AeschTunes

The Federal Communications Commission has formally approved the merger of Sirius Satellite Radio and XM Satellite Radio Holdings Inc. The merger was approved by a 3-2 vote. Democratic commissioners Jonathan Adelstein and Michael Copps voted against the merger, while Republican commissioners Kevin Martin and Robert McDowell voted in favor of the merger.

The tiebreaker vote came from Republican commissioner Deborah Taylor Tate. Tate had insisted that the companies settle charges that they violated FCC rules before she would approve the deal. This week, the companies agreed to pay $19.7 million to the U.S. Treasury for violations related to radio receivers and ground-based signal repeaters.

The approval of the merger is a major blow to the land-based radio industry, which had lobbied hard against it. The merger was also opposed by consumer groups, various members of Congress and state attorneys general. All of these groups argued that a satellite radio merger would hurt consumers and was not in the public interest.

Sirius Satellite Radio’s $3.3 billion buyout of XM Satellite Radio means that 18 million-plus subscribers will be able to receive programming from both services. The companies say the merger would lead to greater choice in programming for subscribers and flexible pricing options.

The companies have voluntarily agreed to a set of conditions, which include: a three-year price cap, an 8 percent set-aside of “full-time audio channels” for public interest and minority programming, and an “open radio” standard that could lead to a greater variety of features in radios and greater competition among manufacturers. They have also agreed to include a limited “a la carte” offering that would be available within three months of the close of the deal that would allow listeners to pay only for the channels they want to receive.

However, the final merger agreement did not require the combined company to include a chip in its radios that allows customers to receive digital signals from land-based radio stations.