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Sirius, XM Agree To $20M FCC Fine

Washington — Following reports that the Federal Communications Commission (FCC) would approve a satellite radio merger if Sirius and XM pay a $20 million fine for past FCC violations, Sirius and XM said this morning they have agreed to pay the $20 million fine along with other conditions.

Sirius and XM said they are in talks with the FCC’s Enforcement Bureau to establish a Consent Decree that would close a 2006 FCC investigation of the companies.

XM said it will make a voluntary contribution to the U.S. Treasury of approximately $17 million and Sirius will contribute $2 million, as terms of a potential Consent Decree with the FCC that would terminate an FCC investigation initiated in 2006 into certain XM and Sirius repeaters and radios.

XM also promised that within 60 days of the Consent Decree it will shut down 50 variant terrestrial repeaters that pass along its signal, and either shut down or bring into compliance an additional 50 variant terrestrial repeaters.

Sirius said it already shut down 11 variant repeaters.

The companies stated there is no assurance yet that the FCC will approve the Consent Decree, and they did not confirm that the Consent Decree would result in the FCC approval that the companies have sought since they announced the merger 17 months ago.

Reports from the Wall Street Journal and various news agencies said yesterday that Commissioner Deborah Taylor Tate will cast the deciding vote in favor of the merger under the proviso that the merged company pay a $20 million fine for alleged past violations of FCC rules and possibly other considerations.

Detractors of the merger have argued the FCC should not approve the Sirius/XM merger, in part because the companies violated FCC rules in the past in the placement of their repeaters, in the signal strength of their radios, and in failing to market an interoperable (dual-service) radio.

An FCC staffer told TWICE that Tate “will vote” but did not say when or how she will vote.