Static may be clearing on merger of XM and Sirius satellite radio

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UPDATE JUNE 17: Although Chairman Kevin J. Martin recommended the deal, another commissioner says the deal is still ‘a steep climb’ for him.

... with arguments from Sirius and XM that their merger would not create a monopoly. The reasoning: Devices such as iPods give people growing options for listening to music in their cars and elsewhere. Sirius and XM are desperate for the cost saving of a merger to offset the high expenses of some of their programming, including the aforementioned shock jock, other celebrities such as Oprah Winfrey and professional sports broadcasts.

But the FCC hurdle still remains. Martin pressured the companies to solidify promises they made earlier to Congress, such as offering some lower rates and so-called a la carte channels. He has pushed cable TV operators to offer the latter, in order to cut the cost of service and allow families to avoid objectionable programming. Martin also has sought to lure the votes of other commissioners by seeking new consumer-friendly commitments from Sirius and XM to open the technology for its radios to any manufacturer and to set aside some channels for noncommercial and minority programming.

The channel set-asides and open standards for radios are similar to what Public Knowledge, a digital rights group, has advocated and specifically proposed in March.

‘We support what we have heard today about the commission’s proposals, although we would like to know more about how the set-aside for noncommercial channels would be implemented,’ said the group’s president, Gigi B. Sohn.

But Mark Cooper, director of research from the Consumer Federation of America, still isn’t pleased. Martin’s plan all but admits that Sirius and XM would have a monopoly, and if that’s the case, the conditions don’t go far enough, Cooper said.

‘It’s half-baked, and the consumer loses,’ he said. His organization continues to oppose the merger.

It’s unclear whether Martin has the votes to push through his plan. The other FCC commissioners could not be reached for their reaction this morning. Martin normally waits until he has at least the support of a majority of the five-member commission to start circulating a written proposal, which he is expected to do this week.

But Martin was under intense pressure from Sirius and XM to present a plan before he left for Asia. The companies are not commenting today. But the market is -- both stocks are up about 4% this morning on the news of Martin’s plan.

-- Jim Puzzanghera

Puzzanghera, a Times staff writer, covers tech and media policy from Washington, D.C.

Photo, top: XM and Sirius signs. Credit: Associated Press

Photo, bottom: Kevin Martin. Credit: Bloomberg News