger.

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SUMMARY: This document approves the consolidated application of Sirius 
Satellite Radio Inc. (``Sirius'') and XM Satellite Radio Holdings Inc. 
(``XM''; jointly, the ``Applicants'') for consent to the transfer of 
control of the licenses and authorizations held by Sirius and XM and 
their subsidiaries for the provision of SDARS in the United States and 
eliminates the prohibition on one licensee of satellite digital audio 
radio service (or ``SDARS'') acquiring control of the other SDARS 
licensee.

DATES: The Commission's action became effective July 25, 2008.

FOR FURTHER INFORMATION CONTACT: Marcia Glauberman, Industry Analysis 
Division, Media Bureau, at (202) 418-7046, or Rebekah Goodheart, 
Industry Analysis Division, Media Bureau, at (202) 418-1438.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Memorandum Opinion and Order and Report and 
Order (the ``Order'') in MB Docket No. 07-57; FCC 08-178, adopted July 
25, 2008, and released August 5, 2008. The full text of this document 
is available for public inspection and copying during regular business 
hours in the FCC Reference Center, Federal Communications Commission, 
445 12th Street, SW., CY-A257, Washington, DC

[[Page 52047]]

20554. These documents will also be available via ECFS (http://www.fcc.gov/cgb/ecfs). The complete text may be purchased from the 
Commission's copy contractor, 445 12th Street, SW., Room CY-B402, 
Washington, DC 20554. To request this document in accessible formats 
(computer diskettes, large print, audio recording and Braille), send an 
e-mail to [email protected] or call the FCC's Consumer and Governmental 
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Summary of the Order

    1. In 1997, the Commission established the SDARS service and 
determined that there would be two initial SDARS licenses, sold at 
auction to different parties. The 1997 SDARS Service Rules Order, 62 FR 
11083, 11102, March 11, 1997 (``1997 Order''), contained the following 
language:

    Even after DARS licenses are granted, one licensee will not be 
permitted to acquire control of the other remaining satellite DARS 
license. This prohibition on transfer of control will help assure 
sufficient continuing competition in the provision of satellite DARS 
service.

    2. In this Order, the Commission found that the merger would be 
prohibited by the language in the 1997 Order. For the reasons 
summarized below, however, the Commission found that approval of the 
merger, subject to the Applicants' voluntary commitments and other 
conditions, would benefit consumers by making available to them a wider 
array of programming choices at various price points and affording them 
greater choice and control over the programming to which they 
subscribe, and that those benefits would exceed the harms. For the same 
reasons, the Commission concluded that elimination of the prohibition 
on one licensee of SDARS acquiring control of the other SDARS licensee, 
on balance, would serve the public interest.
    3. The Commission's decision was based on consideration of the 
consolidated application of Sirius and XM for consent to the transfer 
of control of the licenses and authorizations held by Sirius and XM and 
their subsidiaries for the provision of SDARS in the United States. 
After reviewing the empirical data available as part of its competitive 
analysis, the Commission determined there was insufficient evidence in 
the record to predict the likelihood of anticompetitive harms. It 
therefore evaluated the Application under ``worst-case'' assumptions, 
i.e., that the relevant market is limited to SDARS. This approach 
permitted the Commission to protect consumers from potential adverse 
effects of the transaction while also allowing the Commission to 
balance potential harms against potential public interest benefits. The 
Commission concluded that the merger, absent the Applicants' voluntary 
commitments and other conditions, would result in potential harms. The 
Commission found that, with the Applicants' voluntary commitments and 
other conditions, the potential public interest benefits of the 
transaction, on balance, outweigh the potential harms, and approval of 
the transaction is in the public interest.
    4. The Commission conditioned grant of the application on the 
merged firm's fulfillment of the Applicants' voluntary commitments and 
other conditions. The Commission accepted the Applicants' voluntary 
commitments and imposed conditions to:
    a. Cap prices for at least 36 months after consummation of the 
transaction, subject to certain cost pass-throughs after one year. In 
addition, six months prior to the end of commitment period, the 
Commission will seek public comment on whether the cap continues to be 
necessary in the public interest and will determine whether it should 
be extended, removed, or modified. The merger approval is conditioned 
on the Commission's ability to modify or extend the price cap beyond 
the three-year commitment period.
    b. Offer to consumers, within three months of consummation of the 
transaction, the ability to receive a number of new programming 
packages, including the ability to select programming on an a la carte 
basis.
    c. Make available four percent of its capacity for use by certain 
Qualified Entities, and an additional four percent of capacity for the 
delivery of noncommercial educational or informational programming, 
which will enhance the diversity of programming available to consumers.
    d. Offer interoperable receivers in the ``retail after-market,'' 
i.e., receivers available at retail outlets for installation in 
consumers' automobiles or homes, within nine months of consummation of 
the merger.
    e. Refrain from entering into any agreement that would grant an 
equipment manufacturer an exclusive right to manufacture, market, and 
sell SDARS receivers. Applicants also commit to refrain from barring 
any manufacturer from including in any receiver non-interfering digital 
audio broadcast (or, ``HD Radio'') functionality, iPod compatibility, 
or other audio technology.\1\ In addition, Applicants will make 
available the intellectual property needed to allow any device 
manufacturer to develop equipment that can deliver SDARS.
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    \1\ Although the Commission found it unnecessary to impose a 
condition requiring the inclusion of HD Radio technology in SDARS 
receivers, it recognized that important questions were raised about 
HD Radio that warrant further examination in a separate proceeding. 
The Commission will initiate a notice of inquiry within 30 days 
after adoption of the merger order to gather additional information 
on the issues.
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    f. File the applications needed to provide Sirius satellite service 
to Puerto Rico via terrestrial repeaters within three months of the 
consummation of the merger.
    5. The Commission reiterated that SDARS licensees are already 
prohibited, independent of the merger, from using terrestrial repeaters 
to distribute local content--including both programming and 
advertising--that is distinct from that provided to subscribers 
nationwide via satellite. The Commission also prohibited the merged 
entity from entering into agreements that would bar any terrestrial 
radio station from broadcasting live local sporting events.
    6. The Commission clarified that the merged entity must comply with 
the Commission's equal employment opportunity rules and policies for 
broadcasters, including periodic submissions to the Commission 
consistent with the broadcast reporting schedule.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E8-20735 Filed 9-5-08; 8:45 am]
BILLING CODE 6712-01-P