Some FCC votes cast, but no verdict on XM: Sirius

WASHINGTON Tue Jul 22, 2008 5:36pm EDT

WASHINGTON (Reuters) - Two additional members of the Federal Communications Commission have cast votes on a proposal to approve Sirius Satellite Radio Inc's acquisition of XM Satellite Radio Holdings Inc, one voting for it and another against it, agency sources said on Tuesday.

Republican FCC commissioner Robert McDowell has voted for a plan by agency chairman Kevin Martin that would allow the $3.5 billion deal to proceed, giving it the support of two members on the five-member commission, a source close to the FCC said.

Democratic commissioner Michael Copps recently voted against it, according to another source.

However, the two votes were widely expected and provided no new clues into whether, and under what conditions, the deal ultimately will get the three votes needed for approval.

The two swing votes on the issue, Republican commissioner Deborah Taylor Tate and Democrat Jonathan Adelstein, were still hashing out potential changes to Martin's proposal.

Martin has proposed the commission approve the deal so long as the companies make available to consumers radios that receive both Sirius and XM, cap prices for three years, offer programming on an "a la carte" basis, and make 24 radio channels available for noncommercial and minority programming, among other things.

The FCC decision is the final hurdle in a regulatory marathon for the deal that was first announced in February 2007. Antitrust authorities at the U.S. Justice Department approved the merger this past March.

The merger would bring entertainers such as Oprah Winfrey and shock jock Howard Stern under the same banner. It has been criticized as anti-competitive by the traditional radio industry, and by some U.S. lawmakers.

TALKS HAVE INTENSIFIED

Talks at the FCC have intensified over the last week, with Martin indicating he would be open to modifying the terms to win the support of other commissioners. Martin has said he hoped the commissioners would be ready to vote on the deal by the time the agency holds its next meeting August 1.

Last week, Adelstein said he would provide a potentially decisive third vote if the companies met a stringent set of additional conditions designed to protect consumers and preserve competition.

Under Adelstein's proposal, the price caps would be extended to six years, the number of set-aside channels would be increased to 25 percent of the companies' total capacity. Any new satellite radio receivers on the market that were subsidized by XM and Sirius would have to be built with technology enabling them to also receive high-definition terrestrial radio.

In addition, the companies would have to disclose technical specifications that would enable independent manufacturers to make and sell satellite radios, and they would be barred from passing on increases in programming costs to customers.

Tate declined to comment on the matter when she was asked about it by reporters at a telecommunications conference on Monday.

(Editing by Tim Dobbyn)