Throwback Thursday

Nine years ago this week, the Federal Communications Commission (FCC) approved the controversial merger of rival satellite radio companies Sirius and XM.

The deal valued at $3.3 billion dollars, took almost a year-and-a-half to complete and produced a combined satellite radio service with 18 million subscribers.

In the face of staunch opposition from consumer groups, legislators, and broadcasters who said the merger would create a monopoly, the FCC approved the merger in a 3-2 vote, ruling that it did not constitute a monopoly because of competition extended beyond terrestrial radio to include online streaming, MP3 players, and other portable devices. FCC chairman Kevin Martin said, "The merger is in the public interest and will provide consumers with greater flexibility and choices."

Still, the merger was subject to conditions: The merged operations were required to cap prices at $12.95/month for three years and provide lower-cost packages that would allow customers to choose the channels they want. The new company came up with an a la carte offerings with 50 channels for $6.99/month or 100 for $14.99/month.

The FCC also "prohibited the merged entity from entering into agreements that would bar any terrestrial radio station from broadcasting live local sporting events."

XM Satellite Radio launched September 25, 2001, later than planned because of the September 11 terrorist attacks, and Sirius Satellite Radio went live in four cities on February 14, 2002 before rolling out nationally on July 1, 2002. Interestingly, the Sirius began as Satellite CD Radio and was renamed CD Radio before evolving into Sirius in 1999, a move to avoid association with the aging CD technology.

Today, Sirius XM has more than 31 million subscribers with packages starting at $10.99/month for 80 channels. The SiriusXM All Access package includes 175 channels plus streaming for $19.99/month.

Related:

In the 2002 feature article: Satellite Radio A to Z, Ken Pohlmann and Leslie Shapiro compared the sound quality of the then separate services XM and Sirius and concluded: “At this stage of the game, XM sounds better than Sirius.”

FCC Says Yes to Sirius/XM Merger (July 29, 2008)

XM + Sirius = More Options (Oct. 1, 2008)

Why I Didn’t Buy the Benz (July 18, 2017)