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 XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. may have closed their deal, but their commitment to the Federal Communications Commission is just starting.
The FCC approved the transaction late Friday, after a 400-plus day review of the controversial $13 billion deal. The new company, which will now be called Sirius XM Radio Inc., closed the merger on Tuesday.
But GOP FCC Commissioner Deborah Tate, who was a wild card in the review, only agreed with her Republican counterparts to approve the deal after they agreed to a number of enforcement conditions. Included in her comments are a number of additional details about conditions on the deal, including instructions that Sirius XM Radio hire an FCC compliance officer to ensure that they meet all the conditions of the deal approval. Two other major conditions: writing a compliance plan for five years that includes sending a report to the FCC every three months and establishing a training program for all employees who engage in "activities subject to FCC regulation." XM and Sirius have agreed to pay $19.7 million to the U.S. Treasury for a variety of violations prior to approving the transaction. XM and Sirius said they are taking steps to address the issue of noncompliant devices that remain in customers' cars. The company also agreed to shut down 50 terrestrial repeaters and either close or "bring into compliance" an additional 50. The compliance protocol are set up, in part, to ensure that Sirius XM won't violate FCC rules in the future as they have in the past. One wonders whether Sirius XM's CEO Mel Karmazin will need to take part in the training program. He presumably will be involved in these kinds of activities. - Ron Orol Ron Orol is a Washington-based reporter for The Deal and author of Extreme Value Hedging: How Activist Hedge Fund Managers Are Taking on the World. CategoriesComments Deal Video
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Who's going to train the five idiots at the FCC?