[Federal Register: September 8, 2008 (Volume 73, Number 174)]
[Notices]
[Page 52046-52047]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08se08-64]
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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 fcc504@fcc.gov 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