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Satcasters Confirm Settlement Talks With FCC

Penalties look to be a key part of winning merger approval.

XM and Sirius confirmed this morning they are in settlement discussions with the Enforcement Bureau of the Federal Communications Commission, which they hope is a last step toward getting their merger deal approved.

The companies hope to enter into a Consent Decree with the commission terminating the inquiries regarding radios with modulated FM transmitters that were over-powered and the compliance of some terrestrial repeaters that were in the wrong location, over-powered or both.

They’re discussing a possible fine of $17 million for XM and about $2 million for Sirius, although in the case of a Consent Decree, the money usually is called a voluntary contribution to the U.S. Treasury, rather than a penalty, and the amount is not marked as a fine on the companies’ official record with the commission.

The companies said as part of any possible agreement, they expect to agree to adopt compliance plans, and take steps to address any potentially non-compliant radios remaining in the hands of consumers. XM would, within 60 days of an agreement, shut down 50 variant terrestrial repeaters, and shut down or bring into compliance an additional 50 variant terrestrial repeaters; Sirius would bring into compliance up to 11 repeaters within 60 days of the order adopting the Consent Decree. Sirius says it shut off these repeaters in October 2006.

The companies were careful to say there are no assurances the Enforcement Bureau would agree to these conditions or a settlement at all.

This all reminds me of years ago when Infinity, led by Mel Karmazin, paid the big Howard Stern fine for indecency and got its slate wiped clean, so the company was free to acquire more stations. That too was also a Consent Decree, involving a voluntary payment to the U.S. Treasury.