SiriusXM, FCC Reach Deal on Merger Condition Probe

Satcaster ‘voluntarily’ pays $240,000, investigation of subscription rate increases ends
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SiriusXM is going to make a voluntary contribution to the U.S. Treasury of $240,000 to end an FCC investigation into whether the satcaster honored one of the conditions of its merger agreement.

When the agency approved the merger of Sirius Satellite Radio and XM Satellite Radio in July 2008, the commission said the merged entity could not raise subscription rates for three years.

SiriusXM kept the base subscription rate at $12.99, but the company began charging for its Internet service as well as service to additional receivers and applied a music licensing fee to every subscription.

The commission began looking into SiriusXM’s rates.

In the meantime, the satcaster asked the commission to let the price freeze lapse after three years. After seeking public input, last July, the FCC did, saying the competitive landscape had changed since 2008.

“Sirius XM claims that it ‘faces intense competition from an array of services including AM/FM radio, HD radio, and iPods,’ as well as smartphone applications that permit consumers to stream Internet-based music services while mobile, including in their automobiles,” said the commission in its decision at the time. The FCC also said Pandora had showed “remarkable growth” since the merger and mentioned Rhapsody, Slacker, Last.fm, and iHeartRadio as other examples of Internet- and mobile device-based apps that have emerged since 2008.

SiriusXM increased its base subscription fee to $14.49 per month.

Yet, the commission’s decision not to extend the price cap did not affect the Enforcement Bureau’s investigation, which continued.

SiriusXM also settled a $180 million class action lawsuit on behalf of subscribers last year. 

Now, SiriusXM and the Enforcement Bureau have reached an agreement that ends the agency investigation into whether the satcaster complied with the merger conditions. The satcaster must pay the money within 30 days. The company does not admit guilt and the investigation ends.

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