Federal Communications Commission FCC 08-178
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Applications for Consent to the 
Transfer of Control of Licenses
XM Satellite Radio Holdings Inc.,
Transferor
To
Sirius Satellite Radio Inc.,
Transferee
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MB Docket No. 07-57
MEMORANDUM OPINION AND ORDER AND REPORT AND ORDER
Adopted:  July 25, 2008 Released: August 5, 2008
By the Commission: Chairman Martin and Commissioners Tate and McDowell issuing separate 
statements; Commissioners Copps and Adelstein dissenting and issuing separate 
statements.
TABLE OF CONTENTS
Heading Paragraph #
I. INTRODUCTION.................................................................................................................................. 1
II. DESCRIPTION OF APPLICANTS....................................................................................................... 8
A. XM Satellite Radio Holdings Inc..................................................................................................... 8
B. Sirius Satellite Radio Inc................................................................................................................ 14
C. The Proposed Transaction.............................................................................................................. 20
D. Post-Merger Operations ................................................................................................................. 23
E. Applications and Review Process.................................................................................................. 26
1. Commission Review................................................................................................................ 26
2. Department of Justice Review................................................................................................. 29
III. STANDARD OF REVIEW AND PUBLIC INTEREST FRAMEWORK .......................................... 30
IV. POTENTIAL PUBLIC INTEREST HARMS...................................................................................... 35
A. Introduction.................................................................................................................................... 35
B. Potential Competitive Harms ......................................................................................................... 36
1. Potential Horizontal Effects..................................................................................................... 37
a. Record Evidence on Defining the Relevant Markets........................................................ 37
b. Competitive Analysis Under Worst-Case Assumptions ................................................... 48
2. Potential Vertical Effects......................................................................................................... 59
C. Other Potential Public Interest Harms............................................................................................ 69
1. Impact of the Transaction on Diversity ................................................................................... 70
2. Impact of the Transaction on Broadcasters Advertising Revenues........................................ 73
V. POTENTIAL PUBLIC INTEREST BENEFITS.................................................................................. 75
A. Analytical Framework.................................................................................................................... 75
B. Claimed Benefits............................................................................................................................ 77
1. Increased Programming Options/Lower Prices....................................................................... 78
Federal Communications Commission FCC 08-178
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a. New Programming Packages ............................................................................................ 79
b. A la Carte Programming ................................................................................................... 85
2. Accelerated Deployment of Advanced Technology................................................................ 94
3. Commercial Availability of Interoperable Satellite Radio Receivers ..................................... 96
4. Operational Efficiencies .......................................................................................................... 99
VI. BALANCING PUBLIC INTEREST HARMS AND BENEFITS ..................................................... 104
A. General Introduction and Summary............................................................................................. 104
B. Applicants Voluntary Commitments and Other Conditions....................................................... 105
1. Price Cap ............................................................................................................................... 105
2. New Programming Packages and A La Carte Options.......................................................... 111
3. Interoperable Radio Receivers............................................................................................... 113
4. Open Access .......................................................................................................................... 126
5. Third-Party Access to SDARS Capacity............................................................................... 131
6. Reservation of Channels for Noncommercial Educational Use ............................................ 136
7. Service to Alaska, Hawaii, and Puerto Rico.......................................................................... 147
C. Other Issues.................................................................................................................................. 151
1. Spectrum Givebacks.............................................................................................................. 151
2. No Local Programming or Local Advertising....................................................................... 154
VII. COMPLIANCE WITH COMMUNICATIONS ACT AND COMMISSIONS RULES 
AND POLICIES ....................................................................................................................................... 156
A. 1997 SDARS Report & Order ..................................................................................................... 156
B. Enforcement Matters.................................................................................................................... 164
VIII. PROCEDURAL MATTERS ........................................................................................................... 175
IX. ORDERING CLAUSES..................................................................................................................... 180
APPENDIX A: Licenses to be Transferred
APPENDIX B: Voluntary Commitments
APPENDIX C: Timeline of Commitments 
I. INTRODUCTION
1. In this Memorandum Opinion and Order and Report and Order (Order), we consider 
the consolidated application of Sirius Satellite Radio Inc. (Sirius) and XM Satellite Radio Holdings Inc. 
(XM, or jointly, the Applicants) for consent to the transfer of control of the licenses and 
authorizations held by Sirius and XM, and their subsidiaries, for the provision of satellite digital audio 
radio service (or SDARS) in the United States.1 The Application is filed pursuant to section 310(d) of 
  
1 Consolidated Application for Authority to Transfer Control of XM Radio Inc. and Sirius Satellite Radio Inc., XM 
Satellite Radio Holdings Inc., Transferor, and Sirius Satellite Radio Inc., Transferee (Mar. 20, 2007) 
(Application).  The Media Bureau placed the Application on public notice on June 8, 2007, establishing a 
comment cycle for this proceeding.  See Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. Seek 
Approval to Transfer Control of FCC Authorizations and Licenses, 22 FCC Rcd 1032 (2007) (Jun. 8, 2007 Public 
Notice).  On June 25, 2007, Applicants supplemented their Application with a further license transfer application.  
See Letter from Jennifer D. Hindin, Wiley Rein LLP, on behalf of Applicants, to Marlene H. Dortch, Secretary, FCC 
(June 25, 2007), attaching Form 312, Call Sign E060363.  The supplemental application was accepted for filing on 
September 26, 2007.  See Report No. SES-00966 (Earth Station Application SES-T/C-20070625-00863).  That 
supplemental filing is deemed associated with the Application, which incorporates by reference the applications for 
approval of the transfer of control of those facilities listed in Appendix A hereto.  On March 29, 2007, the 
Commission released a public notice designating this proceeding as permit but disclose for purposes of the 
Commissions ex parte rules.  See XM Satellite Radio Holdings, Inc. and Sirius Satellite Radio, Inc. Seek Approval 
To Transfer Control Of Licensee Entities Holding FCC Licenses and Other Authorizations, 22 FCC Rcd 5548 
(2007).  On June 27, 2007, the Media Bureau initiated a rulemaking proceeding in MB Docket No. 07-57 seeking 
comment on whether language included in the 1997 Order establishing SDARS, which prohibited the transfer of 
(continued.)
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the Communications Act of 1934, as amended (Communications Act or Act), and Sections 1.948 and 
25.119 of the Commissions rules.2 Applicants assert that grant of the Application will generate 
substantial, merger-specific public interest benefits and will not harm competition in any market because 
a combined satellite radio provider will have no market power.3 Based on the review of the record as set 
forth in the discussion below, we find that grant of the Application, with Applicants voluntary 
commitments4 and other conditions discussed herein, is in the public interest.
2. Applicants operate satellite digital audio radio services in the 2320 to 2345 MHz 
spectrum band as authorized by the Commission after auction in 1997.5 XM commenced service in 
September 2001, and Sirius began service in February 2002.6 In order to establish fully a nationwide 
(Continued from previous page)    
control of one SDARS licensee to the other, constitutes a binding rule.  Applications for Consent to the Transfer of 
Control of Licenses, XM Satellite Radio Holdings, Inc., Transferor, to Sirius Satellite Radio Inc., Transferee, Notice 
of Proposed Rule Making, 22 FCC Rcd 12018 (2007) (2007 SDARS NPRM).  See Section VII.A. for discussion of 
the rulemaking proceeding.  On December 7, 2007, Sirius filed an informational Form 312 application for a new 
space station license that was granted to Sirius on April 16, 2007, approximately one month after the Application 
was filed.  Sirius requests that the Commission take the new license into account in its processing of the Application.  
See Letter from Jennifer D. Hindin, Wiley Rein LLP, Counsel for Sirius, to Marlene H. Dortch, Secretary, FCC 
(Dec. 7, 2007).  We grant the request and associate the new space station license with all other authorizations and 
licenses as identified in Appendix A.
2 47 U.S.C.  310(d); 47 C.F.R.  1.948, 25.119.
3 Application at 2.
4 Letter from Richard E. Wiley, Robert L. Pettit, Wiley Rein LLC, Counsel for Sirius, and Gary M. Epstein, James 
H. Barker, Latham & Watkins LLP, Counsel for XM, to Kevin J. Martin, Chairman, FCC (June 16, 2008), 
Attachment, Letter dated June 13, 2008 from Richard E. Wiley, Robert L. Pettit, Wiley Rein LLP, Counsel for Sirius 
and Gary M. Epstein, James H. Barker, Latham & Watkins LLP, Counsel for XM, to Kevin J. Martin, Chairman, 
FCC (June 13, 2008) (Applicants June 13, 2008 Ex Parte); Letter from Richard E. Wiley, Counsel for Sirius and 
Gary M. Epstein, Counsel for XM, to Kevin J. Martin, Chairman, Michael Copps, Commissioner, Jonathan 
Adelstein, Commissioner, Deborah Tate, Commissioner, and Robert McDowell, Commissioner, FCC (July 25, 
2008), transmitted by Letter from Robert L. Pettit, on behalf of Applicants, to Marlene H. Dortch, Secretary, FCC 
(July 25, 2008) (Applicants July 25, 2008 Ex Parte).
5 See American Mobile Radio Corporation Application for Authority to Construct, Launch, and Operate Two 
Satellites in the Satellite Digital Audio Radio Service, Order and Authorization, 13 FCC Rcd 8829 (Intl Bur. 1997) 
(1997 XM Authorization Order), modified by 16 FCC Rcd 18484, application for review denied, 16 FCC Rcd 
21431 (2001), affd sub nom. Primosphere Ltd. Partnership v. FCC (Case Nos. 01-1526 and 1527), 2003 WL 
472239 (C.A.D.C. Feb. 21, 2003); XM Radio Inc., Order and Authorization, 20 FCC Rcd 1620 (Intl Bur. 2005) 
(2005 XM Authorization Order).  The Commission originally licensed Sirius to launch and operate two satellites 
in geostationary orbit at the 80 and 110 West Longitude orbital locations. See Satellite CD Radio, Inc. Application 
for Authority to Construct, Launch, and Operate Two Satellites in the Satellite Digital Audio Radio Service, Order 
and Authorization, 13 FCC Rcd 7971 (Intl Bur. 1997) (1997 Sirius Authorization Order), application for review 
denied, 16 FCC Rcd 21458 (2001), affd sub nom. Primosphere Ltd. Partnership v. FCC (Case Nos. 01-1526 and 
1527) ), 2003 WL 472239 (C.A.D.C. Feb. 21, 2003).  Sirius later requested, and was granted, authority to change its 
satellite configuration from two geostationary satellites to three satellites in non-geostationary satellite orbits 
(NGSO). See Sirius Satellite Radio Inc., Application for Minor Modification of License to Construct, Launch and 
Operate a Non-Geostationary Satellite Digital Audio Radio Service System, Order and Authorization, 16 FCC Rcd 
5419 (Intl Bur. 2001).  SDARS is commonly referred to as satellite radio.  The Commissions rules define 
SDARS as [a] radio communication service in which audio programming is digitally transmitted by one or more 
space stations directly to fixed, mobile, and/or portable stations, and which may involve complementary repeating 
terrestrial transmitters, telemetry, tracking and control facilities.  47 C.F.R.  25.201.  The term DARS refers to 
the same service that we refer to in this document as SDARS.
6 Application at 3, 5.
Federal Communications Commission FCC 08-178
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radio service, both SDARS licensees operate terrestrial repeaters in areas where satellite signal reception 
is blocked by trees, buildings, or tunnels.7 Together, Sirius and XM offer hundreds of channels of music, 
entertainment, news, and sports programming, as well as weather and data information services for 
maritime, aeronautical and other purposes.  In addition, Sirius offers video service in select vehicles 
equipped with a Sirius Backseat TV receiver.8 As of December 31, 2007, Applicants, collectively, had 
approximately 17.3 million subscribers in the United States.9 SDARS radio receivers are used in cars, 
trucks, boats, aircraft, and homes, and are available for portable use.  Applicants also provide content to 
subscribers using streaming audio over the Internet as well as direct broadcast satellite (DBS) and 
wireless networks.10 The current fee charged by each of Applicants for its basic SDARS service is $12.95 
per month.11
3. As a result of the merger, Applicants maintain that consumers will be able to customize 
their programming options by selecting among several new and smaller programming packages, as well 
as two a la carte packages.12 Applicants assert that these new programming features will provide greater 
discretion to parents to control the programming their children receive because parents may individually 
select which programs to receive or may select programming packages that do not include any adult or 
other objectionable content.13 Applicants indicate that, post-merger, subscribers will not pay more for the 
content they currently receive.14 Thus, subscribers who choose to do so may continue to receive the same 
content for $12.95 per month and will not be harmed by the introduction of the a la carte and smaller 
programming packages proposed by Applicants.  Applicants claim that permitting consumers to 
individually select channels will allow the combined company to make choices about content based on 
the choices made by subscribers, thus leading to the creation of more programming that consumers 
actually want.15 Applicants further voluntarily commit to not raising the rates for either their current 
packages or these new packages for three years.16 In addition, we are prohibiting Applicants from 
  
7 Id. at 4, 6.
8 Sirius Backseat TV is currently offered in Dodge, Chrysler and Jeep vehicles.  The service includes live 
television from three networks: Nickelodeon, Disney Channel and Cartoon Network.  See Sirius, 
http://www.sirius.com/backseattv (visited June 24, 2008).
9 XM Radio reported 9.03 million subscribers as of December 31, 2007.  See XM Radio Holdings Inc. SEC Form 
10-K for the Fiscal Year Ended Dec. 31, 2007 (XM Form 10-K) at 34.  Sirius reported 8,321,785 subscribers as of 
that date.   Sirius Satellite Radio, Inc. SEC Form 10-K for the Fiscal Year Ended Dec. 31, 2007 (Sirius Form 10-
K) at 3.   
10 See Sections II.A-B for a complete description of the services offered by Applicants.  
11 Application at ii.
12 See Section V.B.1. for discussion of new programming packages and prices, including A La Carte I and A La 
Carte II options.  Applicants indicate that in the near term, subscribers will have to own two legacy receivers (one 
Sirius receiver and one XM receiver) to receive the complete offerings of both services because the combined 
company must continue to operate both legacy systems.  Application at 12 n.27.  The a la carte programming 
features will be available to customers who select their channels through the Internet and purchase next-generation 
radios.  Joint Opposition at 11; see also Applicants Supplemental Comments Regarding the Benefits of A La Carte 
(Supp. Comments) at 2; Applicants June 13, 2008 Ex Parte.  
13 Applicants indicate that the combined company will provide subscribers a credit or rebate on their subscription fee 
if they choose to block adult programming.  Application at 10, n.25, 12; see also Supp. Comments at 4. 
14 Supp. Comments at 10.
15 Id. at 5.
16 Applicants June 13, 2008 Ex Parte at 5.  Applicants state that they may pass on some increases in programming 
costs after the first anniversary of the mergers consummation.  Id.
Federal Communications Commission FCC 08-178
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reducing the number of channels in either their current packages or these new packages for three years.
4. To obtain Commission approval, Applicants must demonstrate that the proposed 
transaction will serve the public interest, convenience, and necessity pursuant to Section 310(d) of the 
Act.17 The Commission weighs any potential public interest harms of proposed transactions against any 
potential public interest benefits.18 Applicants have the burden of proving that the proposed transaction, 
on balance, serves the public interest by a preponderance of the evidence.19
5. We note that the Commission had been investigating Applicants compliance with certain 
Commission regulations. On July 25, 2008, the Commission adopted Orders which adopted the Consent 
Decrees entered into between the Commission and XM, and the Commission and Sirius. These Consent 
Decrees terminated our investigations into Applicants compliance with the Commissions regulations 
governing FM modulators and terrestrial repeaters.  These issues are discussed in Section VII, below.
6. Based on the record before us, we conclude that the proposed transfer of control would 
violate our rule against one licensee controlling both SDARS licenses.  We also conclude that, absent 
Applicants voluntary commitments and other conditions discussed below, the proposed transaction 
would increase the likelihood of harms to competition and diversity.  As discussed below, assuming a 
satellite radio product market, Applicants would have the incentive and ability to raise prices for an 
extended period of time.  This is more likely given the spectrum and cost barriers which prevent entry by 
new SDARS providers that could offer consumers an alternative outlet for satellite radio service.  In 
particular, additional spectrum is not available at this time without spectrum divestiture, which we have 
determined is inappropriate in light of the considerable financial investment needed to successfully 
operate an SDARS service, as well as the technical complications that might result from such 
divestiture.20  Additionally, the regulatory and other business aspects involved in the start-up of such a 
cost-intensive operation make effective competitive entry unlikely within any relevant time horizon.  
7. Applicants, however, have proposed significant voluntary commitments regarding steps 
the merged company would take to mitigate harms and achieve public interest benefits. We find that 
absent those voluntary commitments and other conditions, the harms of the transaction would outweigh 
the potential public interest benefits. On balance, however, we find that with Applicants voluntary 
commitments and other conditions, the potential public interest benefits outweigh the harms.
Accordingly, we conclude that repeal of the 1997 rule barring common ownership of SDARS licensees 
will serve the public interest. We also conclude that the transaction, with all of Applicants voluntary 
commitments and other conditions, will serve the public interest, and we condition grant of the 
Applications on the merged firms fulfillment of Applicants voluntary commitments and other 
  
17 47 U.S.C.  310(d); see also Applications for Consent to the Assignment And/Or Transfer of Control of Licenses, 
Adelphia Comm. Corp., (and Subsidiaries, Debtors-In-Possession), Assignors, to Time Warner Cable Inc. 
(Subsidiaries), Assignees, Adelphia Comm. Corp., (and Subsidiaries, Debtors-In-Possession), Assignors and 
Transferors, to Comcast Corp. (Subsidiaries), Assignees and Transferees, 21 FCC Rcd 8203, 8217  23 (2006) 
(Adelphia Order); General Motors Corp. and Hughes Elec. Corp., Transferors, and The News Corp. Ltd., 
Transferee, for Authority to Transfer Control, 19 FCC Rcd 473, 485  18 (2004) (News Corp.-Hughes Order); 
Application of EchoStar Comm. Corp., General Motors Corp., Hughes Elec. Corp., (Transferors), and EchoStar 
Comm. Corp., (Transferee), Hearing Designation Order, 17 FCC Rcd 20559, 20574  25 (2002) (EchoStar-
DIRECTV HDO).
18 News Corp.-Hughes Order, 19 FCC Rcd at 477  5.
19 Id. at 483  15.
20 See Section VI.C.1.
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conditions.21 Although we find it unnecessary to impose a condition requiring the inclusion of chips for 
digital audio broadcast (DAB) or HD Radio  in SDARS receivers,22 we believe that important 
questions have been raised about DAB that warrant further examination in a separate proceeding. As 
discussed in Section VI.B.4, the Commission commits to initiating a notice of inquiry within 30 days after 
adoption of this Order to gather additional information on the issue. 
II. DESCRIPTION OF APPLICANTS
A. XM Satellite Radio Holdings Inc.
8. XM is a publicly traded Delaware corporation23 headquartered in Washington, D.C.  XM 
stock is traded on the NASDAQ Global Select Market under the symbol XMSR.24 XM operates using 
12.5 MHz of spectrum in the 2332.5-2345 MHz frequency band.25 This represents half of the available 
25 MHz of SDARS spectrum.26 XM obtained a license to use this half of the available 25 MHz of 
SDARS spectrum through Commission auction conducted in April 1997.27
9. XM commenced operations in September 2001 and currently offers over 170 channels of 
music (including some commercial-free music channels), sports, news, talk and entertainment to its 
subscribers.28 As of December 31, 2007, XM reported having over 9.03 million subscribers in the United 
States.29 XMs programming includes channels devoted to broadcasts of Major League Baseball (MLB), 
  
21 Compare Applications of Ameritech Corp., Transferor, and SBC Comm., Inc., Transferee, 14 FCC Rcd 14712, 
14712  2 (1999) (SBC-Ameritech Order).
22 In 2002, the Commission adopted a single DAB transmission standard referred to as in-band, on-channel 
(IBOC ), developed by iBiquity Digital Corp. (iBiquity), as the technology that would permit AM and FM radio 
broadcasters to introduce digital operations.   HD Radio is part of iBiquitys brand name for its digital AM and 
FM radio technology.  HD Radio, http://www.hdradio.com/faq.php.  The term HD Radio in this Order refers to 
DAB operations.  See Section VI.B.4, infra. 
23 Application at 4.
24 XM Form 10-K at 29.
25 Application at 4.
26 SDARS is a domestic implementation of the Broadcasting Satellite Service (sound) (BSS (sound)) that was 
created as a result of the 1992 World Administrative Radio Conference. See International Telecommunications 
Union, Final Acts of the World Admin. Radio Conf. (Malaga-Torremolinos, 1992).  The Commission originally 
allocated 50 megahertz of spectrum for SDARS on a primary basis in the 2310-2360 MHz frequency band to match 
the international allocation for BSS (sound) in this band.  See Amendment of the Commissions Rules with Regard to 
the Establishment and Regulation of New Digital Audio Radio Services, Report and Order, 10 FCC Rcd 2310 (1995) 
(SDARS Allocation Order).  Congress, however, subsequently directed the Commission to reallocate spectrum at 
2310-2320 MHz and 2345-2360 MHz for terrestrial wireless services.  See Omnibus Consolidated Appropriations 
Act, 1997, Pub. L. 104-208, 110 Stat. 3009 (1996). As a result, 25 MHz of spectrum at 2320-2345 MHz remains 
allocated exclusively for SDARS, although the Commission retained SDARS as a primary allocation throughout the 
2310-2360 MHz frequency bands.  See U.S. Table of Frequency Allocations, 47 C.F.R.  2.106.
27 See Public Notice, FCC Announces Auction Winners for Digital Audio Radio Service, 12 FCC Rcd 18727 
(1997) (1997 SDARS Public Notice).
28 XM Form 10-K at 2.  In addition, XM states that it has advertising sales offices in several major media markets to 
sell directly to advertising agencies and media buying groups, and has sold advertising programs and sponsorships to 
hundreds of advertisers and agencies, including many Fortune 500 companies.  Id. at 7.
29 Id. at 34.  XM Canada launched its satellite radio service in Canada in November 2005, offering over 130 
channels for a monthly subscription fee of CDN $14.99.  Subscribers to XM Canada are not included in the 
subscriber totals for the United States. Id. at 6.
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National Hockey League (NHL), Indy Racing League and college sports.30 XM also carries ESPN Radio, 
ESPN News, Fox Sports, and XM Sports Nation (XMSN).31 Some of XMs programming is available in 
languages other than English and targets niche audiences.  XM provides 21 dedicated traffic and weather 
channels for several large U.S. metropolitan areas,32 and offers a free-to-air channel for which no 
subscription is required that broadcasts emergency alerts, safety information, and Amber alerts on a 24-
hour/7-days-a-week basis.33 XM also offers content to subscribers using streaming audio over the 
Internet.  XM original music, news and sports series are available as free podcasts for download through 
xmradio.com and Apple Inc.s iTunes Store.34 XM is available at participating Avis, National, and 
Alamo car rental locations, and on certain AirTran, JetBlue, and United airplanes.35
10. XM has agreements to include an SDARS receiver as a factory-installed feature or a 
dealer-installed option in over 140 different vehicle models for model year 2008 with General Motors, 
Honda/Acura, Toyota/Lexus/Scion, Hyundai and Nissan/Infiniti, among others.36 XMs receivers are also 
available aftermarket at retailers nationwide and through XMs website.37
11. XM reports that it transmits content throughout the contiguous United States to vehicles, 
portable receivers, home and plug-and-play radios, some of which are capable of receiving both XM 
content and traditional AM/FM terrestrial radio stations.38 XMs portable, handheld products include the 
Inno, which allows consumers to bookmark songs heard on XM, connect the Inno to a personal 
computer, and purchase the songs from the XM + Napster online service.39 XM plug-and-play radios 
include the Xpress, which features split screen display and 30-minute pause and replay.40 XM-ready 
  
30 XMs college sports programming includes the Atlantic Coast Conference, Pacific-10 Conference, Big Ten 
Conference, Big 12 Conference, Southeastern Conference and Big East Conference, PGA Tour, U.S. Open Tennis, 
and XM Deportivo.  Id. at 3.
31 XM offers a variety of talk formats, news and religious programming, such as Oprah & Friends, the Dr. Laura 
Show, the Food Network, HGTV, the Good Morning America Radio Show, Fox News, CNN, and C-Span.  XM 
offers comedy channels, including the Opie & Anthony Show, and a medical information channel called 
ReachMD.  XM has additional news/talk/information/entertainment programming, including CNBC, Bloomberg, 
Fox Talk, CNN Headline News, The Bob Edwards Show, BBC Worldservice, The Power and CNN en Espaol.  Id. 
at 3-4.
32 Id. at 4.
33 Application at 5.
34 XM Form 10-K at 7.  XM Online, a subset of XMs satellite radio service, is available over the Internet as part of 
the basic radio subscription price of $12.95 per month, and can also be purchased as a standalone service for $7.99 
per month.  XM Online includes many of the commercial-free music channels available on XMs satellite radio 
service, several channels which are exclusively programmed for XM Online and various XM original 
news/talk/information channels, including XM Kids, P.O.T.U.S. 08, The Bob Edwards Show, XM Comedy, Laugh 
USA, Oprah & Friends, and The Virus, featuring Opie & Anthony.  Id. at 6.  Through DIRECTV, XM offers several 
channels of XMs music, childrens and talk programming to DIRECTVs customers.  Id.
35 Id. at 7.
36 Id. at 4.  XM also has agreements with automotive manufacturers Ferrari, Isuzu, Lotus, Subaru, Suzuki, Porsche 
and Harley-Davidson as either a dealer and/or factory-installed option in several models.  Id. at 5.
37 Id. at 5.
38 Id. at 7.
39 Id. at 5.
40 Id.
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and Mini-Tuner technologies integrate into a broad range of home devices such as stereo receivers and 
DVD players by allowing consumers to connect an XM Mini-Tuner into an XM-ready receiver.41 XMs 
advanced technology applications include XM NavTraffic which provides continuously updated real-
time traffic information for 80 major metropolitan areas across the United States for a monthly fee.42 XM 
aviation and marine applications include the XM WX weather service, which provides real-time 
graphical weather data.43
12. XM primarily provides its service directly to subscribers via satellite.  XM, through its 
100 percent owned subsidiary, XM Radio Inc. (XM Radio),44 is licensed to operate four satellites in 
geostationary orbit at or near the 85 W.L. and 115 W.L. orbital locations.45  From these orbital 
locations, XM is able to provide service to the contiguous United States, or CONUS, as well as parts of 
Alaska.46 XM operates a network of terrestrial repeaters, pursuant to grants of special temporary 
authority, in order to improve the quality of its signal in areas in which the signal may be obstructed, such 
as by tall buildings and tunnels.47
13. XM Radio holds three authorizations for transmit/receive earth stations that are licensed 
to communicate with XMs satellites in the S- (2320-2345 MHz), C- (4/6 GHz), and X- (7025-7075 GHz)
bands.48 XM Radio also holds an experimental license under Part 5 of the Commissions rules.49
B. Sirius Satellite Radio Inc.
14. Sirius is a publicly traded Delaware corporation and is headquartered in New York City, 
New York.50 Sirius stock is traded on the NASDAQ Global Select Market under the symbol SIRI.51  
Sirius operates using 12.5 MHz of spectrum in the 2320-2332.5 MHz frequency band.  Sirius obtained a 
license to use its half of this spectrum through an auction conducted in April 1997.52
15. Sirius commenced service in February 2002, and currently offers over 130 channels, 
including 69 channels of commercial-free music, 54 channels of sports, news, talk, and entertainment, and 
11 channels of traffic, weather, and informational data services.53 As of December 31, 2007, Sirius 
  
41 Id.
42 Id.
43 Id.
44 Application, Attachment A.
45 1997 XM Authorization Order, 13 FCC Rcd at 8850  51-52; 2005 XM Authorization Order, 20 FCC Rcd at 
1620  1.
46 Application at 6.
47 Id.  See also XM Radio Inc., Application for Special Temporary Authority to Operate Satellite Digital Audio 
Radio Service Complementary Terrestrial Repeaters, Order and Authorization, 16 FCC Rcd 16781 (Intl Bur. 2001) 
(XM Radio STA Order); XM Radio, Inc., Order, FCC 08-177 (adopted July 25, 2008) (XM Consent Decree 
Order), as discussed in Section VII.B., infra.
48 Application at 53.
49 Id. (call sign WB2XCA).
50 Sirius Form 10-K at 13.
51 Id. at 24. 
52 See 1997 SDARS Public Notice. 
53 Application at 3; see also Sirius Form 10-K at 5.
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reported 8,321,785 subscribers in the United States.54 Siriuss musical offerings consist of channels 
dedicated to genres such as pop, rock, electronic, hip hop, rhythm and blues, country, Christian, blues, 
jazz, classical, Latin, big band, and show tunes.55 Sports programming includes coverage of the National 
Football League (NFL), National Basketball Association (NBA), National Association of Stock Car Auto 
Racing (NASCAR), and college sports and other sports programming, such as ESPN Radio, ESPN News 
and ESPN Deportes, which is ESPNs Spanish language programming.56
16. Several of Siriuss music, news, and talk channels are available in languages other than 
English or target niche audiences, and include, among other programs, Howard Stern, Martha Stewart, 
and Barbara Walters.57 Sirius news and information channels include BBC World Service News, 
Bloomberg Radio and CNBC.58 Sirius reports that its 11 channels of traffic and weather cover 20 
metropolitan markets throughout the United States, and include one channel dedicated to emergency 
information and the transmission of emergency messages as part of the Emergency Alert System (EAS). 59
17. In 2007, Sirius introduced Sirius Backseat TV, a television service offering content 
designed primarily for children from Nickelodeon, Disney Channel and Cartoon Network in the backseat 
of vehicles.60 Sirius also provides streaming audio content to subscribers via the Internet, and music 
channels to DISH satellite television and Sprint mobile telephone subscribers.61
  
54 Sirius Form 10-K at 3.  In 2005, Sirius Canada launched its service in Canada offering 110 channels of 
commercial music and news, sports, talk and entertainment programming, including 11 channels of Canadian 
content and the Howard Stern 100 channel for CDN $14.99 per month.  As of October 2007, Sirius Canada had 
more than 500,000 subscribers.  Subscribers to Sirius Canada are not included in the subscriber total for the United 
States.  Id. at 10.
55 Application at 3.
56 Sirius Form 10-K at 5-6.  Sirius carries play-by-play coverage of football, basketball and other sports from 18 
NCAA Division I Conferences, and has the right to broadcast all games of the NCAA Division I mens basketball 
tournament through 2009.  Sirius also airs Wimbledon Championships, Arena Football League, National Lacrosse 
League and horse racing.  Id. at 6.  
57 Id.  Religious programming includes the Catholic Channel, programmed with the assistance of the Archdiocese of 
New York.  Other religious programming includes EWTN Global Catholic Radio Network and Family Net Radio, 
programmed by Family Net, an affiliate of the Southern Baptist Convention.  Id.
58 Id.  Sirius also carries CNN, Fox News, National Public Radio and the World Radio Network.  Id.  Additional 
content services offered by Sirius include Sirius Music for Business, a music service for commercial entities 
available through Applied Media Corporation, Dynamic Media, Turn Key Media and Info Hold Inc.  Id. at 10.  
Siriuss marine weather service features information on weather and wave heights to sea surface temperatures for 
recreational boaters and covers the 48 contiguous states and waters extending hundreds of miles into the Atlantic 
and Pacific Oceans, Gulf of Mexico and Caribbean.  Id.
59 Id. at 6; see also Application at 3.  The metropolitan areas covered are New York, Boston, Philadelphia, Los 
Angeles, Chicago, St. Louis, Washington D.C., Baltimore, Atlanta, Miami, Dallas, Houston, Detroit, Las Vegas, San 
Francisco, Seattle, Phoenix, San Diego, Tampa, and Orlando.  SIRIUS, http://www.sirius.com/trafficweather  
(visited June 17, 2008). 
60 See Sirius, SIRIUS Satellite Radio Launches the First Aftermarket Satellite Radio Tuner That Can Receive 
SIRIUS Backseat TVTM (press release) Aug. 15, 2007.
61 See Application at 3.  Sirius offers graphic information on road closings, traffic flow and incident data to 
consumers with in-vehicle navigation systems, and a marine weather service that provides a range of information, 
including sea surface temperatures, wave heights and extended forecasts to recreational boaters.  See Sirius Form 
10-K at 4.  Sirius states that it intends to launch Sirius Travel Link, a suite of data services that includes real-time 
traffic, tabular and graphical weather, fuel prices, sports schedules and scores, and movie listings.  Sirius Travel 
(continued.)
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18. Sirius has agreements with automobile manufacturers to include an SDARS receiver in 
vehicles as a factory or dealer-installed option in 116 vehicle models, and as a dealer only installed option 
in 37 vehicle models.62 Sirius receivers are also available for installation in homes, automobiles, boats, 
and aircraft, and may be purchased through its website, as well as through retailers nationwide.63 Sirius 
radios are also offered to renters of Hertz vehicles at airport locations nationwide.64
19. Sirius primarily provides its service directly to subscribers via satellite.  Sirius, through 
its 100 percent owned subsidiary, Satellite CD Radio, Inc. (Satellite CD Radio),65 holds a license from 
the Commission to operate a fleet of three satellites in highly-elliptical orbits (HEO).66 Sirius also 
holds an authorization to launch and operate a satellite in geostationary satellite orbit (GSO) at the 96 
West Longitude (W.L.) orbital location in conjunction with Siriuss three HEO satellites, but has not yet 
launched this satellite.67 Sirius serves subscribers throughout the 48 contiguous United States via its 
satellite system.  Sirius operates a network of terrestrial repeaters in urban areas, pursuant to grants of 
special temporary authority, in order to improve the quality of reception in areas where there is 
interference to the satellite signal from tall buildings, tunnels, heavy foliage or other obstructions.68 In 
addition to its satellite licenses, Sirius holds four authorizations for transmit/receive earth stations that are 
licensed to communicate with Siriuss satellites in the S- (2320-2345 MHz), C- (4/6 GHz), X- (7025-7075 
(Continued from previous page)    
Link is expected to be standard on Fords next generation navigation system and offered on select Ford, Lincoln and 
Mercury vehicles in 2008.  Id.  
62 Sirius Form 10-K at 7.  Sirius satellite radio is available in Chrysler, Dodge, Jeep, Mercedes-Benz, Ford, 
Mitsubishi, BMW,  Freightliner LLC, Volkswagen, Kia, Audi, Lincoln, Mercury, Mazda, Land Rover, Jaguar, 
Aston Martin, MINI, Maybach, Bentley Motors Inc., Rolls-Royce, Toyota, Sterling, Peterbilt, Kenworth, Volvo, 
International and Scion vehicles.  Id. at 7-8.
63 Id. at 3.  Sirius also offers a variety of portable radios.  Id. at 3.
64 Sirius Form 10-K at 4. 
65 Application at Attachment A.
66 The Commission originally licensed Sirius to launch and operate two satellites in geostationary orbit at the 80 
and 110 West Longitude orbital locations.  1997 Sirius Authorization Order, 13 FCC Rcd at 7971, 7994.  Sirius 
later requested, and was granted, authority to change its satellite configuration from two geostationary satellites to 
three satellites in a highly elliptical non-geostationary orbit (NGSO). Sirius Satellite Radio Inc., Minor Modification 
of License to Construct, Launch and Operate a Non-Geostationary Satellite Digital Audio Radio Service System, 
Order and Authorization, 16 FCC Rcd 5419 (Intl Bur. 2001). 
67 See Sirius Satellite Radio Inc., Application for Authority to Launch and Operate SIRIUS FM-5, a Geostationary 
Satellite, to Provide Satellite Digital Audio Radio Services, IBFS File No. SAT-LOA-20060901-00096 (granted 
April 16, 2007).  The Commission had not yet granted this application at the time of filing of the Transfer 
Application, but Applicants specifically request that the Commission include authority to transfer control of any 
applications issued during the period between submission of the Transfer Application and Commission action on the 
same.  See Application at Part VI.B.  In addition, Sirius subsequently filed an informative Form 312 to include this 
authorization as part of the transfer of control application.  See n.1, supra.
68 See, e.g., Sirius Satellite Radio, Inc., Application for Special Temporary Authority to Operate Satellite Digital 
Audio Radio Service Complementary Terrestrial Repeaters, Order and Authorization, 16 FCC Rcd 16773 (Intl Bur. 
2001) (Sirius STA Order).  See also Sirius Satellite Radio Inc., Order, FCC 08-176 (adopted July 25, 2008) 
(Sirius Consent Decree Order), as discussed in Section VII.B., infra.  Sirius states that it plans to deploy a 
significant number of additional terrestrial repeaters in the future.  Sirius Form 10-K at 18.
Federal Communications Commission FCC 08-178
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GHz), and Ku- (12/14 GHz) bands.69 Sirius also holds a Commission wireless license.70
C. The Proposed Transaction
20. On February 19, 2007, Applicants, the only entities authorized by the Commission to 
provide satellite digital audio radio service in the United States, entered into an Agreement and Plan of 
Merger.71 The surviving corporation after all the transactional steps are completed will be Sirius Satellite 
Radio, Inc.  It will hold, through its subsidiaries Satellite CD Radio, Inc. and XM Satellite Radio 
Holdings Inc., all of the Commission licenses and authorizations Sirius and XM respectively hold prior to 
the merger.72 The merged corporation will be controlled by a new Board of Directors, selected by both 
Sirius and XM, and its equity ownership will be represented equally by former shareholders of Sirius and 
XM.73
21. Applicants propose that the merged company will offer a range of programming packages 
at lower prices than are currently available from the individual companies.74 In their Joint Opposition, 
Applicants state that some packages will be offered beginning within six months of the consummation of 
the merger, including best of both packages, discounted family friendly packages, and a best of 
both package that excludes adult-themed content.75 Beginning one year following the merger, 
Applicants state they will offer a la carte packages of 50 or 100 channels to those subscribers who 
purchase next-generation radios.76 Applicants state that no satellite radio subscriber will have to pay 
  
69 See Application at 54; see also Application to Transfer Control of Sirius Satellite Radio Inc. Earth Station 
Authorizations to Sirius Satellite Radio Inc., IBFS File No. SES-T/C-20070320-00379 (Call Signs E990291, 
E040363, E060276, E060277); File No. SES-T/C-20070625-00863 (Call Sign E060363).
70 See ULS File No. 0002948781 (filed Mar. 20, 2007) (seeking Commission consent to the transfer of control of an  
Industrial/Business Pool license, call sign WPTX369, from Sirius Satellite Radio Inc. to the merged entity); see also
Application at 54.
71 Agreement and Plan of Merger dated as of February 19, 2007, by and among Sirius Satellite Radio Inc., Vernon 
Merger Corporation, and XM Satellite Radio Holdings Inc. (Merger Agreement).  Application at 1, 6.  Pursuant to 
the Merger Agreement, a wholly owned subsidiary of Sirius, Vernon Merger Corporation, will be merged with and 
into XM, with Sirius being the surviving corporation of the subsidiary merger.  At the effective time of the merger, 
each outstanding share of XM common stock will generally be converted into the right to receive 4.6 shares of 
common stock of Sirius, and each outstanding share of XM Series A Convertible Preferred Stock will be similarly 
converted into the right to receive 4.6 shares of a newly designated series of preferred stock of Sirius having 
substantially the same qualifications as the stock so converted.  XM will continue to hold the stock of its 
subsidiaries, and XM and its subsidiaries will continue to hold all of the FCC authorizations that they held prior to 
the merger.  Id. at 6.  
72 Application at 6-7, Attachment A.  These licenses are held pursuant to Section 310(d) of the Communications 
Act.   
73 See Application at 6-7. Following the merger, the surviving companys Board of Directors will consist of the 
following: four members selected by Sirius and four members selected by XM, each of whom shall qualify as an 
independent director pursuant to NASDAQ Market Rules; the Chief Executive Officer; the Chairman of the Board 
of Directors; and two additional members, one of whom is expected to be designated by General Motors and the 
other by American Honda.  See Application at 7.  See Slacker, Inc. Comments at n.413, infra.  
74 See Applicants Joint Opposition to Petitions to Deny and Reply Comments (Joint Opposition).  
75 Id. at 10-14. See also XM and Sirius, XM and SIRIUS to Offer A La Carte Programming (press release) Jul. 23, 
2007. 
76 Joint Opposition at 11-14.
Federal Communications Commission FCC 08-178
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more for monthly services as a result of the merger.77
22. On June 13, 2008 and July 25, 2008, Applicants provided letters detailing and further 
modifying a number of voluntary commitments they were willing to implement to further demonstrate 
that the approval of their transaction would serve the public interest.78 With regard to programming, the 
Applicants state that within three months of consummation of the merger, the combined company will 
offer (1) two a la carte options and introduce a la carte capable radios, (2) a Best of Both programming 
package, (3) a mostly music package and a mostly news, sports and talk package, and (4) a 
discounted family-friendly package.  Applicants also state that the merged entity will set aside 4 percent 
of its full-time audio channels for noncommercial educational and informational programming, and will 
lease another 4 percent of its channels to qualified entities.79 With regard to rates, Applicants state that 
they will not raise their current rates nor the rates for their new services for at least 36 months after the 
consummation of the merger (except that after one year, Applicants may pass on cost increases to their 
subscribers).80 Six months prior to the expiration of the commitment period, the Commission will seek 
public comment on whether the cap continues to be necessary in the public interest.  The Commission 
will then determine whether it should be modified, removed, or extended.  With regard to equipment, 
within nine months after consummation of the merger, Applicants state that the merged entity will offer 
for sale at retail an interoperable satellite radio receiver (i.e., one that is capable of receiving both the full 
Sirius and the full XM programming).81 They state that the merged entity also will (1) permit any 
manufacturer to develop equipment that can deliver their satellite radio service and (2) permit 
manufacturers to incorporate in any satellite radio receivers other technology (so long as it does not result 
in harmful interference), including HD Radio technology.82 To this end, immediately after consummation 
of the merger, Applicants will offer for license to bona fide third parties the intellectual property they own 
and control of the basic functionality of satellite radios (not including chip set and encryption 
technology).  Applicants also voluntarily commit that the merged entity would not enter into any 
agreements that would bar others from including other (non-interfering) audio technology in any device 
or vehicle.83 Finally, Applicants voluntarily commit to providing Sirius satellite radio service to Puerto 
Rico using terrestrial repeaters.84
D. Post-Merger Operations
23. Applicants state that, post merger, they will continue to operate the XM and Sirius 
infrastructures as separate, legacy systems in the near term, and that neither system currently has 
  
77 Id. at 13-14.   
78 Applicants June 13, 2008 Ex Parte at 1; Applicants July 25, 2008 Ex Parte at 1.
79 Applicants define a qualified entity as any entity that is majority-owned by persons who are African American, 
not of Hispanic origin; Asian or Pacific Islanders; American Indians or Alaskan Natives; or Hispanics.  Applicants 
June 13, 2008 Ex Parte at 1 at 3 n.2.
80 Applicants state that they may pass through cost increases incurred since the filing of the combined companys 
FCC merger application as a result of statutorily or contractually required payments to the music, recording and 
publishing industries for the performance of musical works and sound recordings or for device recording fees.  
Applicants June 13, 2008 Ex Parte at 4.  See  107, infra.    
81 Applicants July 25, 2008 Ex Parte at 2.
82 Applicants June 13, 2008 Ex Parte at 3.
83 Id. 
84 Id. at 4.
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sufficient capacity to offer both companies full programming line-ups.85 Although Applicants state that 
some aspects of the two legacy infrastructures could be integrated into a common platform in a relatively 
short time frame, combining all aspects of the two infrastructures will take much longer.86 Consequently,
Applicants state that subscribers of the merged entity would have to own two legacy receivers (one XM 
receiver and one Sirius receiver) in order to receive the complete offerings of the combined entity.87 The 
need for two separate receivers results from the significant engineering differences between the XM and 
Sirius systems and the lack of an interoperable receiver capable of accessing all licensed SDARS 
systems.88 As discussed below, the need to operate two separate legacy systems post-merger delays 
realization of some of the spectrum efficiency benefits claimed by Applicants.89
24. Applicants identify significant engineering differences in their existing platforms that 
would make integration difficult in the short term.90 Both Applicants use satellites and terrestrial 
repeaters to deliver programming to subscribers, but each has taken a different approach in implementing 
its system.  For example, XM operates its system using two active satellites in geostationary orbit,91
whereas Sirius uses three satellites in a highly inclined, elliptical non-geostationary orbit.92 The 
difference in orbital constellations affects the design of the antennas used to receive the satellite signal,93
the terrestrial repeater network used to augment the satellite service,94 and the uplink antennas used to 
communicate with the satellites.95 Each Applicant has invested significantly in its existing infrastructure 
with the expectation of operating its infrastructure for years to come.96
  
85 Application at 12 n.27.
86 XM Nov. 16, 2007 Response to Information and Document Request, Narrative at 25 (XM filed a duplicate 
submission on Dec. 4, 2007 to correct a formatting issue with the Nov. 16, 2007 filing.  In this Order, we cite to the 
Nov. 16, 2007 filing).
87 Application at 12, n.27.
88 See infra Section VI.B.3; see also Sirius Nov. 16, 2007 Response to Information and Document Request, 
Narrative at 67 (it is anticipated that consumers who want to access all of the programming offered by the merged 
company will have to purchase new interoperable radios capable of receiving signals on the spectrum now licensed 
separately to Sirius and XM).
89 See infra Section V.B.4.
90 XM Nov. 16, 2007 Response to Information and Document Request, Narrative at 25-29; Sirius Nov. 16, 2007 
Response to Information and Document Request, Narrative at 37-40.
91 2005 XM Authorization Order, 20 FCC Rcd at 1620  1 (authorizing XM to launch and operate the XM-3 and 
XM-4 satellites and to operate the XM-1 and XM-2 satellites as in-orbit spares).
92 Sirius Nov. 16, 2007 Response to Information and Document Request, Narrative at 38.
93 Sirius states that the receive antennas of XMs and Sirius radios are optimized differently in order to provide the 
best reception given the different elevation angles needed to view XMs satellites in geostationary orbit and Siriuss 
satellites in highly-elliptical orbits.  See Sirius Nov. 16, 2007 Response to Information and Document Request, 
Narrative at 38-39.
94 Sirius states that it needs fewer repeaters than XM due to the high angle of elevation of Sirius satellites in highly-
elliptical orbit. See Sirius Nov. 16, 2007 Response to Information and Document Request, Narrative at 39.
95 Sirius states that its satellites in highly-elliptical orbits require uplink antennas with full motion to track the 
satellites across the sky, whereas XMs satellites in geostationary orbit do not. See id.
96 XMs two operational satellites, XM-3 and XM-4, were launched in 2005 and 2006, respectively, and have 
expected operational lifetimes of 15 years.  See XM, XM Radios XM-4 Satellite Successfully Delivered to Transfer 
Orbit (press release) Oct. 30, 2006; XM, XM Radios Satellite Successfully Delivered to Orbit (press release) Mar. 1, 
(continued.)
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25. Besides differences in satellite infrastructure, Applicants currently use different 
technology for transmission and reception of their programming to subscribers that makes integration to a 
common platform difficult in the short term.  XM and Sirius are assigned 12.5 MHz of spectrum each, but 
Sirius divides its spectrum into three identical carriers of approximately 4 MHz each, whereas XM 
divides its spectrum into six carriers.97 As a result, current XM receivers are not designed to receive 
Siriuss programming, and vice versa.  Furthermore, although XM and Sirius have used a common 
manufacturer for some of the chipsets used in their receivers, they also use a number of different chipset 
manufacturers, and the chipsets are highly tuned to address only the transmissions of Sirius or XM, 
respectively.98 Applicants state that any migration to a common platform will likely require the 
development of new chipsets.99 Applicants state that if the combined company were to migrate to a 
common platform while a significant number of single-platform devices were still in use, then the 
combined company would either risk losing millions of customers by forcing the purchase of new radios, 
or face prohibitive costs to replace millions of single-platform radios, most of which will be hard-wired 
into cars.100 Thus, Applicants indicate that it is unlikely that the merged company would convert to a 
common platform until nearly all subscribers have migrated to receivers with new chipsets capable of 
operating under a common platform.101
E. Applications and Review Process
1. Commission Review
26. On March 20, 2007, Applicants submitted the Consolidated Application to the 
Commission seeking consent to transfer control of Commission licenses and authorizations held by 
Sirius, XM and their subsidiaries pursuant to Section 310(d) of the Communications Act of 1934, as 
amended.102 On June 8, 2007, the Media Bureau accepted the Consolidated Application for filing and 
released a Public Notice establishing the pleading cycle for parties to file comments with respect to the 
transfer of control.103
27. On June 25, 2007, the Commission adopted the 2007 SDARS NPRM, seeking public 
comment as to whether language included in the 1997 SDARS Service Rules Order establishing SDARS 
(Continued from previous page)    
2005.  Sirius current operational satellites were launched in 2000, and Sirius is in the process of implementing 
replacement satellites.  See Satellite CD Radio, Inc., Application for Modification of Authority, IBFS File No. SAT-
MOD-20080521-00110 (filed May 21, 2008) (requesting authority to launch and operate the FM-6 satellite as an 
eventual replacement for two in-orbit Sirius NGSO satellites).  Because SDARS is the only commercial satellite 
service authorized to use the 2320-2345 MHz frequency band in the United States, it is unlikely that either Applicant 
would be able to sell its satellite infrastructure to a non-SDARS provider.
97 XM Nov. 16, 2007 Response to Information and Document Request, Narrative at 29; Sirius Nov. 16, 2007 
Response to Information and Document Request, Narrative at 37.
98 Sirius Nov. 16, 2007 Response to Information and Document Request, Narrative at 40.
99 Id. at 44-45.
100 XM Nov. 16, 2007 Response to Information and Document Request, Narrative at 26.  In addition, Applicants 
have committed to the public that no customer will need to purchase a new radio to keep substantially similar 
service after the merger.  Id. at 27 n.11.
101 See Sirius Nov. 16, 2007 Response to Information and Document Request, Narrative at 41, 44-45.
102 See 47 U.S.C.  310(d); Consolidated Application. 
103 Jun. 8, 2007 Public Notice, 22 FCC Rcd at 1032.  Comments were due July 9, 2007, and responses and 
oppositions were due on July 24, 2007.  
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service, which prohibits the transfer of control of one SDARS licensee to the other,104 constitutes a 
binding rule.105 In the event the Commission was to determine that the language in the 1997 SDARS 
Service Rules Order is a binding rule, the 2007 SDARS NPRM sought comment on whether the 
Commission should waive, modify, or repeal the transfer prohibition if the Commission subsequently 
determined that the proposed merger of XM and Sirius, on balance, serves the public interest.106
28. Many entities filed comments in support of the transfer of control application, including 
Competitive Enterprise Institute (CEI); The Heritage Foundation (Heritage); Progress and Freedom 
Foundation (PFF); National Association for the Advancement of Colored People (NAACP); Hispanic 
Federation; General Motors Corp. (GM); Circuit City; Sen. John Ensign; Rep. Rick Boucher; and
Former Sen. Bill Bradley.  In addition, nine parties filed petitions to deny the application: Mt. Wilson FM 
Broadcasters, Inc. (Mt. Wilson); the National Association of Broadcasters (NAB); Common Cause, 
Consumer Federation of America, Consumers Union and Free Press (Common Cause); American 
Women in Radio and Television, Inc. (AWRT); the Consumer Coalition for Competition in Satellite 
Radio (C3SR); The Telecommunications Advocacy Project (TAP); The National Association of 
Black Owned Broadcasters (NABOB); National Public Radio (NPR); and Forty-Six Broadcasting 
Organizations.107 An informal objection was filed by Prometheus Radio Project, U.S. Public Interest 
Research Group, and Media Access Project (Prometheus Radio).108 The Commission also received 
almost 17,000 formal and informal comments on the proposed transfer of control.  In addition, comments 
and reply comments were filed with regard to issues raised in the 2007 SDARS NPRM by 18 parties.  The 
Commission also requested additional information from Applicants.109 Applicants separately-filed 
  
104 Establishment of Rules and Policies for the Digital Audio Radio Satellite Service in the 2310-2360 MHz 
Frequency Band, Report and Order, Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, 
12 FCC Rcd 5754, 5823  170 (1997) (1997 SDARS Service Rules Order).
105 2007 SDARS NPRM, 22 FCC Rcd at 12018  1.
106 A summary of the 2007 SDARS NPRM was published in the Federal Register on July 12, 2007, 72 FR 38055 
(July 12, 2007).  The following day, the Media Bureau issued the Public Notice setting forth deadlines for filing 
comments and reply comments to the 2007 SDARS NPRM.   Public Notice, Media Bureau Announces Comment and 
Reply Comment Dates for the Notice of Proposed Rule Making Regarding Applications for Consent to the Transfer 
of Control of Licenses, XM Satellite Radio Holdings Inc., Transferor, to Sirius Satellite Ratio Inc., Transferee, 22 
FCC Rcd 13036 (Med. Bur. 2007).  Comments were due by August 13, 2007, and reply comments were due by 
August 27, 2007.
107 See Petition to Deny filed by Mt. Wilson FM Broadcasters, Inc. (Mt. Wilson Petition); Petition to Deny filed 
by the National Association of Broadcasters (NAB Petition); Petition to Deny filed by Common Cause, Consumer 
Federation of America, Consumers Union and Free Press (Common Cause Petition); Petition to Deny filed by 
American Women in Radio and Television, Inc. (AWRT Petition); Petition to Deny filed by the Consumer 
Coalition for Competition in Satellite Radio (C3SR Petition); Petition to Deny filed by  The Telecommunications 
Advocacy Project (TAP Petition); Petition to Deny filed by The National Association of Black Owned 
Broadcasters (NABOB Petition); Petition to Deny filed by National Public Radio (NPR Petition), and Petition 
to Deny filed by Forty-Six Broadcasting Organizations (46 Broadcasters Petition).  An untimely Petition to Deny 
was filed by the National Association of Telecommunications Officers and Advisors (NATOA).  The NATOA 
Petition will be considered as a comment in the proceeding.  
108 See Informal Objection filed by Prometheus Radio Project, U.S. Public Interest Research Group, and Media 
Access Project (Prometheus Radio Objection).  This filing will be considered as a comment in the proceeding.
109 On July 11, 2007, the Media Bureau adopted a Protective Order under which third parties were allowed to review 
confidential or proprietary filings and documents submitted by Applicants.  See Applications of Sirius Satellite 
Radio, Inc. and XM Satellite Radio Holdings Inc. For Approval to Transfer Control, Protective Order, 22 FCC Rcd 
12822 (Med. Bur. 2007) (First Protective Order).  On November 2, 2007, the Bureau issued a request for 
information from Sirius and XM.  Letter from Monica Shah Desai, Chief, Media Bureau, FCC, to Richard E. Wiley, 
(continued.)
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responses to those requests are included in the record.110
2. Department of Justice Review
29. In addition to Commission review, the proposed transaction is subject to review by 
federal antitrust authorities, in this instance by the U.S. Department of Justice (DOJ).  The DOJ reviews 
communications mergers and transactions pursuant to section 7 of the Clayton Act, which prohibits 
mergers that may substantially lessen competition in any line of commerce.111 On March 24, 2008, the 
DOJ announced that it had close[d] its investigation of the transaction without taking any enforcement 
action against the proposed merger.112
III. STANDARD OF REVIEW AND PUBLIC INTEREST FRAMEWORK
30. Pursuant to section 310(d) of the Communications Act, we must determine whether  
Applicants have demonstrated that the proposed transfers of control of the licenses and authorizations 
held by XM and Sirius will serve the public interest, convenience, and necessity.113 In making this 
assessment, we evaluate whether the proposed transaction complies with the specific provisions of the
(Continued from previous page)    
Robert L. Pettit, Peter D. Shields and Jennifer D. Hindin, Wiley Rein LLP, Counsel for Sirius (Nov. 2, 2007) 
(Sirius Information Request); Letter from Monica Shah Desai, Chief, Media Bureau, FCC, to Gary M. Epstein, 
James H. Barker and Brian W. Murray, Latham & Watkins LLP, Counsel for XM (Nov. 2, 2007) (XM Information 
Request).  On November 16, 2007, the Bureau issued a second Protective Order regarding additional conditions 
applicable to third party review of highly confidential competitively sensitive documents.  See Applications of Sirius 
Satellite Radio, Inc. and XM Satellite Radio Holdings Inc. For Approval to Transfer Control, Protective Order, 22 
FCC Rcd 19924 (Med. Bur. 2007) (Second Protective Order).
110 See Letter from Peter D. Shields, Wiley Rein LLP, Counsel for Sirius, to Marlene H. Dortch, Secretary, FCC 
(Nov. 16, 2007); Letter from Gary M. Epstein, Latham & Watkins LLP, Counsel for XM, to Marlene H. Dortch, 
Secretary, FCC (Nov. 16, 2007); Letter from Gary M. Epstein, Latham & Watkins LLP, Counsel for XM, to 
Marlene H. Dortch, Secretary, FCC (Mar. 3, 2008); Letter from Jennifer D. Hindin, Wiley Rein LLP, Counsel for 
Sirius, to Marlene H. Dortch, Secretary, FCC (Mar. 4, 2008); Letter from Gary M. Epstein, Latham & Watkins LLP, 
Counsel for XM, to Marlene H. Dortch, Secretary, FCC (Mar. 18, 2008); Letter from Jennifer D. Hindin, Wiley 
Rein LLP, Counsel for Sirius, to Marlene H. Dortch, Secretary, FCC (Mar. 18, 2008); Letter from Gary M. Epstein, 
Latham & Watkins LLP, Counsel for XM, to Marlene H. Dortch, Secretary, FCC (Apr. 10, 2008); Letter from 
Jennifer D. Hindin, Wiley Rein LLP, Counsel for Sirius, to Marlene H. Dortch, Secretary, FCC (Apr. 10, 2008).
C3SR asks that Applicants provide them in electronic form with documents submitted as Highly Confidential under 
the Second Protective Order. Letter from Julian L. Shepard, Williams Mullen, Counsel for C3SR, to Monica Shah 
Desai, Chief, Media Bureau, FCC (Dec. 4, 2007). However, those documents were marked Copying Prohibited 
and C3SR stated that it did not want to argue about whether the documents were correctly designated. Id. at 2.
Further, C3SR did not contend that it was unable to review the documents in paper form. Accordingly, we deny 
C3SRs request.
111 15 U.S.C.  18.
112 DOJ, Statement of the Department of Justice Antitrust Division on its Decision to Close its Investigation of XM 
Satellite Radio Holdings Inc.s Merger with Sirius Satellite Radio Inc. (press release) (March 24, 2008), 
http://www.justice.gov/opa/pr/2008/March/08_at_226.html (Mar. 24, 2008 DOJ Press Release).
113 47 U.S.C.  310(d).
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Act,114 other applicable statutes, and the Commissions rules.115 We also consider whether it could result 
in public interest harms by substantially frustrating or impairing the objectives or implementation of the 
Act or related statutes.116 We employ a balancing process, weighing any potential public interest harms 
of the proposed transaction against any potential public interest benefits.117 Applicants bear the burden of 
proving, by a preponderance of the evidence, that the proposed transaction, on balance, will serve the 
public interest.118 If we are unable to find that the proposed transaction serves the public interest, or if the 
record presents a substantial and material question of fact, we must designate the application for hearing 
under section 309(e) of the Act.119
31. The Commissions public interest evaluation necessarily encompasses the broad aims of 
the Communications Act,120 which include, among other things, a deeply rooted preference for 
  
114 Section 310(d) requires that the Commission consider the applications as if the proposed transferee were applying 
for the licenses directly.  47 U.S.C.  310(d).  See News Corp. and DIRECTV Group, Inc. and Liberty Media Corp. 
for Authority to Transfer Control, 23 FCC Rcd 3265, 3276  22 (2008) (Liberty Media-DIRECTV Order); SBC 
Comm. Inc. and AT&T Corp. Applications for Approval of Transfer of Control, 20 FCC Rcd 18290, 18300  16 
(2005) (SBC-AT&T Order); Verizon Comm., Inc. and MCI, Inc. Applications for Approval of Transfer of Control, 
20 FCC Rcd 18433, 18443  16 (2005) (Verizon-MCI Order); Applications of Nextel Comm., Inc. and Sprint 
Corp., for Consent to Transfer Control, 20 FCC Rcd 13967, 13976  20 (2005) (Sprint-Nextel Order); News 
Corp.-Hughes Order, 19 FCC Rcd at 483  15;  Applications for Consent to the Transfer of Control of Licenses from 
Comcast Corp. and AT&T Corp., Transferors, to AT&T Comcast Corp., Transferee, 17 FCC Rcd 23246, 23255  26 
(2002) (Comcast-AT&T Order).
115 See, e.g., Liberty Media-DIRECTV Order, 23 FCC Rcd at 3276  22; SBC-AT&T Order, 20 FCC Rcd at 18300  
16; Verizon-MCI Order, 20 FCC Rcd at 18442-43  16; Applications for Consent to the Assignment of Licenses 
Pursuant to Section 310(d) of the Communications Act from NextWave Personal Comm., Inc., Debtor-in-Possession, 
and NextWave Power Partners, Inc., Debtor-in-Possession, to Subsidiaries of Cingular Wireless LLC, 19 FCC Rcd 
2570, 2581  24 (2004) (Cingular-NextWave Order); EchoStar-DIRECTV HDO, 17 FCC Rcd at 20574  25.
116 See Liberty Media-DIRECTV Order, 23 FCC Rcd at 3276-77  22; SBC-AT&T Order, 20 FCC Rcd at 18300  
16; Verizon-MCI Order, 20 FCC Rcd at 18443  16; Sprint-Nextel Order, 20 FCC Rcd at 13976  20.
117 See Liberty Media-DIRECTV Order, 23 FCC Rcd at 3277  22; SBC-AT&T Order, 20 FCC Rcd at 18300  16; 
Verizon-MCI Order, 20 FCC Rcd at 18443  16; Sprint-Nextel Order, 20 FCC Rcd at 13976  20; News Corp.-
Hughes Order, 19 FCC Rcd at 483  15; Comcast-AT&T Order, 17 FCC Rcd at 23255  26.
118 See Liberty Media-DIRECTV Order, 23 FCC Rcd at 3277  22; SBC-AT&T Order, 20 FCC Rcd at 18300  16; 
Verizon-MCI Order, 20 FCC Rcd at 18443  16; Comcast-AT&T Order, 17 FCC Rcd at 23255  26; EchoStar-
DIRECTV HDO, 17 FCC Rcd at 20574  25.
119 47 U.S.C.  309(e); see also Liberty Media-DIRECTV Order, 23 FCC Rcd at 3277  22; News Corp.-Hughes 
Order, 19 FCC Rcd at 483 n.49; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20574  25.
120 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3277  23; AT&T Wireless Services, Inc. and Cingular Wireless 
Corp. for Consent to Transfer Control of Licenses and Authorizations, 19 FCC Rcd 21522, 21544  41 (2004) 
(Cingular-AT&T Wireless Order); News Corp.-Hughes Order, 19 FCC Rcd at 483  16; Comcast-AT&T Order, 
17 FCC Rcd at 23255  27; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20575  26; MediaOne Group, Inc., Consent 
to the Transfer of Control (Transferor) to AT&T Corp. (Transferee), 15 FCC Rcd 9816, 9821  11 (2000) (AT&T-
MediaOne Order); Applications of VoiceStream Wireless Corp. or Omnipoint Corp., Transferors, and VoiceStream 
Wireless Holding Company, Cook Inlet/VS GSM II PCS, LLC, or Cook Inlet/VS GSM III PCS, LLC, Transferees, 15 
FCC Rcd 3341, 3346-47  11 (2000); AT&T Corp., British Telecomm., PLC, VLT Co. L.L.C., Violet License Co. 
LLC, and TNV [Bahamas] Limited Applications, 14 FCC Rcd 19140, 19146  14 (1999) (AT&T Corp.-British 
Telecom. Order); Application of WorldCom, Inc., and MCI Comm. Corp. for Transfer of Control of MCI Comm. 
Corp. to WorldCom, Inc., 13 FCC Rcd 18025, 18030  9 (1998) (WorldCom-MCI Order).
Federal Communications Commission FCC 08-178
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preserving and enhancing competition in relevant markets,121 accelerating private sector deployment of 
advanced services,122 ensuring a diversity of information sources and services to the public,123 and 
generally managing the spectrum in the public interest.  This public interest analysis may also entail 
assessing whether a transaction will affect the quality of communications services or will result in the 
provision of new or additional services to consumers.124 In conducting this analysis, we may consider 
technological and market changes, and the nature, complexity, and speed of change of, as well as trends 
within, the communications industry.125
32. Our competitive analysis, which forms an important part of the public interest evaluation, 
is informed by, but not limited to, traditional antitrust principles.126 The Commission and the DOJ each 
have independent authority to examine the competitive impacts of proposed communications mergers 
involving transfers of FCC licenses, but the standards governing the Commissions competitive review 
differ somewhat from those applied by the DOJ.127 Like the DOJ, the Commission considers how a 
transaction will affect competition by defining a relevant market, looking at the market power of 
incumbent competitors, and analyzing barriers to entry, potential competition and the efficiencies, if any, 
that may result from the transaction.  The Antitrust Division of the DOJ, however, reviews 
telecommunications mergers pursuant to section 7 of the Clayton Act, which prohibits mergers that may 
substantially lessen competition.128 The Commissions competitive analysis under the public interest 
  
121 47 U.S.C.  521(6) (one purpose of statute is to promote competition in cable communications and minimize 
unnecessary regulation); 47 U.S.C.  532(a) (purpose of section is to promote competition in the delivery of 
diverse sources of video programming and to assure that the widest possible diversity of information sources are 
made available to the public from cable systems in a manner consistent with growth and development of cable 
systems); see also Liberty Media-DIRECTV Order, 23 FCC Rcd at 3277  23; Applications for Consent to the 
Transfer of Control of Licenses and Authorizations by Time Warner, Inc. and America Online, Inc. to AOL Time 
Warner Inc., 16 FCC Rcd 6547, 6555-56  22 (2001) (AOL-Time Warner Order).
122 See, e.g., Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56  706 (1996) (providing for the 
deployment of advanced telecommunications capabilities).
123 47 U.S.C.  521(4); see also 47 U.S.C.  532(a). 
124 See Liberty Media-DIRECTV Order, 23 FCC Rcd at 3277-78  23; Cingular-AT&T Wireless Order, 19 FCC Rcd 
at 21544  41; Comcast-AT&T Order, 17 FCC Rcd at 23255  27; AT&T-MediaOne Order, 15 FCC Rcd at 9821-22 
 11; WorldCom-MCI Order, 13 FCC Rcd at 18031  9.
125 See Liberty Media-DIRECTV Order, 23 FCC Rcd at 3278  23; Comcast-AT&T Order, 17 FCC Rcd at 23255-27; 
AT&T-MediaOne Order, 15 FCC Rcd at 9821-22  11; WorldCom-MCI Order, 13 FCC Rcd at 18031  9.
126 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3278  24; Cingular-AT&T Wireless Order, 19 FCC Rcd at 
21544  42; News Corp.-Hughes Order, 19 FCC Rcd at 484  17; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20575 
 27; Application of GTE Corp. and Bell Atlantic Corp. for Consent to Transfer Control of Domestic and 
International Authorizations and Application to Transfer Control of a Submarine Landing License, 15 FCC Rcd 
14032, 14046  23 (2000) (Bell Atlantic-GTE Order); Comcast-AT&T Order, 17 FCC Rcd at 23256  28; 
WorldCom-MCI Order, 13 FCC Rcd at 18033  13.
127 See, e.g., Liberty Media-DIRECTV Order, 23 FCC Rcd at 3278  24; Verizon-MCI Order, 20 FCC Rcd at 18444 
 18; SBC-AT&T Order, 20 FCC Rcd at 18302  18; Rainbow DBS Company LLC, Assignor, and EchoStar Satellite 
L.L.C., Assignee, Consolidated Application for Consent to Assignment of Space Station and Earth Station Licenses, 
and Related Special Temporary Authorization, 20 FCC Rcd 16868, 16874  12 (2005); Sprint-Nextel Order, 20 FCC 
Rcd at 13978  22; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20575  27.  See also Satellite Business Systems, 62 
FCC 2d 997, 1088 (1977), affd sub nom. United States v. FCC, 652 F.2d 72 (D.C. Cir. 1980) (en banc); Northern 
Utilities Service Co. v. FERC, 993 F.2d 937, 947-48 (1st Cir. 1993) (public interest standard does not require 
agencies to analyze proposed mergers under the same standards that the Department of Justice . . . must apply).
128 15 U.S.C.  18.
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standard is somewhat broader, for example, considering whether a transaction will enhance, rather than 
merely preserve, existing competition, and takes a more expansive view of potential and future 
competition and its impact on the relevant market. 129 The DOJs review is also limited solely to an 
examination of the competitive effects of the acquisition, without reference to diversity, localism, or other 
public interest considerations.
33. Our analysis recognizes that a proposed transaction may lead to both beneficial and 
harmful consequences.  For instance, combining assets may allow a firm to reduce transaction costs and 
offer new products, but it may also create market power, create or enhance barriers to entry by potential 
competitors, or create opportunities to disadvantage rivals in anticompetitive ways.130 The Commissions 
public interest authority enables us, where appropriate, to impose and enforce narrowly tailored, 
transaction-specific conditions that ensure that the public interest is served by the transaction.131 Section 
303(r) of the Communications Act authorizes the Commission to prescribe restrictions or conditions, not 
inconsistent with law, which may be necessary to carry out the provisions of the Act.132 Indeed, our 
public interest authority enables us to rely upon our extensive regulatory and enforcement experience to 
impose and enforce conditions to ensure that a transaction will yield overall public interest benefits.133
34. The Order is set forth, as follows, in four principal components.  First, we assess the 
potential horizontal and vertical harms presented by the transaction, including the impact on diversity.  
Second, we evaluate the public interest benefits that Applicants claim will result from the transaction.  
Next, we balance the public interest harms posed by, and the benefits to be gained from, the merger.  We 
conclude by examining whether the proposed transaction complies with the Communications Act, other 
applicable statutes and the Commissions rules and policies, as modified herein.
IV. POTENTIAL PUBLIC INTEREST HARMS
A. Introduction
35. In this section, we gauge the potential public interest harms that are likely to result from 
  
129 See Liberty Media-DIRECTV Order, 23 FCC Rcd at 3278  25; Bell Atlantic-GTE Order, 15 FCC Rcd at 14047  
23; AT&T Corp.-British Telecom. Order, 14 FCC Rcd at 19147-48  15; Comcast-AT&T Order, 17 FCC Rcd at 
23256  28.  
130 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3278-79  25; Cingular-AT&T Wireless Order, 19 FCC Rcd at 
21545  42; AOL-Time Warner Order, 16 FCC Rcd at 6550, 6553  5, 15.
131 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3279  26; Cingular-AT&T Wireless Order, 19 FCC Rcd at 
21545  43; Bell Atlantic-GTE Order, 15 FCC Rcd at 14047  24; AT&T Corp.-British Telecom. Order, 14 FCC 
Rcd at 19148  15; see also WorldCom-MCI Order, 13 FCC Rcd at 18032  10 (stating that the Commission may 
attach conditions to the transfers); Applications of VoiceStream Wireless Corp., Powertel Inc. and Deutsche Telekom 
AG for Consent to Transfer Control of Licenses and Authorizations, 16 FCC Rcd 9779, 9782 (2001) (conditioning 
approval on compliance with agreements with Department of Justice and Federal Bureau of Investigation addressing 
national security, law enforcement, and public safety concerns).
132 47 U.S.C.  303(r).  See Liberty Media-DIRECTV Order, 23 FCC Rcd at 3279  26; Cingular-AT&T Wireless 
Order, 19 FCC Rcd at 21545  43; Bell Atlantic-GTE Order, 15 FCC Rcd at 14047  24; WorldCom-MCI Order, 13 
FCC Rcd at 18032  10 (citing FCC v. Natl Citizens Comm. for Broadcasting, 436 U.S. 775 (1978) (upholding 
broadcast-newspaper cross-ownership rules adopted pursuant to section 303(r)); U.S. v. Southwestern Cable Co., 
392 U.S. 157, 178 (1968) (holding that section 303(r) permits the Commission to order a cable company not to carry 
broadcast signal beyond stations primary market); United Video, Inc. v. FCC, 890 F.2d 1173, 1182-83 (D.C. Cir. 
1989) (affirming syndicated exclusivity rules adopted pursuant to section 303(r) authority).
133 See, e.g., Liberty Media-DIRECTV Order, 23 FCC Rcd at 3279  26; Cingular-AT&T Wireless Order, 19 FCC 
Rcd at 21545  43; News Corp.-Hughes Order, 19 FCC Rcd at 477  5; Bell Atlantic-GTE Order, 15 FCC Rcd at 
14047-48  24; WorldCom-MCI Order, 13 FCC Rcd at 18034-35  14.
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this transaction.  We conclude that there is insufficient evidence in the record to predict the likelihood of 
anticompetitive harms.  Thus, we will evaluate the potential harms to competition, diversity, and localism 
under assumptions that maximize the likelihood of harm.  This approach is necessary to protect 
consumers from any potential adverse effects of the transaction while simultaneously allowing us to 
balance potential harms against potential public interest benefits.  As a result of our competitive analysis 
under worst-case assumptions, we conclude that the merger, absent Applicants voluntary commitments 
and other conditions, would result in potential harms.  However, Applicants have committed voluntarily 
to take steps that will mitigate these harms.
B. Potential Competitive Harms
36. Transactions involving the acquisition of a full or partial interest in another company may 
give rise to concerns regarding horizontal concentration and/or vertical integration, depending on the 
lines of business in which the two firms are engaged.  A transaction is said to be horizontal when the 
firms in the transaction sell or buy products that are in the same relevant product and geographic markets 
and are viewed as reasonable substitutes.134 Horizontal transactions can eliminate competition between 
the firms and increase concentration in the relevant markets.  The reduction in overall competition in the 
relevant markets may lead to substantial increases in prices paid by purchasers of products in the 
markets.135 Vertical transactions raise slightly different competitive concerns.  Vertical relationships exist 
when upstream firms produce inputs that downstream firms use to create finished goods.  Transactions are 
said to be vertical when upstream firms and downstream firms are combined.136  In this section, we 
analyze the potential horizontal and vertical effects of the proposed transaction.
1. Potential Horizontal Effects
a. Record Evidence on Defining the Relevant Markets
37. Consistent with the DOJ/FTC Guidelines, the Commission typically begins its analysis of 
horizontal effects by defining the relevant product and geographic markets.  The DOJ/FTC Guidelines 
define the relevant product market as the smallest group of competing products for which a hypothetical 
monopoly provider of the products would profitably impose at least a small but significant and non-
transitory increase in price, presuming no change in the terms of sale of other products.137 (This 
procedure is often called the SSNIP Test for market definition.138)  Thus, when one product is a 
  
134 See News Corp.-Hughes Order, 19 FCC Rcd at 507  69.
135 See ABA Sec. of Antitrust Law, Antitrust Law Developments 327 (5th ed. 2002); KIP VISCUSI, JOHN M. VERNON 
AND JOSEPH E. HARRINGTON, JR., ECON. OF REG. AND ANTITRUST 192 (3d ed. 2000) (VISCUSI, et al.).
136 See VISCUSI, et al. at 233.  A merging of the firms, however, is not required for a vertical relationship to exist.  
Exclusive dealing arrangements between upstream and downstream firms, referred to as vertical restraints, can 
accomplish the objectives of vertical integration.  Id.
137 See DOJ/FTC Horizontal Merger Guidelines, 57 Fed. Reg. 41552,  1.11, 1.12 (Sept. 10, 1992), revised, 4 
Trade Reg. Rep. (CCH)  13104 (Apr. 8, 1997).  The Guidelines similarly define the relevant geographic market as 
a region such that a hypothetical monopolist that was the only present or future producer of the relevant product at 
locations in that region would profitably impose at least a small but significant and nontransitory increase in price, 
holding constant the terms of sale for all products produced elsewhere.  Id. at  1.21.
138 One generally starts with a small relevant product market and asks if a hypothetical monopolist could profitably 
increase price in that market.  If the price increase is not profitable because consumers will substitute to another 
competing product (i.e., if the cross-price elasticity between the products is large), then the SSNIP test is repeated, 
but the potential product market is expanded to include the next-best substitutes.  The procedure continues until a 
hypothetical monopolist over all the included products can profitably raise price, identifying that set of products as 
the relevant product market.  DOJ/FTC Horizontal Merger Guidelines at  1.11.
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reasonable substitute for the other in the eyes of a sufficiently large number of consumers, it is included in 
the relevant product market even though the products themselves are not identical.
38. Product Market. The commenters in this proceeding disagree as to the exact boundaries 
of the relevant product market.  Applicants contend that the relevant product market is the relatively 
broad product market for audio entertainment services, which includes terrestrial radio, HD Radio, 
wireless phones, iPods and other MP3 players.139 They emphasize that substantial demand substitution 
exists particularly between satellite radio and terrestrial radio.140 Commenters opposing the transaction 
contend that SDARS constitutes a distinct relevant product market, separate from other audio 
entertainment services.141
39. In order to quantitatively determine the market, we must have certain statistical data, in 
particular the elasticity of demand for SDARS and other potentially competing products.142 No 
  
139 Joint Opposition at 36-37; Joint Opposition, Exh. A, CRA International, Economic Analysis of the Competitive 
Effects of the Sirius-XM Merger at 9-10 (Joint Opposition, CRA Study).
140 Joint Opposition at 37.  See also Americans for Tax Reform Comments at 4; Citizen Outreach Project Comments 
at 1 (arguing that SDARS competes with terrestrial radio); CEI Comments at 6-10 (arguing that the product market 
should include anything that delivers audio entertainment services); Crutchfield Corp. Comments at 1-2 (arguing 
that HD Radio and Internet radio are competitors to SDARS); Foust Comments at 3-4 (arguing that SDARS 
competes with broadcast radio, smart phones, PDAs, and iPods); Free State Foundation Comments at 2-6 (arguing 
that SDARS is part of a larger audio entertainment and information services market); Heritage Foundation 
Comments at 2-3 (arguing that SDARS competes in a dynamic market, including broadcast radio and MP3 devices, 
because all offer audio entertainment); Public Knowledge Comments at 3, 10 (arguing that the relevant product 
market includes terrestrial radio, HD Radio, Internet radio, MP3 players, mobile/cellular telephones, and emerging 
mobile Internet radio services); League of Rural Voters Comments at 2-5 (arguing that consumers have numerous 
choices, including broadcast radio, if XM and Sirius merged); Letter from Brent Wiles, Exec. Dir., League of United 
Latin American Citizens, to Marlene H. Dortch, Secretary, FCC (May 11, 2007) at 2 (arguing that the relevant 
product market includes terrestrial radio and downloadable music devices). 
141 See, e.g., C3SR Petition at 13-14; Decl. by J. Gregory Sidak Concerning the Competitive Consequences of the 
Proposed Merger of Sirius Satellite Radio, Inc. and XM Satellite Radio, Inc. (Mar. 16, 2007) at 25-32, transmitted 
by Letter from Julian L. Shepard, Williams Mullen, Counsel for C3SR (C3SR, Sidak Decl.); NAB Petition at 11-
23; NPR Petition at 9-15 (arguing that consumers have no other alternatives to SDARS for 100 plus channels of 
unregulated music, news, entertainment, and talk formats); Common Cause Petition at 36; AWRT Petition at 3-4 
(arguing that no other product is a true substitute for SDARS); NATOA Petition at 6-9 (arguing that other audio 
entertainment services are not comparable to the services offered by SDARS); AAI Comments at 22-24 (arguing 
that alternatives to SDARS have significant limitations in constraining an SDARS monopolist from exercising 
market power, and lack some or all of SDARS unique attributes); Blue Sky Comments at 6 (arguing that, when 
compared with SDARS, no other service offers comparable program diversity, portability, or sound quality); 
Entravision Comments at 8-15 (arguing that other audio services will not provide an adequate check against anti-
competitive harms arising from the merger); Prometheus Comments at 2 (arguing that HD Radio, MP3 players, 
terrestrial broadcast stations and Internet radio are complementary products, not substitutes for SDARS); Letter from 
U.S. Sen. Herb Kohl, Chairman, Subcommittee on Antitrust, Competition Policy, and Consumer Rights, to Kevin J. 
Martin, Chairman, FCC (May 23, 2007) at 1-2 (arguing that SDARS is the only medium offering hundreds of 
channels, programming on a national basis with superior sound quality, commercial free programming, and portable 
capabilities); Letter from U.S. Reps. James T. Walsh and John McHugh, to Kevin J. Martin, Chairman, FCC (May 
9, 2007) at 1 (arguing that SDARS is a separate product market because it is a national multichannel audio service 
that users can use anywhere whereas local radio stations provided limited signal reach). 
142 Elasticity is a measure of how much the sales of a product will rise or fall in response to a change in price.  The 
own-price elasticity of demand is the percentage change in the quantity demanded of good A divided by the 
percentage change in the price of good A.  The cross-price elasticity of demand is the percentage change in the 
quantity demanded of good A divided by the percentage change in the price of good B.
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commenter in this proceeding has provided detailed quantitative estimates of the own-price and cross-
price elasticities of demand for the services that might be included within the relevant product market.  
We note that in its announcement of its intent not to block the transaction, the Antitrust Division of the 
Department of Justice did not discuss any such evidence from its investigation, nor did the Antitrust 
Division define a relevant product market.143  Moreover, we are unable to perform our own analysis.  This 
is chiefly because there has been little or no variation in prices for the various services at issue.  Since 
SDARS services were launched in 2002, XM has changed its monthly recurring price only once, from 
$9.99 to $12.95 in April, 2005, and Sirius has not changed its corresponding price at all.144 Terrestrial 
(broadcast) radio has a zero (and thus unchanging) price.  Without price variation, it is not possible for us 
to develop our own estimates of the elasticities of demand required for a quantitative definition of the 
market.145
40. While there is other evidence and data in the record that shed some light on the relative 
substitutability of various audio entertainment services, as well as evidence concerning the product 
characteristics and prices of the various services that might be included in the relevant product market, 
this evidence is insufficient in this case for us to delineate the boundaries of the relevant product market 
with any precision or confidence.  Most significantly, it is insufficient for us to quantitatively estimate 
whether and by how much prices might rise or fall if we were to approve this transaction without a 
voluntary commitment by Applicants not to raise prices.
41. The only systematic empirical analysis of substitutability between SDARS and any of its 
potential substitutes was provided in a study conducted by Charles River Associates (CRA) on behalf 
of Applicants (the CRA Study).  Applicants commissioned BIA Research, Inc. to provide data on the 
number of AM/FM radio stations reaching each census block in the lower 48 U.S. states.  CRA used these 
data to estimate the average number of AM/FM stations received in each ZCTA (a Census Bureau area 
approximating a ZIP code).  The CRA study examined the relationship between the total subscriptions to 
satellite radio and the number of available terrestrial broadcast stations.  After controlling for a number of 
factors, such as income, gender mix, and the percentage of population commuting by car, the study finds 
a statistically significant inverse relationship between SDARS penetration and the number of terrestrial 
  
143 See Mar. 24, 2008 DOJ Press Release, n.112, supra.
144 In addition to the price of a monthly subscription, subscribers listening to XM or Sirius programming in their 
automobile must also obtain a receiver and have it installed.  XM and Sirius often subsidize the price of the receiver 
and the price of installation.  C3SR, Sidak Decl. at 55.
145 We find unpersuasive Sidaks estimated own-price elasticity of demand.  While Sidak estimates a critical own-
price elasticity of demand for SDARS of -1.52 using current operating margins of 65 percent and an assumption of 
constant own-price elasticity of demand. Sidak then explains why the actual own-price elasticity of demand is 
less than -1.52 (in absolute terms) using information from XMs price increase from $9.95 to $12.95, churn rates, 
conversion rates, and marquee content (specifically, indecent content). Sidak concludes that this is evidence that 
SDARS represents a distinct product market. C3SR, Sidak Decl. at 9-14. Hazlett asserts that there are several 
deficiencies in Sidaks approach and conclusions. Specifically, Hazlett argues that there is no measurement of the 
actual, purportedly low elasticity, and therefore nothing to specifically compare to the critical elasticity.  See
Thomas W. Hazlett, The Economics of the Satellite Radio Merger (June 14, 2007) at 29-32, transmitted by Letter, 
on behalf of Applicants, from Thomas Hazlett, Prof. of Law & Econ., George Mason Univ., to Marlene H. Dortch, 
Secretary, FCC (June 14, 2007) (Hazlett Study). CRA also disagrees with Sidaks estimates and conclusions 
regarding SDARS own-price elasticity. CRA argues that (1) Sidaks approach does not employ an objective and 
appropriate benchmark for XMs growth in the absence of the price increase from $9.95 to $12.95; (2) there were 
numerous other changes affecting demand that occurred around the same time as the price increase; (3) a finding 
that XMs demand is inelastic is inconsistent with standard profit-maximization conditions; and (4) Sidaks analysis 
was based only on the near-term impact on subscribers and profitability, not on the longer-term impact that is more 
relevant in growing market like this one. Joint Opposition, CRA Study at 44-45, n.170. 
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radio signals.  In other words, as the number of terrestrial radio stations increases, SDARS penetration 
decreases.  CRA uses this result to argue that SDARS and terrestrial radio are substitutes.146
42. We find that this study does not provide the evidence required to determine whether 
SDARS should be considered to be in the same product market as terrestrial radio.  This indirect means of 
measuring substitutability of SDARS and terrestrial radio (as opposed to directly measuring cross-price 
elasticities)147 leaves open the possibility that other unidentified (and possibly unobservable) factors could 
be the cause of this inverse relationship.  The problem of unobserved confounding factors (i.e., omitted 
variables) is a well-known problem in the econometrics literature.148 The most obvious potential factor is 
the density of the population of the area, since the number of radio stations will likely depend on the 
number of potential listeners.  Density may be related in some direct or indirect way to factors affecting 
SDARS subscribership, such as the length of the driving commute (as opposed to the number of people 
who drive to work, which was included in CRAs analysis), or the number of professional truckers, 
deliverymen and other people in the area who spend the day driving, or demographic variation by race or 
age.  In other words, we might expect that areas of the country where people spend less time in their 
vehicles have lower subscription rates to SDARS.  Thus the inverse relationship between SDARS 
penetration and terrestrial radio station availability might not be because they are substitutes, as CRA 
contends, but because of other factors that are affected by population density and size.149
43. In addition to these theoretical problems with CRAs analysis, there is survey data 
available from Arbitron that indicates SDARS listeners are also heavy listeners of AM/FM radio.  This 
suggests that AM/FM radio might be a complement rather than a substitute to SDARS.150 Also, an 
analysis performed by C3SR finds that the results of the CRA study are not robust (the results do not 
hold) when the data are analyzed by Arbitron market instead of by ZCTA, with the analysis limited to just 
subscribers in Arbitron markets.  Indeed, in this analysis a positive relationship was found between 
terrestrial radio station availability and SDARS penetration.151 Finally, and perhaps most importantly, 
  
146 Joint Opposition, CRA Study at 14-16; also see Timothy H. Savage, Martino De Stefano, and Steven R. Brenner, 
CRA, Further Analysis of Econometric Evidence that Satellite and Terrestrial Radio are Demand Substitutes, 
transmitted by Letter from Jennifer D. Hindin, Wiley Rein LLP, on behalf of Applicants, to Marlene H. Dortch, 
Secretary, FCC (Jan. 11, 2008) (Applicants, CRA Further Analysis).
147 Sidak points out that this analysis is not measuring the cross-price elasticity of demand for SDARS with respect 
to terrestrial radio, but is instead attempting to observe the elasticity of demand for SDARS with respect to changes 
in the number of terrestrial radio stations.  Third Supplemental Decl. of J. Gregory Sidak, transmitted by Letter from 
Julian L. Shepard, Williams Mullen, Counsel for C3SR, to Marlene H. Dortch, Secretary, FCC (Oct. 1, 2007) at 21 
(C3SR, Sidak Third Supp. Decl.).
148 See, e,g., JEFFREY WOOLDRIDGE, INTRO. ECONOMETRICS: A MODERN APPROACH 95-99 (3d ed. 2005).  PETER 
KENNEDY, A GUIDE TO ECONOMETRICS 3, 78-80, 88 (4th ed. 1998); WILLIAM H. GREENE, ECONOMETRIC ANALYSIS
401-04 (3d ed. 1997); and JACK JOHNSON AND JOHN DINARDO, ECONOMETRIC METHODS 110 (4th ed. 1997).  
149 C3SR, Sidak Third Supp. Decl. at 22; Letter from Julian L. Shepard, Williams Mullen, Counsel for C3SR, to 
Marlene H. Dortch, Secretary, FCC, Att. Preliminary Review of CRA Regression Analysis, J. Gregory Sidak, 
Georgetown Univ. Law Center, and Hal J. Singer and Allan Ingraham, Criterion Eon. (Dec. 7, 2007) (C3SR, 
Review of CRA Analysis).
150 Arbitron, Satellite Radio Channels Account For 3.4 Percent of All Radio Listening In Fall 2006 Arbitron 
Survey (press release), Feb. 27, 2007 (stating that satellite listeners spent an average of 33 hours a week with radio 
compared with the typical listener who listened approximately 19 hours a week to radio.  Also, people who listened 
to satellite spent more time with AM/FM radio (14 hours) than they did with satellite radio (10 hours 45 minutes) or 
Internet (8 hours 15 minutes)); see also C3SR, Review of CRA Analysis at 13.
151 C3SR, Review of CRA Analysis.  C3SR asked that we seek the data underlying CRAs study. Letter from Julian 
L. Shepard, Williams Mullen, Counsel for C3SR, to Marcia Glauberman, Deputy Chief, Industry Analysis Division, 
(continued.)
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even if we accept that the CRA studys results indicate that there is some substitutability between SDARS 
and terrestrial radio,152 they do not demonstrate that SDARS and terrestrial radio are sufficiently close 
substitutes to be included in the same relevant product market.  Just showing that there is some 
substitution is not enough for antitrust analysis  it is necessary to show that the degree of substitutability 
is high enough that a small but significant nontransitory price increase for SDARS service alone will 
cause sufficient numbers of consumers to drop SDARS service to make the price increase unprofitable.  
CRAs analysis provides us with insufficient evidence to make this determination.
44. Turning to the submissions of commenters opposing the transaction, we find that the 
evidence from other surveys C3SR provided or referenced, specifically the NRG Research Group survey 
and the Wilson Research Strategies survey, provide insufficient evidence that SDARS constitutes a 
distinct relevant product market.  Between January 24 and January 30, 2008, NRG Research Group 
identified and interviewed 407 individuals who subscribe to satellite radio.  The NRG survey provides 
evidence that if one competitor increases advertising content on its channels, large numbers of subscribers 
would choose the other service.  The NRG survey supports the hypothesis that one reason for subscribing 
to satellite radio is to avoid commercials.153 The survey, however, has several problems that make it 
difficult to use its results for the purpose of market definition.  First, NRG report consumers stated 
intentions and not their actual choices.  Consumer behavior often differs from stated intentions.  Second, 
the survey reports on consumer sensitivity to changes in advertising, but not on their sensitivity to 
changes in pricing.  Consumers may differ in their sensitivity to each, with important implications for the 
analysis.
45. The Wilson survey, discussed by Sidak and NAB, is flawed and therefore cannot be 
relied upon for purposes of this transaction.  In June 2007, Wilson Research Strategies conducted a survey 
of current satellite radio subscribers at the request of the NAB.  According to the publicly available 
executive summary, the survey polled 501 current SDARS subscribers on a range of questions to 
determine their reasons for subscribing and their demographic characteristics. The survey results suggest 
that a significant number of satellite radio subscribers:  (1) are less likely to have a sufficient amount of 
terrestrial radio service by virtue of their geographic location, (2) value certain attributes of satellite radio 
that are not available on terrestrial radio, (3) do not perceive MP3 players to be substitutes for satellite 
radio, and (4) are sensitive to the price, and would not pay more to receive the programming offered by 
both XM and Sirius.154 We find the survey flawed for several reasons.  First, again, this survey relies on 
(Continued from previous page)    
Media Bureau, FCC (Sept. 11, 2007). Because we reject the results of CRAs study based on the information 
submitted by Applicants, we find that access to the underlying data is unnecessary. 
152 This result is consistent with the 1997 SDARS Service Rules Order, where the Commission predicted that while 
not, of course, perfect substitutes, the SDARS providers would face competition from terrestrial radio services, 
CD players in automobiles and homes, and audio services delivered as part of cable and satellite services.  1997 
SDARS Service Rules Order, 13 FCC Rcd at 5786  77-78; see also 2006 Quadrennial Regulatory Review - Review 
of the Commissions Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the 
Telecommunications Act of 1996, Report and Order and Order on Reconsideration, 23 FCC Rcd 2010, 2071-72  
114 (2008) (finding a lack of evidence to conclude that terrestrial radio is in the same product market as SDARS).
153 Letter from Benjamin D. Arden, Williams Mullen, Counsel for C3SR, to Marlene H. Dortch, Secretary, FCC 
(Apr. 3, 2008), Att. NRG Research Group, Survey of Satellite Radio Users (Feb. 8, 2008) (NRG Survey); Letter 
from Julian L. Shepard, Williams Mullen, Counsel for C3SR, to Marlene H. Dortch, Secretary, FCC (Apr. 3, 2008), 
Att. Analysis of the Proposed XM-Sirius Merger, J. Gregory Sidak, and Hal J. Singer, Criterion Economics at 9-10 
(C3SR, Sidak, Singer Analysis).
154 Wilson Research Strategies, Exec. Summary, Survey of Satellite Radio Subscribers at http://www.w-r-
s.com/press/WRS_NAB%20Sat%20Radio%20Survey_PressRelease_070710.pdf (visited June 25, 2008); C3SR 
Petition, Exh. B, Supplemental Decl. of J. Gregory Sidak at 18-19 (C3SR Petition, Sidak Supp. Decl).
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consumers stated intentions and not their actual choices.  Second, this survey provides mixed evidence 
concerning the definition of the market and the likely impact of the merger, suggesting that many 
subscribers value SDARS service and its unique characteristics over alternative sources of audio 
entertainment, but are sensitive to the price and would not be willing to pay a higher price for combined 
programming from Applicants.  In any event, the details of the survey were never made public or put into 
our record.  Rather, just an executive summary was made available, such that, for example, we were 
unable to examine the methodology, the questions asked, or the underlying data, and therefore were 
unable to determine the surveys reliability.155 We are thus unable to rely on any of this surveys results.
46. Geographic Market.  Although Applicants do not explicitly address the relevant 
geographic market, their market share calculations suggest that they are assuming a national geographic 
market.156 Opponents apparently disagree on the appropriate relevant geographic market:  some appear to 
argue for a national market,157 while others appear to advocate a more localized relevant geographic 
market.158 However, without knowing the contours of the relevant product market, it is impossible to 
define precisely the relevant geographic market.  For example, if the relevant product market were limited 
to SDARS, we could define the relevant geographic market as a national market.  In contrast, if the 
relevant product market were to include terrestrial radio, we would need to adopt a more localized 
relevant geographic market to reflect the fact that terrestrial radio stations have a limited reach.
47. We find that the record evidence is insufficient to define precisely the relevant product or 
geographic markets. Without defining the relevant product and geographic markets, we cannot perform a 
structural analysis to predict the likelihood of anticompetitive harms.  Thus, as explained below, we must 
make certain assumptions about the relevant product and geographic markets in order to perform our 
competitive analysis.
b. Competitive Analysis Under Worst-Case Assumptions
48. As stated in Section III above, Applicants bear the burden of proving that the proposed 
transaction, on balance, serves the public interest.  If we are unable to find that the proposed transaction 
serves the public interest, or if the record presents a substantial and material question of fact, we would 
designate the application for hearing under section 309(e) of the Act.159 However, not every question of 
fact is material.  Specifically, even if we are unable to precisely determine the extent of the alleged harms, 
if we are able to determine that the conditions we are imposing would ameliorate any anticompetitive 
harm and that the transaction, as conditioned, would serve the public interest, then we may grant the 
application.160 Because Applicants bear the burden of proof, we will evaluate potential horizontal 
competitive harms under assumptions that maximize the likelihood of harm.  We note that the 
  
155 In particular, the phrasing of the questions, the order of the questions, and the specific distribution of responses 
are not available.
156 C3SR, CRA Study at tbls. C1-C6.
157 See, e.g., AAI Comments at 29; C3SR, Sidak Decl. at 28; C3SR Petition, Sidak Supp. Decl. at 34; Letter from 
Philip M Napoli, Dir., Donald McGannon Communication Research Center, to Marlene H. Dortch, Secretary, FCC, 
Att. Market Definition in Satellite Radio: Why the Sirius/XM Merger Would Result in Anti-Competitive Conditions 
at 3-7 (June 29, 2007) (McGannon June 29, 2007 Ex Parte); NAB Petition at 11-16; NPR Petition at 15-16; 
Common Cause Petition at 14.
158 See, e.g., C3SR Reply at 7-11 (arguing that the geographic market is not national due to the differences in the 
availability of substitutes); John Smith Comments at 3-4.
159 47 U.S.C.  309(e); see also Liberty Media-DIRECTV Order, 23 FCC Rcd at 3276-77  22; News Corp.-Hughes 
Order, 19 FCC Rcd at 483 n.49; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20574  25.       
160 See, e.g., Comcast-AT&T Order, 17 FCC Rcd 23256-57, 23270  30, 66.
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assumptions we adopt below provide a worst-case scenario for Applicants, but we find this approach is 
necessary in order to protect consumers from any potential adverse effects of the transaction while 
simultaneously allowing us to balance the potential harms against the potential public interest benefits of 
the transaction.  After conducting the analysis under the worst-case assumptions, we find that with 
Applicants voluntary commitments and other conditions, the transaction will be in the public interest.
49. Consistent with the foregoing principles, we will assume that SDARS constitutes a 
separate relevant product market.  Furthermore, because Applicants are the only current participants in 
this relevant product market and because both provide nationwide service, we assume that the relevant 
geographic market is national.  These assumptions will tend to overestimate any anticompetitive effects.  
Again, we believe it necessary to employ such worst-case assumptions to ensure that, when we balance 
the potential costs and benefits of the proposed transaction, we do not inadvertently approve a merger that 
is not in the public interest.
50. Given these assumptions about the relevant product and geographic markets, it is clear 
that Applicants are the only current providers of SDARS service.  We find that entry by a new SDARS 
provider is unlikely to be sufficiently timely to defeat any attempted price increase.161 First, we are 
unaware of any appropriate, unencumbered spectrum that is likely to become available in the near future 
that would allow another company to provide SDARS service.  Second, even if such spectrum were 
available immediately, we believe that it would take years for the new entrant to build the necessary 
infrastructure and to develop the necessary programming and marketing resources to become a viable 
competitor.162 Furthermore, we find no uncommitted entrants that should be counted as market 
  
161 See, e.g., DOJ/FTC Horizontal Merger Guidelines  3.0 (A merger is not likely to create or enhance market 
power or to facilitate its exercise, if entry into the market is so easy that market participants, after the merger, either 
collectively or unilaterally could not profitably maintain a price increase above premerger levels. . . . Entry is that 
easy if entry would be timely, likely, and sufficient in its magnitude, character and scope to deter or counteract 
the competitive effects of concern.).
162 The DOJ/FTC Horizontal Merger Guidelines require that, for such potential entry to be considered, it must be 
timely, and likely, and sufficient in its magnitude, character and scope to deter or counteract the competitive 
effects of the proposed transaction.  With respect to timeliness, DOJ will generally consider only entry that can be 
achieved within two years from initial planning to significant market impact.  Id. at  3.0.  According to NAB, 
[t]his is extremely unlikely in the case of satellite DARS, as evidenced by the fact that it reportedly took XM and 
Sirius nearly four years from the grant of spectrum by the FCC to commercial availability, including the technically 
difficult step of launching broadcast satellites.  Analysis of Antitrust Concerns Regarding the XM/Sirius Merger, 
Crowell Moring at 8-9, transmitted by Letter from Lawrence A. Walke, NAB, to Marlene H. Dortch, Secretary, FCC 
(May 22, 2007) (NAB, Antitrust Analysis Memo).  NAB adds that other entry barriers are extremely high, 
including capital costs, programming acquisition costs, and subscriber acquisition costs.  Id. at 9.  For example, 
NAB states, a new satellite could cost more than $300 million.  Id.  Therefore, NAB concludes, even if the 
Commission were to allocate additional spectrum to permit entry by a new SDARS provider, the threat of such entry 
is not likely to constrain short-term price increases by the merged firm and would not be sufficient to ameliorate the 
certain anticompetitive effects of the proposed transaction.  Id.
The Sidak Declaration also argues the experience of the existing SDARS suppliers implies that new entry would 
not impose any price discipline within the next two years.  Applicants were founded in the early 1990s, but did not 
offer SDARS until September 2001. Both XM and Sirius had to overcome significant fixed costs of establishing a 
nationwide radio network, including the acquisition of spectrum and programming. C3SR, Sidak Decl. at 35-36.  
Sidak notes that Applicants have each invested roughly $5 billion to date and that such an entry cost for another 
SDARS provider makes it extremely unlikely that any firm will enter de novo in SDARS and have a constraining 
effect on price over the next two years.  C3SR Petition, Sidak Supp. Decl. at 30-31.
In contrast, CRA argues that de novo entry could occur through the use of Mobile Satellite Service frequency bands 
in 2008 or 2009 or through the use of Wireless Communication Service spectrum in more than two years.  Joint 
Opposition, CRA Study at 61.
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participants.163
51. Under these worst-case assumptions, therefore, the proposed merger is a merger to 
monopoly.  The post-merger Herfindahl Hirschman Index (HHI) 164 is 10,000, and the change in the 
HHI is 4,992.165 These estimates exceed the threshold specified in the DOJ/FTC Guidelines above which 
mergers are presumed . . . to create or enhance market power or facilitate its exercise.166 It is widely 
accepted that, absent offsetting economies, a monopolist will charge a higher price than firms in a 
competitive market, including a duopoly.167 Thus, we would expect that, other things being equal, the 
merged firm would charge prices that are higher than those charged by Applicants pre-merger.
52. Unfortunately, we lack sufficient data to estimate the size of the likely price increase, if 
any.  While it is true that economists, in recent years, have developed econometric techniques to simulate 
likely unilateral effects arising from horizontal mergers,168 these merger simulation models require data or 
assumptions about demand, marginal cost, and firm behavior to estimate the likely unilateral effects of 
horizontal mergers.  Because we lack sufficient data concerning demand elasticities, among other things, 
we cannot employ such a merger simulation to quantify the likely price increase.  Nevertheless, given that 
we are assuming a merger to monopoly, it is reasonable to predict that, absent exceptional countervailing 
efficiencies,169 prices are likely to be higher after the merger than before.
53. Applicants argue that, due to the dynamic nature of demand for satellite radio services, 
the merged entity would actually have an incentive to lower, not raise, prices.170 In particular, CRA 
asserts that SDARS is subject to dynamic demand effects.171 According to CRA, firms like XM and 
Sirius must take into account the impact of price changes on not only their current subscribers, but also on 
prospective new subscribers.  Such dynamic considerations lead to penetration pricing, which involves 
  
163 An uncommitted entrant is a firm that is likely to enter the market within one year and without the 
expenditure of significant sunk costs of entry and exit, in response to a small but significant and nontransitory 
price increase. See DOJ/FTC Horizontal Merger Guidelines at  1.32.
164 The HHI is calculated as the sum of the squares of the market shares of each firm participating in a relevant 
market.  The HHI can range from nearly zero in the case of an atomistic market to 10,000 in the case of a pure 
monopoly.  Because the HHI is based on the squares of the market shares of the participants, it gives proportionately 
greater weight to carriers with larger market shares.  Changes in market concentration are measured by the change in 
the HHI.  See id.  1.5.
165 The predicted change in HHI is based on 2007 year end SDARS market shares of 52 percent for XM and 48 
percent for Sirius.  XM, XM Satellite Radio Holdings Inc. Announces Fourth Quarter and Full Year 2007 Results 
(press release), Feb. 28, 2008; Sirius, Sirius Reports Fourth Quarter and Full Year 2007 Results (press release), Feb. 
26, 2008.
166 Section 1.51 of the DOJ/FTC Horizontal Merger Guidelines specifies that mergers that produce a post-merger 
HHI above 1800 and an increase in the HHI of greater than 100 points will be presumed to have an anticompetitive 
effect.
167 DENNIS W. CARLTON AND JEFFREY M. PERLOFF, MOD. INDUS. ORG. 56-120, 153-235 (3d. ed. 2000) (Carlton 
& Perloff).
168 See, e.g., Gregory J. Werden, Simulating the Effects of Differentiated Products Mergers: A Practical Alternative 
to Structural Merger Policy, 5 GEO. MASON L. REV. 363 (1997); Roy J. Epstein & Daniel L. Rubinfeld, Merger 
Simulation:  A Simplified Approach with New Applications, 69 ANTITRUST. L. J. 883 (2002).
169 See Section V, infra.
170 Joint Opposition at 31-32.
171 Joint Opposition, CRA Study at 61-63, App. A.  
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setting prices below the price that would maximize short-run profits in order to maximize subscriber 
growth and long-run profits.  Applicants further argue that there are dynamic demand spillovers, i.e., 
that the incentive of one SDARS provider to lower prices is diminished in the current market because 
some of the benefits of early adopters (e.g., word-of-mouth, product demonstrations, etc.) accrue to its 
competitor.  The merger, according to CRA, could actually lower prices by internalizing these spillover 
effects and strengthening the incentive to price low, in order to grow the market.
54. While we acknowledge the theoretical possibility of such a dynamic demand spillover 
externality, we note that Applicants have not attempted to quantify the effect of internalizing this 
externality.  They have also failed to show convincingly the location of SDARS on the product adoption 
curve or the likely ultimate penetration rate for SDARS.  Finally, they have not demonstrated that this 
internalization effect will outweigh the incentive of the merged firm to raise price once their main 
competitor is eliminated.
55. Furthermore, assuming, arguendo, that there are important dynamic demand spillovers 
and that immediately upon consummation of the merger the merged entity would have an overall 
incentive to lower price, the concern remains that the merged firm will have the incentive and ability to 
raise price at a later point in the product life cycle.  In particular, when selling a product with dynamic 
demand effects, firms have an incentive early in the products life-cycle to expand sales and enhance 
long-run profitability by pricing below the short-run profit maximizing price; but the incentive to engage 
in penetration pricing diminishes as the product matures, and prices can be expected eventually to rise to 
the short-run profit maximizing level.172 Under our assumption of a separate SDARS product market and 
significant entry barriers, the merged firm would appear to have the incentive and ability to raise prices to 
the monopoly level later in the product cycle.173
56. Under the assumption that SDARS is the relevant product market, we therefore conclude 
that the merged firm may have an increased incentive and ability to raise the price of SDARS over a non-
transitory period of time.  As described in further detail in Section VI below, however, we find that the 
voluntary commitments and other conditions will adequately address this competitive concern.  In 
particular, the price cap condition ameliorates possible harm to consumers, and the new programming 
packages offer consumers more pricing choices.174 We therefore conclude, even assuming the worst-case 
scenario, that grant of the application is in the public interest.
57. Some commenters argue that the current transaction is similar to the proposed transaction 
in EchoStar-DIRECTV, and thus we must, as we did there, designate the application for hearing.175 As we 
have stated, if we are unable to find that a proposed transaction serves the public interest or if the record 
presents a substantial and material question of fact, we must designate the application for hearing.176 In 
EchoStar-DIRECTV, there was significant evidence in the record to demonstrate that the applicants 
  
172 Id.  
173 CRA asserts that when SDARS is mature, the market will be subject to intense competition from audio content 
over mobile broadband access technologies, more robust and widespread cellular networks, and other technological 
advances that will prevent the merged firm from exercising market power.  Id. at 27-30, 63.  In response, Sidak 
contends that claims about future constraints on the market power of XM and Sirius are speculative and call for an 
unusually long time horizon for assessing market power.  C3SR Response, Exh. A, Second Supp. Decl. of J. 
Gregory Sidak at 19-22 (July 24, 2007) (C3SR,  Sidak Second Supp. Decl.).
174 See Sections VI.B.1 and VI.B.2., infra.
175 See, e.g., C3SR Petition at 25-28; NAB Petition at 3, 6; NABOB Petition at 5-6; Clear Channel Comments at 4-6; 
Entravision Comments at 6-8.
176 See 47 U.S.C.  309(e).
Federal Communications Commission FCC 08-178
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competed against one another and that, without such competition, prices were likely to increase, 
especially in markets that did not have access to cable.  The Commission was unable to conclude, 
therefore, that the EchoStar-DIRECTV transaction served the public interest, and the transaction was 
designated for hearing.
58. Although there may be surface similarities between the two transactions, there are 
significant differences.  As we have explained above,177 because there has been little or no price variation 
it is not possible to use the normal tools of econometrics to define the relevant market or determine likely 
impacts on price, and conducting a hearing would not change this basic fact.  In addition, as discussed 
below, Applicants have offered voluntary commitments to ensure that the transaction serves the public 
interest.  For example, Applicants voluntarily commit to not raising their rates for three years after the 
consummation of their merger.178 They voluntarily commit to allowing any manufacturer to develop 
SDARS receivers and to permit manufacturers to incorporate in satellite radio receivers any other 
technologies that would not result in harmful interference, including HD Radio technology, iPod ports, or 
Internet connectivity.179 Applicants also voluntarily commit to setting aside some of their channels for 
noncommercial educational and informational programming and for lease to certain qualified 
entities.180 And, they voluntarily commit to offer a la carte and other programming packages, thereby 
increasing consumer choice and allowing parents, for example, to better control the types of programs to 
which their children are exposed.  Applicants in EchoStar/DIRECTV made no such commitments to 
mitigate potential harms or to create benefits that would outweigh the potential harms.  Thus, unlike in 
EchoStar/DIRECTV, in this transaction there is no need for a hearing.  On the basis of the record before 
us, we are able to conclude that Applicants significant voluntary commitments and the other conditions 
we are imposing to our approval of the transaction are sufficient to ameliorate any public interest harms 
that otherwise might have resulted from the transaction and that the transaction will, as a result, create 
consumer benefits and advance other aspects of the public interest.  Moreover, to ensure that no longer-
term harms will result from the transaction, six months prior to the expiration of the commitment period, 
the Commission will seek public comment on whether the price cap continues to be necessary in the 
public interest.  The Commission will then determine whether it should be modified, removed, or 
extended.
2. Potential Vertical Effects
59. Some commenters express concern about the vertical effects the merger may have in the 
market for SDARS and SDARS-related equipment.  Two commenters raise the possibility of monopsony 
power in the content market, and seek conditions to mitigate such harms.  In addition, U.S. Electronics, 
Inc. (USE) alleges that because there will be only one SDARS provider, the merged company will 
effectively have a monopoly in the market for SDARS receivers.  Garmin expresses concern that its 
equipment for weather information in the aviation market will become obsolete if the merged company 
chooses to use the Sirius system rather than the XM/Garmin system.  We address these issues in turn.
60. Monopsony Power.  Two commenters, McGannon and King, raise the concern that the 
transaction creates the potential for monopsony power.  Both argue that the upstream market for national 
satellite radio content is a separate market, and thus the merger will produce a single purchaser for content 
  
177 See Section IV.B.1.a., supra.
178 Applicants June 13, 2008 Ex Parte at 4.
179 Id. at 3-4.
180 Id. at 3.  According to Applicants, a qualified entity includes any entity that is majority-owned by persons who 
are African American, not of Hispanic origin; Asian or Pacific Islanders; American Indians or Alaskan Natives; or 
Hispanics.  Id. at n.2.
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in this market.181 With respect to monopsony power in the market for programming, the economic 
literature does not identify a single point at which monopsony power becomes likely.182 A necessary 
condition is that an entity or entities must possess sufficient size in the relevant market to dictate pricing.  
In general, large purchasing power delivers both benefits and potential costs to consumers.  The benefits 
come from the fact that a large purchaser that receives programming discounts will pass on some of these 
reduced costs to subscribers (for example, in the form of lower prices).  The potential harm to consumers 
comes from the fact that these discounts may discourage or preclude competitive entry,183 and thereby 
result in higher prices or reduced service quality, or that the monopsony purchaser may negotiate such 
terms from content providers that the quality of programming is lowered.184
61. Neither commenter presents quantitative evidence that the upstream market for content in 
which Applicants purchase content is a separate market.  Indeed, King refers to the fact that Sirius was 
able to steal Howard Stern away from terrestrial radio.185 It would seem straightforward that, at least in 
that case, terrestrial radio and SDARS were bidding against each other for content.  Additionally, neither 
commenter identifies specific harms that will result.  Indeed, the merged firms ability to negotiate better 
terms for expensive talent could benefit consumers via lower rates, and it would not be in the combined 
companys interests to negotiate deals that harm the quality of content, especially while seeking to 
increase subscriber penetration and so move to profitability.  We thus find that the merger is not likely to 
harm the public interest as a result of the exercise of monopsony power over content providers.  As a 
result, we decline to take action with regard to potential monopsony power. 
62. SDARS Receivers. USE claims that the transaction would create a vertical monopoly in 
the manufacturing and distribution of satellite radio receivers and that this would harm consumers.186  
USE argues, for example, that even if the combined company does not raise its monthly subscription fee, 
it could raise equipment prices to optimize overall revenues.  This is a potential harm, USE states, that 
  
181 McGannon June 29, 2007 Ex Parte at 3-4; Bert W. King (King) Comments at  57; see also Letter from 
Lawrence A. Walke, NAB, to Marlene H. Dortch, Secretary, FCC (June 19, 2008) at 1 & Atts. (stating that content 
providers will lose negotiating leverage if the merger is approved).
182 For a general discussion of monopsony power, see Carlton & Perloff, supra n.167, at 105-07.
183 However, our current assumption that this is a merger to monopoly does not preclude future competition to 
SDARS by a new or nascent technology.
184 The question of who benefits more from a bargain is merely a transfer between the two bargaining parties, not a 
detriment to efficiency that results in a societal cost.  Efficiency concerns arise only once an entity with market 
power can restrict supply and thus change the market price from the most efficient level.
185 King Comments at  57; see also Sirius Nov. 16, 2007 Response to Information and Document Request at 
SIRIUS-FCC-I.B.001647-001657 [REDACTED].
In this Order, REDACTED indicates that confidential or proprietary information that is subject to a Protective 
Order in this proceeding has been redacted from the public version of this Order.  The unredacted text is included in 
the confidential version of this Order, which is available upon request only to those parties who have executed and 
filed with the Commission signed acknowledgments of the protective orders. Qualified persons who have not yet 
signed the required acknowledgments may do so in order to obtain the confidential version of this Order.
186 Letter from Charles H. Helein, Counsel for USE, to Robert M. McDowell, Commissioner, FCC (Jan. 15, 2008) at 
1 (USE Jan. 15, 2008 Ex Parte); see also Letter from Robert E. Cooper, Jr., Atty Gen. of Tennessee, on behalf of 
Atty Gens. of Connecticut, Iowa, Kansas, Louisiana, Maryland, Mississippi, Missouri, Nebraska, Ohio, Oklahoma, 
Rhode Island, Washington, and Wisconsin, to Marlene H. Dortch, Secretary, FCC (July 3, 2008) at 3 (Tenn. Atty 
Gen. July 3, 2008 Ex Parte).
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will be difficult to detect because prices at retail points of sale are diverse and hard to supervise.187 To 
prevent this harm, USE asks that we require the combined company to open and make available the 
technical specifications of its devices and network so that receiver manufacturers can develop receivers 
for consumers to use as they choose.188 USE states that its proposed condition is consistent with well-
established open access polices and precedent of the Commission, including the Carterfone189 decision 
and the Commissions recent reaffirm[ation] [of] the historical rationale for open access policies in its 
service rules for the Upper 700 MHz spectrum block.190 MAP supports USEs request, asserting that the 
post-transaction vertical monopoly would, by design and in effect, eradicate consumer choice and price 
competition across manufacturers.191
63. Applicants initially opposed USEs request, arguing that USE is attempting to resolve a 
private contractual matter currently subject to arbitration in the guise of seeking a merger condition,192
and that the proposed condition would inure to USEs benefit alone without regard to concerns about the 
quality of equipment made by Applicants suppliers.193 Applicants also contend that the combined 
company would not have an economic incentive to slow innovation, increase receiver prices, or cause any 
other potential harm of which USE complains.194 Rather, Applicants maintain, the combined company 
would have the incentive to ensure the availability of low-cost, innovative, high-quality receivers.195  
Moreover, Applicants state that USEs argument is based on an erroneous factual predicate because 
neither XM nor Sirius relies on a single source for radios.196
64. USE replies that its current arbitration relates to past issues with Sirius and is unrelated to 
the potential anticompetitive effects posed by a vertical monopoly in the satellite radio market.197 Further, 
  
187 USE Jan. 15, 2008 Ex Parte at 3. USE also claims that the merged entitys additional hard-to-detect harms to 
consumers could include reduced equipment quality, lower quality of customer service, and slower innovation 
cycles.  Id.
188 See USE Reply at 8 (quoting approvingly Public Knowledges description of the open-device condition).
189 See Use of the Carterfone Device in Message Toll Telephone Service, 13 FCC 2d 420 (1968).
190 USE Jan. 15, 2008 Ex Parte at 2 (stating that the Commission determined that the winners of the six C Block 
licenses would not be permitted to restrict subscribers to using only those devices that the licensees provide).
191 Letter from Parul P. Desai, Andrew Jay Schwartzman, MAP, and Michael Calabrese, New America Foundation, 
to Marlene H. Dortch, Secretary, FCC (Jan. 29, 2008) at 1.  In addition to Carterfone, MAP mentions the 
Commissions 2005 cable set-top box leasing order as an example of Commission decisions following open access 
principles.  Id. at 2.
192 Consolidated Opposition of  Sirius and XM to USE and NAB (Dec. 26, 2007) at 2 (Consolidated Opposition).  
Applicants state that USE is a former Sirius licensed manufacturer whose contract expired. Id. at 3.  Applicants 
explain that Sirius opted not to continue the relationship because the parties had incompatible business 
philosophies and, at the time of the contracts expiration, were in arbitration covering almost every aspect of the 
parties relationship.  Id.
193 Consolidated Opposition at 4 (This market intrusion would undoubtedly benefit USE  and essentially derail 
USEs arbitration with Sirius  but it is difficult to see how it would benefit consumers or, in fact, make it easier for 
the Commission to conclude the WCS/Satellite Radio Terrestrial Repeater rulemaking).
194 Id.
195 Id.
196 Id. at 5 (citing radio suppliers as including Delphi, Pioneer, Samsung, Alpine, Audiovox, Sony, Polk, Rotel, 
Kenwood, Clarion, and Visteon).
197 USE Reply at 1-2.
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USE maintains that Applicants are the only parties responsible for the design and development of 
hardware compatible with their networks, and therefore would be able to control the manufacture of 
receivers.198 Finally, USE argues that the power of the combined firm would hurt not only it but also 
small retailers because small retailers would not have sufficient negotiating power to receive favorable 
terms for such things as promotions and return policies.199
65. Currently, Applicants each are intimately involved with the design, manufacture, and sale 
of SDARS receivers.  As is the case in other telecommunications industries (e.g., wireless 
telecommunications, satellite television), SDARS receivers are sold branded or co-branded with the XM 
or Sirius name and can receive only one of the two SDARS services.  In addition, Applicants own the 
intellectual property that is necessary for the receivers manufacture.  Consistent with the practices of 
providers in other sectors of the telecommunications marketplace, the two Applicants subsidize the retail 
price of SDARS receivers paid by the consumer.  Partially because of that subsidy, the only current 
manufacturers of SDARS receivers are in direct contractual agreements with Applicants, and we see no 
basis in the record for concluding that additional manufacturers would enter the market.  The record also 
indicates that Applicants are [REDACTED].200
66. We find that the proposed merger is likely to harm the public interest by allowing one 
company to gain increased leverage over the terms and conditions of the contracts for the manufacture of 
SDARS radios.  We agree with USEs concern that the loss of head-to-head competition between 
Applicants has the potential of harming consumers by dampening innovation in the manufacture of 
SDARS receivers.  In addition, we note that there could be other risks.  For instance, because of their 
involvement in the manufacture of SDARS receivers, Applicants could also prevent the development of 
SDARS receivers that are compatible with other forms of audio entertainment, such as MP3 players and 
HD Radio.  However, Applicants have addressed this concern by voluntarily committing to an open, non-
exclusive architecture.  Accordingly, we accept Applicants voluntary commitment to permit any device 
manufacturer to develop SDARS receivers and to incorporate other technology, such as HD Radio, iPod 
ports, and Internet connectivity so long as it will not result in harmful interference with the merged 
companys network.  We conclude that this, and the additional voluntary commitments on open access, 
adequately mitigate the potential harm presented by this transaction, as discussed in Section VI.B.4, 
below.  
67. Aeronautical Services. Garmin International, Inc. (Garmin) raises the concern that the 
equipment it developed for use with XMs real-time weather information services will become obsolete 
after the merger because Applicants satellite-based weather systems are not compatible, and Garmin is 
  
198 Id. at 3.  USE states that Directed Electronics, Inc. (DEI) recently reported to analysts that it held 95 percent of 
Siriuss aftermarket sales in the third quarter and 62 percent of market share for retail satellite radio receivers. Id. at 
2-3.  With regard to the radio manufacturers listed by Applicants, USE states that Applicants have pointed to 
historical manufacturers and their historical account does not describe the market today. Id. at 3. 
199 Id. at 4.  Applicants also argue that USE lacks standing because it did not file a petition to deny the merger 
application in a timely manner.  Consolidated Opposition at 1.  To the extent USE failed to timely file a petition to 
deny, we will treat USEs comments as an informal objection and address them here.  See 47 C.F.R.  1.41; Pacific 
Gas and Electric Company, Memorandum Opinion and Order, 18 FCC Rcd 22761, 22765-66 n.47 (2003); see also 
Nextel License Holdings 4, Inc., Order, 17 FCC Rcd 7028, 7033  16 (2002) (noting that there is no standing 
requirement to file an informal objection).
200 See, e.g., Sirius Mar. 4, 2008 Response to Information Request at SIRIUS-FCC-SUPP.000217-00018, SIRIUS-
FCC-SUPP.000513-000559; SIRIUS-FCC-SUPP.000631-000700; XM Mar. 3, 2008 Response to Information 
Request at XM-S-0000001-0000053, XM-S-00000054-0000138, XM-S-0000139-0000208; XM Mar. 18, 2008 
Response to Information Request at XM-S-001875-001928.
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concerned that the merged company will choose Siriuss system and abandon that of XM. 201 Garmin 
states that abandoning the XM/Garmin system is contrary to the public interest because the Sirius system 
is not fully developed, and because commercial aviators will each face $5,000 to $6,000 in costs to 
switch.202 Garmin therefore urges the Commission to condition approval of the merger on the continued 
use by XM of Garmins devices for a period of 20 years, which it says are their normal life expectancy.203
68. We reject Garmins proposed condition.  First, Garmins claims are speculative; it is not 
clear whether the merged company will choose to use only one weather information service or, if so, 
which one that will be.204 Moreover, we find it unlikely in the near term that the merged company would 
strand its current customers.  Indeed, their submissions indicate exactly the opposite.205 Finally, as for the 
longer term, the question of which weather information service the merged company should choose (or 
whether it should provide both services) is one best answered by the company and the marketplace.206
C. Other Potential Public Interest Harms
69. In this section we examine the impact of the merger on the Commissions goals of 
diversity and localism.  We find that Applicants voluntary commitments address concerns about the 
potential loss of diversity.  We find that the merger is not likely to frustrate the Commissions localism 
goal.
1. Impact of the Transaction on Diversity
70. Some commenters contend that the merger would result in reduced programming 
diversity because the reduction in competition would diminish the incentive to innovate and provide 
diverse programming207 and because channel capacity available for other channels will be reduced when 
the combined entity allocates some of its capacity to best of both channels.208 Additionally, some 
commenters allege that the merger will harm independent content producers, DJs, artists, and on-air 
personalities that now enjoy the potential of having two companies compete for their services; the merger, 
by eliminating this competition, therefore would lead to fewer choices and less program diversity for 
  
201 See generally Letters from M. Anne Swanson, Dow Lohnes, Counsel for Garmin, to Marlene H. Dortch, 
Secretary, FCC (Apr. 26, 2007 and Apr. 27, 2007).
202 Id.
203 Id.
204 See, e.g., News Corp.-Hughes Order, 19 FCC Rcd at 583, 585  245, 248 (finding that speculative harms do 
not provide a basis for either denying their Application or for imposing regulatory conditions); Comcast-AT&T 
Order, 17 FCC Rcd at 23308  160.
205 See Joint Opposition at 22-23 (the combined company will have every incentive to maintain and improve upon 
these offerings without any need for Commission action.).
206 In addition, we decline to intercede here in distribution negotiations between Applicants and RCN Corp., who 
urges the Commission to require Applicants to make assurances that SDARS programming will continue to be made 
available to RCN.  See Letter from Richard Ramlall, Senior Vice Pres., Strategic & External Affairs and 
Programming, RCN Corp., to Kevin J. Martin, Chairman, FCC (July 17, 2008) at 2-3.
207 NAB Petition at 30-32; AAI Comments at 8, 12-15; Entravision Comments at 17-18; Prometheus Comments at 
4-5; RIAA Comments at 7; John Smith Comments at 2, 4; Clear Channel Comments at 7; Letter from Michael L. 
Barrera, President and CEO, United States Hispanic Chamber of Commerce to Thomas Barnett, Asst. Atty Gen, 
Antitrust Div., DOJ and Kevin J. Martin, Chairman, FCC (Aug. 28, 2007) at 2-3 (USHCC Aug. 28, 2008 Ex 
Parte).
208 AAI Comments at 12-13; Independent Spanish Broadcasters Assoc. (ISBA) Comments at 1-2.
Federal Communications Commission FCC 08-178
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consumers.209 Commenters also argue that the elimination of one of the SDARS providers would cause a 
reduction in viewpoint diversity.210 Other commenters allege that the transaction would reduce diversity 
in minority- and women-oriented and owned programming211 and adversely affect the hiring of minorities 
and women for management positions.212
71. Applicants and other commenters argue that the merger would likely lead to no 
significant reduction in programming diversity, and may enhance the incentives of Applicants to provide 
more diverse programming.213 Applicants state that the merger will allow them to eliminate overlapping 
and redundant programming, giving them more channel capacity to use for more diverse offerings serving 
smaller audiences, including minority and childrens programming.214 Applicants note that they currently 
offer 12 identical program channels and 75 substantially similar channels,215 and aver that eliminating 
their redundant programming would free capacity for more diverse offerings not currently offered on 
either system.216 Further, Applicants argue that a combined company would be better positioned 
financially to take a chance on niche programming.217 In this regard, Public Knowledge observes that low 
revenues and a small audience base have forced Applicants to abandon alternative and niche 
programming in favor of mainstream programming that attracts the largest audiences.  It argues that the 
higher revenues and elimination of duplicate programming will provide the merged entity with the means 
to carry alternative programming and programming for underserved communities.218
72. To address this potential harm, as discussed in more detail in Sections VI.B.5 and 
VI.B.6., below, Applicants voluntarily commit to lease capacity to qualified entities and to set aside 
capacity for noncommercial educational and informational programming.219 We believe this voluntary 
commitment mitigates the potential harm from a decrease in diversity.
2. Impact of the Transaction on Broadcasters Advertising Revenues
73. Commenters claim that the merger would cause terrestrial broadcasters to lose 
advertising revenue to the merged SDARS provider, which would ultimately result in the reduction of 
their production and airing of local programming and thereby disserve listeners and the Commissions 
  
209 NAB Petition at 31-32; Prometheus Comments at 4-5; RIAA Comments at 7.  This argument also is addressed in 
part in Section IV.B.2, supra.
210 AAI Comments at 14-15; Entravision Comments at 18; NABOB Petition at 11, 12-13; NPR Petition at 3-7; TAP 
Petition at 3-4.
211 AWRT Petition at 5-6; NABOB Petition at 9-12; TAP Petition at 4; ISBA Comments at 1-2; USHCC Aug. 28, 
2007 Ex Parte at 2-3.
212 AWRT Petition at 5-6.
213 Application at 12-13; Public Knowledge Comments at 4; CEI Comments at 3-4.
214 Application at 12-13; Joint Opposition at 19-21.
215 Application at 12-14.
216 Id. (stating that the freed-up capacity could be used for expanded non-English language programming, childrens 
programming, minority-oriented programming, and programming related to public safety and homeland security).
217 Joint Opposition at 19-21; see also Women Impacting Public Policy (WIPP) Comments at 1 (asserting that a 
merger would offer more opportunities for women and minority programmers).
218 Public Knowledge Comments at 4.
219 See Sections VI.B.5, VI.B.6, infra.
Federal Communications Commission FCC 08-178
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localism policy goals.220 NAB claims that the merged entity would be expected to use revenues from its 
higher-priced premium service offerings to cross-subsidize its national advertising rates with revenues 
from its premium service offerings, which would allow the merged entity to drive down advertising rates, 
to the detriment  in the first instance  of broadcasters.221 46 Broadcasters similarly argue that the 
merged entity will use monopoly rents to cross-subsidize its aggressive entry into the advertising 
markets to the competitive detriment of local broadcasters.222 NAB also claims that broadcasters will 
lose advertising revenue and thereby be forced to reduce the amount of locally produced programming as 
a result of the merger because the combined entity will increase the amount of commercials in its 
programming.223 NAB asserts that as a result of a significant increase in commercial time post-merger, 
[t]he amount radio stations can charge advertisers to reach SDARS subscribers in their audiences will 
fall as the satellite services sell more commercial time to advertisers, and radio stations revenues will 
decline as a consequence.224 Applicants have not responded to this issue.
74. The Commission finds that the commenters have failed to provide sufficient evidence 
that the proposed merger would substantially impact the revenues from the sale of advertising by 
broadcasters, to the detriment of their ability to air locally oriented programming.  We find that these 
claims of harm are speculative.  The commenters do not offer sufficient economic analysis to show that it 
would be economically beneficial to the merged entity.  Commenters only evidence that the merged 
entity plans to increase commercial time during programming, post-merger, is the mention of increased 
advertising synergies post-merger during a conference call with investors and in financial analyst 
reports.225 Such evidence fails to show with any certainty that the merged entity intends to increase the 
use of commercials in its programming.  Indeed, as NAB notes, programmers always run the risk of 
losing audience when they increase the amount of commercials during programming.226 The loss of 
revenue from the loss of subscribers needs to be weighed against the incremental increase in revenue 
obtained from the additional commercial time, to determine whether it would be economically feasible.227  
  
220 NAB Petition at 33.
221 Id. at 33.
222 46 Broadcasters Petition at 5.
223 NAB Response to Comments, Wildman Decl. at  12.
224 Id. at  28.  Wildman explains that currently, due to a lack of significant amount of commercials on satellite 
radio, local radio stations remain the primary audio services through which advertisers can reach SDARS 
subscribers.  For this reason, Wildman suggests, increased SDARS subscriber counts have not had as large an 
impact on terrestrial radios revenues as one might otherwise predict.  Id.
225 Id. at  26.  C3SR cites to a comment of Mel Karmazin made during an interview on Forbes.com:  [Sirius] 
would like to see advertising revenue eventually make up about 10% of Sirius total revenue, up from the current 
4% to 5%.  C3SR Oct. 3, 2007 Ex Parte, Att.  Mr. Karmazins statement provides insufficient evidence to conclude 
that the merged entity has immediate plans to increase commercial time during programming to the detriment of 
broadcasters.
226 See NAB Response to Comments, Wildman Decl. at  18, 23-24.
227 C3SR submits a presentation, which includes the calculation Profitability of an Increase in Commercial Time 
to show whether it would be advantageous for the merged entity to increase commercial time.  Letter from Benjamin
D. Arden, Williams Mullen, Counsel for C3SR, to Marlene H. Dortch, Secretary, FCC (Oct. 3, 2007), Att., 
Analysis of the CRA Submission  (C3SR Oct. 3, 2007 Ex Parte).  However, we note that C3SRs computation 
only restates the above-referenced economic assumption:  if the increased revenue from additional commercials is 
greater than the revenue declines due to subscription losses, then the merged entity would consider adding additional 
commercial time.  There are no additional variables included in the calculation to make any conclusions as to 
(continued.)
Federal Communications Commission FCC 08-178
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Moreover, we note that Applicants cite to two studies from 2006 and 2007, which find satellite radio 
accounts for only about 4 percent of all radio listeners.228 Thus, there is insufficient evidence that the 
merger would decrease the advertising prices that broadcasters could charge, thereby reducing their 
revenue and negatively affecting the amount of locally produced programming.229
V. POTENTIAL PUBLIC INTEREST BENEFITS
A. Analytical Framework
75. As part of our public interest evaluation, we consider whether the transaction is likely to 
produce public interest benefits.230 We apply several criteria in deciding whether a claimed benefit 
should be considered and weighed against potential harms.  First, the claimed benefit must be transaction 
specific.  This means that the claimed benefit must be likely to be accomplished as a result of the 
transaction but be unlikely to be realized by other means that entail fewer anticompetitive effects.  
Second, the claimed benefit must be verifiable.231 Applicants are required to provide sufficient 
supporting evidence so that the Commission can verify the likelihood and magnitude of each claimed 
benefit.232 We will discount or dismiss speculative benefits that cannot be verified.233 In this regard, 
benefits that are expected to occur only in the distant future are inherently more speculative than benefits 
that are expected to occur more immediately.  Moreover, we calculate the magnitude of benefits net of the 
cost of achieving them.234 Third, the benefits must flow through to consumers, and not inure solely to the 
benefit of the company.235
(Continued from previous page)    
Applicants course of action or whether increasing commercial time during programming would be economically 
advantageous.
228 Application at 22, n.51 (citing Phil Rosenthal, Satellite deal foes dont hear message, CHICAGO TRIBUNE (Feb. 
28, 2007) (summarizing an Arbitron study that found satellite radio accounted for 3.4 percent of radio listening)); 
see also The Katz Radio Group, Satellite Radio Penetration, RADIOWAVES (Dec. 2006) at http://www.katz-
media.com/pubs/RadioWaves/121206/RadioWavesDEC2006.pdf (finding that satellite radio constituted 4.1 percent 
of the market) (visited June 19, 2008).
229 For a related discussion concerning the prohibition on the insertion of local content on terrestrial repeaters, see 
Section VI.C.2, infra.
230 For instance, we consider any efficiencies and other benefits that might be gained through increased ownership 
or control. Communications Act  613(F)(2)(D), 47 U.S.C.  533(f)(2)(D).
231 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3330-31  140; News Corp.-Hughes Order, 19 FCC Rcd at 610 
 317; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20630  189-90; Applications of NYNEX Corp., Transferor, and 
Bell Atlantic Corp., Transferee, For Consent to Transfer Control of NYNEX Corp. and its Subsidiaries, 12 FCC Rcd 
19985, 20064 (Bell Atlantic-NYNEX Order) (1997); SBC-Ameritech Order, 12 FCC Rcd at 20064  158; 
Comcast-AT&T Order, 17 FCC Rcd at 23313  173.
232 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3331  140; News Corp.-Hughes Order, 19 FCC Rcd at 610  
317; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20630  190; Comcast-AT&T Order, 17 FCC Rcd at 23313  173;
see also 1992 Horizontal Merger Guidelines  4 (Rev. 1997).
233 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3331  140; News Corp.-Hughes Order, 19 FCC Rcd at 611  
317; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20630  190.
234 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3331  140; News Corp.-Hughes Order, 19 FCC Rcd at 610-11 
 317; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20630  190.
235 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3331  140; Applications of Western Wireless Corp. and 
ALLTEL Corp. for Consent to Transfer Control of Licenses and Authorizations, 20 FCC Rcd 13053, 13100  132 
(2005) (ALLTEL-WWC Order).
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76. Finally, we apply a sliding scale approach to our ultimate evaluation of benefit claims.  
Under this approach, where potential harms appear both substantial and likely, Applicants demonstration 
of claimed benefits also must reveal a higher degree of magnitude and likelihood than the Commission 
would otherwise demand.236 On the other hand, where potential harms appear less likely and less 
substantial, we will accept a lesser showing.237
B. Claimed Benefits
77. Applicants claim that the transaction will increase competition and benefit consumers.  
They maintain that the synergies and resulting cost savings from the merger will allow the combined 
entity to offer greater programming choices and lower prices, as well as preserve the future viability of 
satellite radio.238 Specifically, the claimed benefits include:   (1) more programming choice at lower 
prices,239 (2) more diverse programming,240 (3) accelerated deployment of advanced technology,241 (4) 
commercialization of interoperable radio receivers,242 and (5) operational efficiencies to safeguard the 
future of satellite radio.243 Moreover, Applicants claim that the combined company will be able to 
eliminate redundant programming, which will eventually free capacity for more diverse offerings that are 
not currently available on either companys system, including expanded non-English language 
programming, childrens programming, and additional programming aimed at minority and other 
underserved populations.244 Applicants explain that without the merger, an increase in programming 
diversity is unlikely, as both companies will be required to maintain overlapping, mainstream content in 
order to retain and attract customers.245 We find that these programming options offer consumers 
enhanced choices and are merger-specific benefits.  Based on the evidence before us, however, we do not 
find the other claimed benefits to be merger specific.  We discuss each of Applicants claimed benefits 
below.
1. Increased Programming Options/Lower Prices
78. Applicants advance two types of additional programming options and pricing structures 
for consumers that, they argue, are benefits specific to the proposed merger.  First, Applicants pledge to 
offer consumers new packaged channel options designed to take advantage of the addition of each 
Applicants unique programming to the others service in the short term.  Second, to serve the interests of 
consumers who prefer greater control over their programming options, Applicants propose to offer an a la 
  
236 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3331  141; News Corp.-Hughes Order, 19 FCC Rcd at 611  
318; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20631  192 (citing SBC-Ameritech Order, 14 FCC Rcd at 14825  
256).
237 Liberty Media-DIRECTV Order, 23 FCC Rcd at 3331  141; AT&T Inc., and BellSouth Corp., Application for 
Transfer of Control, 22 FCC Rcd 5662, 5761-62  203 (2007) (AT&T-Bell South Order).
238 Application at 10.  
239 Id. at 10-12.
240 Id. at 12-14.
241 Id. at 14-15.
242 Id. at 15-16.
243 Id. at 17-20.
244 Applicants assert this increased program diversity on satellite radio may even stimulate more diverse 
programming on terrestrial radio.  Id. at 13 n.32.
245 Id. at 13.
Federal Communications Commission FCC 08-178
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carte channel selection system that will give subscribers the power to tailor their channel selections to 
their own tastes and interests.
a. New Programming Packages
79. Applicants propose to offer a number of new programming packages at lower prices to 
subscribers.246 Specifically, Applicants claim that they will offer consumers a range of new programming 
packages at prices lower than currently available, including:  (1) a Mostly Music package, which 
includes commercial-free music as well as several family-oriented and religious channels and emergency 
alerts, for $9.99 per month; (2) a News, Sports & Talk package, which includes various sports, talk and 
entertainment, family, news, traffic and weather, and emergency channels, for $9.99 per month; (3) two 
Family Friendly packages, which exclude adult-themed content, at a cost of $11.95 per month or 
$14.99 per month, respectively; and (4) a best of both package, which will enable customers to receive 
selected programming from both companies at a cost of $16.99 per month.247  Applicants assert that these 
new programming packages will result in public interest benefits in the form of lower prices and greater 
consumer choice.248
80. Commenters disagree about the potential benefits of Applicants proposal to offer new 
programming packages to subscribers. WIPP agrees with Applicants that the merger will create public 
interest benefits, because operational efficiencies created by the merger will result in lower prices for 
consumers.249 Others criticize the proposal, particularly the proposed best of both package.  C3SR 
criticizes Applicants proposed tiered programming packages on the grounds that  (1) the proposed 
packages will cost more than the current service packages offered by Applicants, (2) the premium 
channels cost more per channel, (3) the base rates are not guaranteed, (4) consumers are unlikely to have 
the two satellite receivers necessary to receive such programming, and (5) providing crossover 
programming would increase costs due to exclusive agreements and limiting technology in existing 
receivers and that costs per channel would increase.250 NATOA expresses concerns about potential 
exclusivity clauses in Applicants programming agreements, arguing that such clauses may place some of 
the exclusive content that might otherwise be offered in Applicants best of both package out of 
consumers reach.251
81. Applicants respond that the best of both package represents a significant discount  34 
percent  over the only way to obtain all of the programming included in this package today  buying a 
  
246 See Applicants June 13, 2008 Ex Parte at 1-3.  Applicants have voluntarily committed to provide these 
programming options, subject to individual channel changes in the ordinary course of business and, in the case of 
certain programming, the consent of third-party programming providers.  Id. at 3.
247 Id. at 1-3.
248 Joint Opposition at 12, 14.  RIAA raised concerns about the impact of the transaction on the recording industry.  
Letter from Victoria F. Sheckler, Deputy Gen. Counsel, RIAA, to Marlene H. Dortch, Secretary, FCC (July 23, 
2008).  In response, Applicants state that the a la carte and other programming proposals were not intended, and are 
not anticipated, to reduce revenue from copyright royalty payments.  Instead, they explain that the programming 
packages were designed to provide more choice and lower prices and hopefully increase revenue, which should 
have a positive effect on copyright royalty payments to artists and record companies.  Applicants July 25, 2008 Ex 
Parte at 2.
249 WIPP Comments at 1-3.
250 C3SR Reply at 17-18.  C3SR also claims that subscribers will need a new receiver to have the option to choose 
smaller bundled packages with channels from both services.  C3SR Reply at 17.  Applicants specifically state that 
this is not a requirement.  Joint Opposition at 12.
251 NATOA Petition at 4.
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Sirius satellite radio, an XM satellite radio, and paying monthly subscription fees totaling $25.90 (two 
times $12.95) to Sirius and XM.252 Applicants note that a number of subscribers expressed interest in 
receiving through a single receiver exclusive content not available on their current service.253 Applicants 
also cite to a CRA analysis that found that introducing new programming packages, without taking away 
current options, necessarily raises consumer welfare.254 The study concluded that no packages that 
combine content from the two providers would be available absent the merger.255
82. Knowledge Ecology International (KEI) states that the proposed pricing plans are 
temporary and are not guaranteed over the longer term.256 We find that KEIs argument is sufficiently 
addressed by Applicants voluntary commitment, which will ensure that these benefits materialize.  As 
discussed below, Applicants have voluntarily committed to offer for sale an interoperable receiver in the 
retail after-market within nine months of the consummation of the merger,257 as well as capping the price 
for all proposed (as well as current) programming packages for at least 36 months after consummation of 
the merger.258 This voluntary commitment ensures that these programming packages will be available at 
the rates proposed by Applicants for at least three years after the merger occurs.
83. We conclude that Applicants proposed new programming packages will increase 
consumer choice and offer consumers lower-cost options.  These are well-recognized public interest 
benefits.259 While some commenters criticize specific aspects of Applicants proposal, no one disputes 
that these new packages would offer consumers additional choice, or that a number of the packages are 
priced lower than Applicants current offerings.  Although the proposed best of both package (which 
combines some of the most favored content from both XM and Sirius) is priced higher than Applicants 
current offerings, the content included in this proposed package can be accessed today only by 
subscribing to both XM and Sirius, obtaining receivers for each Applicants service, and paying monthly 
fees totaling $29.50.260 Finally, with respect to comments addressing the impact of exclusivity provisions 
in Applicants programming agreements, we find that only a small fraction of the agreements contain 
provisions of this type.  In addition, Applicants have promised to conduct a thorough analysis of the 
existing contracts and negotiate any new terms that may be necessary to implement the proposed 
programming options.261 This pledge, in combination with the relatively small number of agreements 
containing exclusivity provisions, gives us confidence that the vast majority of Applicants programming 
will be available post-merger.
  
252 Applicants Supp. Comments at 9.
253 Id.
254 Joint Opposition at 16 (citing C3SR Petition, CRA Study at 83).
255 Id.
256 KEI Reply at 2-3.
257 Applicants July 25, 2008 Ex Parte at 2; see discussion in Section VI.B.3, infra.
258 Applicants June 13, 2008 Ex Parte at 5; see discussion in Section VI.B.1, infra.
259 Adelphia Order, 21 FCC Rcd 8307  243 (2006) ([E]fficiencies created by a proposed transaction can mitigate 
anticompetitive harms if they enhance a firms ability and incentive to compete and therefore result in lower prices, 
improved quality, enhanced service, or new products.); News Corp.-Hughes Order, 19 FCC Rcd at 610  316; Bell 
Atlantic-NYNEX Order, 12 FCC Rcd at 20063  158; Sprint-Nextel Order, 20 FCC Rcd at 14013  129; see also
Horizontal Merger Guidelines  4.
260 Even if we were to consider the best of both package as being a price increase, a number of the other proposed 
packages are priced lower than Applicants current offerings.
261 Sirius Nov. 16, 2007 Response to Information and Document Request, Narrative at 61.
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84. Moreover, despite some commenters claims to the contrary, we find these benefits to be 
merger specific.262 We note that the Commission does not have to find that a proposed transaction or 
merger is the only means to achieve a claimed benefit,263 merely that the benefit is unlikely to be 
achieved by another means that would entail fewer anticompetitive effects.  After reviewing the record, 
we conclude that this is the case with regard to each of the new programming packages.  The record 
indicates that prior to the merger, [REDACTED].264 Accordingly, we accept Applicants assertion that 
the proposed programming packages would not be offered by Applicants absent a merger and find the 
benefits that will accrue from the offering of such packages in the future to be merger specific.
b. A la Carte Programming 
85. In addition to the new packaged programming options proposed by Applicants, 
Applicants voluntarily commit to offer two a la carte offerings to subscribers.265 A La Carte I would 
allow a subscriber to individually select 50 channels for $6.99 per month.  Subscribers to A La Carte I 
will be able to purchase additional individual channels for 25 cents per month each as well as premium 
packages of certain Sirius channels for $5 or $6 per month each and of certain XM channels for $3 or $6 
per month each.  A La Carte II would allow a subscriber to select 100 channels, including access to 
best of both programming offered by the other satellite provider, for $14.99 per month.  Subscribers 
would have the ability to craft an individualized line-up that includes some of the most popular and 
appealing programming currently offered by the other provider.  Subscribers would select the channels 
they wish to receive via Applicants websites.  Applicants assert that the proposed a la carte plans would 
create public interest benefits in the form of lower prices and greater choice.
86. A number of commenters respond that subscribers will receive fewer channels and will 
pay the same or slightly more for them.266 C3SR asserts that Applicants a la carte plan is in reality a 
tiered bundling of reduced total programming that costs more on a channel-by-channel basis than 
Applicants current packages.267 C3SR states that Applicants fail to explain how less content for less 
money is the same or better than the current competition between two providers.268
87. Applicants dispute these assertions.  According to Applicants, [a] subscriber choosing 
the A La Carte I plan would save more than 70 dollars a year.269 Applicants contend that opponents 
assertions regarding the per-channel price of the a la carte options are fundamentally flawed because they 
  
262 King Comments at  77-78; Smith Comments at 8-11; NAB Response to Comments at 22-25; Letter from David 
K. Rehr, NAB, to Kevin J. Martin, Chairman, FCC (July 25, 2007) at 3-4; KEI Reply at 2-3.
263 Adelphia Order, 21 FCC Rcd at 8314  261.
264 See, e.g., XMH-008-00002391, XMH-001-00004380, and XME-009-00046821 [REDACTED].
265 Applicants June 13, 2008 Ex Parte at 1-3.  Applicants have voluntarily committed to provide these programming 
options, subject to individual channel changes in the ordinary course of business and, in the case of certain 
programming, the consent of third-party programming providers.  Id. at 3.
266 NATOA asserts that consumers will receive fewer channels under the a la carte option while paying essentially 
the same $12.95 price as that charged for the regular XM or Sirius package.  NATOA Petition at 4.  Similarly, 
Common Cause argues that the opt-out system proposed by XM and Sirius may not save consumers money, 
depending on how channels are valued.  Common Cause Petition at 44.  See also NPR Petition at 18-19; NAB Reply 
to Opposition at 8-9.
267 CS3R Reply at 17; see also NAB Petition at 20-21 (arguing that a la carte would require the manufacture and sale 
of next generation receivers).
268 CS3R Reply at 17.
269 Applicants Supp. Comments at 8.
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assume that all subscribers value all channels equally, which, Applicants assert, is not the case. 270 Rather, 
Applicants claim that a subscriber who only listens to 20 channels on Sirius service would pay more than 
64 cents per month per valued channel under the current Sirius plan, but would pay approximately 35 
cents per month for those channels under the A La Carte I plan.  Applicants add that consumers who 
value having more channels will not be harmed because such individuals will continue to be able to 
purchase the full set of channels offered by Sirius or XM at the current price or choose a new option that 
includes additional programming.271
88. We conclude that Applicants voluntary a la carte commitment represents a clear public 
interest benefit.  First, consumers will benefit from their ability to tailor the programming they receive to 
match their individual tastes and interests.  The proposed a la carte system will allow consumers to, in 
effect, block unwanted or objectionable content that would otherwise be delivered to consumers 
SDARS devices.  Second, the proposed a la carte system will ensure that customers of the merged 
company have greater control over the programming they receive and pay for than subscribers to XM or 
Sirius currently enjoy.  Third, consumers will benefit from their ability to obtain more programming that 
they desire for lower prices.  In order to ensure that consumers have ready access to relevant information 
concerning their programming options, we also require that the combined company make the content and 
price details concerning its a la carte options and channel lineups clearly available on its websites.  
89. Our conclusion that the voluntary a la carte commitment proposed by Applicants is by 
nature a public interest benefit is consistent with the conclusion in the Further Report on the Packaging 
and Sale of Video Programming Services to the Public that [a] la carte could be preferable to bundling in 
providing diverse programming response to consumer demand.272 In that Report, the Media Bureau also 
noted that consumer choice over content is an important consumer benefit, stating that [t]he marketplace 
will thus be able more quickly to shed unpopular networks in favor of popular networks under a la carte 
than under bundling and in the process become more responsive to consumer demand for better 
programming.  Programmers may also have an increased incentive to improve their programming under a 
la carte.273
90. We find unpersuasive the argument that Applicants proposal falls short of a true a la 
carte option.274 The Commissions goal is to ensure that the public receives the greatest benefit from 
services that require use of public spectrum.  Applicants promised a la carte options plainly will enhance 
consumer choice and will provide subscribers with an opportunity to lower their bills.
91. We find other criticisms of the proposal likewise unpersuasive.  For example, NAB, 
NPR, and the Consumer Federation of America, Consumers Union, and Free Press (CFA) assert that 
Applicants claims of benefits arising from their proposed new programming packages are speculative 
and non-verifiable.275 As stated above, both NAB and C3SR question when Applicants will make 
available the interoperable receiver necessary to initiate the proposed a la carte offering.276 Commenters 
  
270 Id.
271 Id. at 8-9.
272 Media Bureau, Further Report On the Packaging and Sale of Video Programming Services To the Public (Med. 
Bur., Feb. 9, 2006 ) at 5 (Further Report on Video Programming), available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263740A1.pdf.
273 Further Report on Video Programming at 35-36.
274 C3SR Reply at 17.
275 NAB Petition at 37-38; NPR Petition at 19; Common Cause Petition at 42-43; CFA Supp. Comments at 4; C3SR 
Reply at 17-21, 23.
276 NAB Reply to Opposition 8; C3SR Reply at 17-21, 23-24. 
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also contend that subscribers have no guarantees as to the quality or duration of any benefits from the 
pricing and programming offerings.277 As discussed further below, we find that Applicants voluntary 
commitments address these criticisms by ensuring that the claimed benefits are likely to materialize in the 
near term.  We note that in addition to the voluntary commitments regarding programming, Applicants 
also have voluntarily committed to offer for sale an interoperable receiver in the retail after-market within 
nine months of the consummation of the merger,278 and cap for at least 36 months the price of all 
proposed (as well as current) programming packages.279 These voluntary commitments ensure that 
consumers will receive Applicants proposed a la carte offerings and that these offerings will be available 
for at least three years at the proposed price.
92. Finally, a number of commenters assert that Applicants promised a la carte offering is 
not a merger-specific benefit because each company could offer a la carte today.280 Applicants disagree, 
asserting that both Sirius and XM have experienced billions of dollars in losses and that neither company 
has ever turned a profit.281 They assert that, without the synergies and economies of scale created by this 
merger, neither company could afford to introduce a la carte offerings.282 We find that Applicants are not 
likely to offer a la carte options absent the merger.  Thus, the public interest benefits associated with these 
a la carte offerings are merger specific.
93. As we note in Section IV.B.1., above, under our worst-case scenario approach, we 
assume, arguendo, that the merged firm would have an incentive to charge prices that are higher than
those charged by Applicants as independent competitors.  The voluntary a la carte commitments will 
provide an additional safety valve against price increases in the future.  The a la carte system provides 
individual consumers with increased choice as to the cost of the services they will receive from the 
merged entity, allowing consumers to tailor their SDARS service not only to fit their programming tastes, 
but individual budgets as well.  Should the merged entity choose to raise prices for its services in the 
future, consumers electing the a la carte plan will be able to reduce the number of channels selected to 
compensate for the price increase.  This option for consumers places an additional check on the merged 
entitys ability to raise prices that does not exist under Applicants current take-it-or-leave-it single 
service offerings.  Accordingly, in addition to the general increase in consumer welfare that results from 
giving subscribers increased control over the type of programming they receive, the increased bargaining 
power held by consumers post-merger will help alleviate the potential competitive harms resulting from 
the merger.
2. Accelerated Deployment of Advanced Technology
94. Applicants claim that the merged entity will realize efficiencies that will allow the 
offering of advanced technologies and new services sooner than would occur absent the transaction.  They 
state that subscribers will have access to a wider range of easy-to-use, multi-functional devices such as 
real-time traffic and rear-seat video devices, as well as new services such as advanced data and telematics 
  
277 NAB Petition at 37-39; NPR Petition at 19; Common Cause Petition at 42-43; CFA Supp. Comments at 4; C3SR 
Reply at 17-21.
278 Applicants July 25, 2008 Ex Parte at 2; see discussion in Section VI.B.3, infra.
279 Applicants June 13, 2008 Ex Parte at 5; see discussion in Section VI.B.1, infra.
280 C3SR Comments at 34-35; NABOB Petition at 6-7; NPR Petition at 18-19; AAI Comments at 10-12; Clear 
Channel Comments at 6; Common Cause Petition at 44; Entravision July 9, 2007 Comments at 17; King Comments 
at  78; Smith Comments at 8-11; King Reply at  24; NAB Response to Comments at 22-25.
281 Joint Opposition at 17.
282 Id.  As noted in Section V.B.1.a., above, evidence in the record indicates that [REDACTED].  See section 
V.B.1.a, supra.  [REDACTED]
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services, including traffic, weather, and infotainment services.283 The claimed efficiencies are based on 
combining Applicants engineering resources, as well as accelerated involvement of third-party 
manufacturers and technology partners in developing and offering new devices and services based on 
common engineering standards and protocols for the combined company.284
95. We agree with commenters that these claimed public interest benefits are not 
cognizable.285 Some advanced services data and telematics services already are being introduced by 
Applicants.286 Moreover, the analysis submitted by Applicants relies [REDACTED].  Given that the 
additional capacity will not be available until after interoperable receivers are widespread, we find that, to 
the extent that this claimed benefit might be based on the availability of additional capacity (and thus be 
merger specific), it is speculative.287
3. Commercial Availability of Interoperable Satellite Radio Receivers
96. Applicants claim that the proposed transaction will foster the commercial introduction of 
interoperable satellite radios.288 Applicants state that, absent the merger, they would have little incentive 
to subsidize the cost of interoperable receivers, and that, without a subsidy, manufacturers  have not 
expressed interest in producing or distributing interoperable radios.289  
97. Regardless of whether the proposed merger facilitates the commercial introduction of an 
interoperable satellite radio, it cannot be considered as a merger-specific benefit because existing 
Commission rules already require Applicants to introduce such a radio regardless of the merger.290  
Eleven years ago, when the Commission required that SDARS operators certify that their system includes 
a receiver design that permits all users to access all SDARS systems, it noted that the mandate would 
encourage consumer investment in equipment, create economies of scale, and promote competition by 
reducing transaction costs and enhancing consumers ability to switch between competing DARS 
providers.291 To the extent that increased competition between SDARS providers was viewed as one of 
the benefits from promoting receiver interoperability, the commercial availability of interoperable satellite 
receivers, in the context of the proposed transaction, will not provide that benefit.
98. Furthermore, to the extent that timely, widespread penetration of interoperable receivers 
will be necessary for the realization of any of the other potential public interest benefits, such as increased 
  
283 Application at 14-15.
284 Id. at 15.
285 NAB Petition at 42-43 (stating nothing currently prevents the companies from working together to develop 
common engineering standards and protocols (citing Application at 15)); see also AAI Comments at 15 (stating 
that there is no indication why such benefits would not be possible absent the proposed transaction. (citing 
Application at 14-15)).
286 See Application at 14-15; Joint Opposition at 22-23, nn.62-63 (stating that both companies currently offer 
integrated traffic and navigation systems for automobiles and that Sirius and Chrysler Group announced the launch 
of SIRIUS Backseat TV).
287 See Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at SIRIUS-FCC-IV.000005 
and SIRIUS-FCC-IV.000087.
288 Application at 15-16.
289 Id. at 16.
290 See 47 C.F.R.  25.144(a)(3)(ii).  For a detailed discussion of Applicants existing interoperable radio 
obligations, see Section VI.B.3, infra.
291 1997 SDARS Service Rules Order, 12 FCC Rcd at 5796  105.
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program diversity, spectrum efficiencies, or other operational efficiencies, the timely commercial 
availability of an interoperable receiver does not provide a separate public interest benefit, but is 
necessary if the other potential public interest benefits are to be considered cognizable.  Thus, we cannot 
consider the commercial availability of interoperable receivers to be a merger-specific benefit.  Instead, 
we review this issue in Section VI.B., below.  We note, however, that Applicants voluntary commitment 
to offer for sale an interoperable receiver in the retail aftermarket within nine months of consummation of 
the merger will facilitate the realization of other claimed public interest benefits in a timely manner.292
4. Operational Efficiencies
99. Applicants claim that the proposed transaction will allow the merged firm to achieve 
operational efficiencies that will reduce costs, and that those cost savings can be passed on to subscribers 
in the form of lower subscription rates.  The claimed efficiencies include the ability to reduce 
programming expenses by eliminating duplicative staffing needed for the creation of self-produced music 
programming; to reduce operational expenses for the infrastructure used to broadcast and transmit 
satellite radio programming; to reduce marketing and subscriber acquisition costs, including efficiencies 
due to economies of scale in equipment; to reduce duplicative research and development efforts and 
accelerate innovation in products and services in the retail and automotive distribution channels; and to 
achieve operating efficiencies by reducing duplicative general and administrative expenses. 293 Applicants 
also maintain that, with their proposed merger, they will be able to operate more effectively by adopting 
the best and most efficient practices of the two companies based on their core competencies.294
100. We find that some of the claimed efficiencies, such as some of the reduced operational 
expenses and claimed scale economies for some equipment design, are not merger specific.295 However, 
others of the claimed savings relate to the elimination of duplicate expenses and scale economies which 
can only be achieved by the combined company.296 To the extent that any of the claimed efficiencies 
might be obtainable by other means that would entail fewer anticompetitive effects, the Commission 
would discount that portion of the claimed benefits.297
101. In addition, Applicants have not provided sufficient evidentiary support to estimate the 
magnitude of many of the claimed efficiencies.298 Of those efficiencies that might be considered to be 
  
292 See Section VI.B.3, infra.
293 Application at 17-20.  See also Sirius Nov. 16, 2007 Response to Information and Document Request IV at 
SIRIUS-FCC-IV.000012-000076, for a more detailed description of the claimed savings.
294 Application at 18-19.
295 NAB Petition at 45-46 (claiming that the reduction in operational expenses relating to maintaining distinct 
broadcast operations infrastructure to facilitate the scheduling, storage, compression, transmission, and uplink of 
programming and content to Applicants satellites and terrestrial repeater networks may not be merger specific 
because it is not clear whether these savings could not be obtained through other means.  (citing Application at 17)).  
See Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at SIRIUS-FCC-IV.000048-
000049 [REDACTED].
296 Application at 17-18.  See also, e.g., Sirius Nov. 16, 2007 Response to Information and Document Request IV at 
SIRIUS-FCC-IV.000026-000048.  [REDACTED].
297 Most of the claimed efficiencies that might have been obtainable by other means would also be discounted in our 
analysis inasmuch as they would not be realized within several years of closing or the claimed savings would relate 
to a reduction in fixed costs, rather than variable costs.
298 Mar. 24, 2008 DOJ Press Release at 4  (It was not possible to estimate the magnitude of the efficiencies with 
precision due to the lack of evidentiary support provided by XM and Sirius, and many of the efficiencies claimed by 
the parties . . . were not likely to be realized within the next several years.).
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merger specific, some are not expected to be realized within several years of closing.299 For example, 
Applicants claim that there will be merger-specific savings in satellite operations, broadcast operations, 
terrestrial networks, programming and content, customer service and billing, sales and marketing, 
subscriber acquisition costs, general and administrative costs, product development, and interest 
expense.300 Some efficiencies, such as savings from elimination of duplication in non-unique, self-
produced music channels, can be realized relatively quickly,301 but other efficiencies, such as the more 
efficient use of spectrum through the elimination of the need to broadcast largely duplicative content, can 
only be realized once interoperable receivers are widespread.302 Some of the efficiencies related to the 
satellite fleet and satellite operations would be implemented over a long period of time.303 These savings 
are discounted in our analysis to the extent that some of the savings cannot be verified and some of the 
efficiencies would only be expected to be realized in the distant future.304
102. With respect to programming costs, NAB notes that the merged firm would not be able to 
eliminate some of the most expensive programming due to existing long-term contracts.305 However, 
Applicants claimed savings with respect to programming costs are based largely on eliminating 
duplication in the overhead and production of similarly formatted channels and improving scale 
economies in content acquisition.306 Potential cost savings on content covered by long-term contracts 
would only be realized as the contracts covering the content come up for renewal.307
103. We agree with commenters who express concern that consumers will not benefit from 
some of the claimed efficiencies, inasmuch as some of the savings relate to a reduction in fixed costs, not 
  
299 See Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at SIRIUS-FCC-IV.000006-
000007.
300 Joint Opposition at 26-29.  See Sirius Nov. 16, 2007 Response to Information and Document Request IVA-B at 
SIRIUS-FCC-IV.000012-000076 for a description of the claimed savings.
301 See also Sirius Nov. 16, 2007 Response to Information and Document Request IVA-B at SIRIUS-FCC-
IV.000018-000019.
302 See Sirius Nov. 16, 2007 Response to Information and Document Request IVA-B at SIRIUS-FCC-IV.000086-
000087 [REDACTED].  See also XM Nov. 16, 2007 Response to Information and Document Request IVA-B, 
Narrative at 25-26 (noting that XM anticipates that [REDACTED] million XM single-platform devices will be 
factory installed in vehicles sold for the period [REDACTED], and are likely to remain in widespread use for 
[REDACTED].  XM also states that the combined company will need to broadcast a full complement of 
programming to both the XM and Sirius platforms for many years, including the useful life of the XM satellite 
constellation.  Id. at 25).
303 See Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at SIRIUS-FCC-IV.000049-
000054, [REDACTED].
304 See Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at SIRIUS-FCC-IV.0000005-
000008, SIRIUS-FCC-IV.000012-000076 for a summary of efficiencies and estimated timing.  For example, 
[REDACTED].  
305 NAB Petition at 45.
306 Joint Opposition at 27.  See also Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at 
SIRIUS-FCC-IV.000016-000026, for an analysis of savings that can be realized from the elimination of duplicative 
programming-related expenses and through economies of scale in content acquisition.
307 See Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at SIRIUS-FCC-IV.000023-
000026, and SIRIUS-FCC-I.B.001647-001657, XM-I-B-3-00000734, and XM-I-B-3-00003738-00003743.  
[REDACTED].
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variable costs.308 Applicants engaged an outside consulting firm to evaluate the claimed efficiencies 
arising from the merger, and the firm concluded that such efficiencies will likely lead to reductions in 
both marginal and fixed costs, with [REDACTED] percent of the claimed annual savings attributed to a 
reduction in variable costs.309 We find that, to the extent that [REDACTED] percent of these efficiencies 
lead to a reduction in variable costs, consumers will benefit from those claimed savings.  However, only 
[REDACTED] percent of the efficiencies that lead to a reduction in variable costs would likely be 
realized within the next several years.310 Thus, the remainder of those efficiencies are speculative.  As a 
result we find that only [REDACTED] percent of the claimed efficiencies are likely to be realized within 
several years of the transaction and could lead to a reduction in variable costs.  Accordingly, we find that 
consumers might benefit from, a small percentage, at most, [REDACTED] percent, of the claimed 
efficiencies.
VI. BALANCING PUBLIC INTEREST HARMS AND BENEFITS
A. General Introduction and Summary
104. As previously noted, under the Communications Act, we must determine whether the 
public interest, convenience and necessity will be served by the granting of the Application.311 We now 
employ a balancing process, weighing the potential public interest harms of the proposed transaction that 
we have found against the potential public interest benefits.312 Applicants bear the burden of proving, by 
a preponderance of the evidence, that the proposed transaction, on balance, will serve the public 
interest.313 Absent Applicants voluntary commitments and other conditions, the harms outweigh the 
potential benefits; the presence of these voluntary commitments mitigates the harms and ensures that 
benefits are realized.  The Application and the record before us make clear that, on balance, the public 
interest will be served by approval of the Application subject to the voluntary commitments and other 
conditions that we discuss below.  Accordingly, we accept the Applicants voluntary offer of these 
commitments with the expectation that Applicants will adhere to each according to its specified terms and 
within the specified timeframes.314 These voluntary commitments are fully enforceable by the 
  
308 NAB Petition at 45, 46, 47.
309 See Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at SIRIUS-FCC-IV.000016. 
[REDACTED].
310 See Sirius Nov. 16, 2007 Response to Information and Document Request IV.A-B at SIRIUS-FCC-IV.000007, 
SIRIUS-FCC-IV.000016, and SIRIUS-FCC-IV.000060-.000061.
311 See 47 U.S.C.  309(a), (d); 310(d).
312 See SBC-AT&T Order, 20 FCC Rcd at 18300  16; Verizon-MCI Order, 20 FCC Rcd at 18443  16; Sprint-
Nextel Order, 20 FCC Rcd at 13976  20; News Corp.-Hughes Order, 19 FCC Rcd at 483  15; Comcast-AT&T 
Order, 17 FCC Rcd at 23255  26; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20574  25.  See Section VII.A., 
infra, for discussion of the applicable language in the Commissions 1997 SDARS Service Rules Order, prohibiting 
the transfer of control of one SDARS licensee to the other SDARS licensee.  As discussed below, the Commission 
finds that the prohibition set forth in paragraph 170 of the 1997 SDARS Service Rules Order is a binding substantive 
rule, and that it is in the public interest to repeal the rule prohibiting the merger.     
313 See SBC-AT&T Order, 20 FCC Rcd at 18300  16; Verizon-MCI Order, 20 FCC Rcd at 18443  16; Sprint-
Nextel Order, 20 FCC Rcd at 13976-77  20; News Corp.-Hughes Order, 19 FCC Rcd at 483  15; Comcast-AT&T
Order, 17 FCC Rcd at 23225  26; EchoStar-DIRECTV HDO, 17 FCC Rcd at 20574  25. 
314 Clear Channel suggests that Applicants voluntary commitments are not enforceable.  Letter from Lawrence R. 
Sidman, Paul Hastings, Counsel for Clear Channel, to Marlene H. Dortch, Secretary, FCC (June 20, 2008) at 2.  We 
disagree.  As we state herein, grant of the Application is conditioned on the merged entitys fulfillment of 
Applicants voluntary commitments and other conditions.  Therefore, the merged entitys compliance with the 
voluntary commitments is an enforceable condition.
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Commission.
B. Applicants Voluntary Commitments and Other Conditions
1. Price Cap
105. For the reasons given above, we assume that the relevant product market may be limited 
to SDARS, and therefore that it is likely that the merged entity will have an increased incentive and 
ability to raise prices above pre-merger levels and that this incentive and ability will grow stronger over 
time.315
106. As discussed above, Applicants have argued, however, that due to the particular nature of 
demand for satellite radio services, the merged entity will have an incentive instead to lower prices.316  
Several commenters dispute this argument, and instead predict that the merged entity will raise prices.  
For example, NAB states that SDARS is the relevant market, that the merger will lead to a monopoly, and 
that demand is relatively inelastic, so that the merged entity will be able to raise prices profitably.317  
C3SR agrees with a narrow product definition, and raises concerns regarding higher prices, foregone 
benefits from price competition, increased advertising, and lower value overall.318 Similar concerns are 
raised by Common Cause,319 KEI,320 and AAI.321
107. To address concerns about such potential price increases, Applicants have voluntarily 
committed to cap the retail prices on their basic subscription package and on the new programming 
packages that they voluntarily commit to offer.322 Specifically, Applicants voluntarily commit to not raise 
the retail prices on their basic $12.95 per month subscription package, their a la carte programming 
package, their best of both programming packages, their mostly music and their news, sports, and
talk programming packages, and their discounted family-friendly programming package.323 Applicants 
voluntarily commit to these price caps for at least 36 months after consummation of the merger.324  
Notwithstanding the voluntary commitment, after the first anniversary of the consummation of the 
merger, the combined company may pass through cost increases incurred since the filing of the merger 
application as a result of statutorily or contractually required payments to the music, recording and 
publishing industries for the performance of musical works and sound recordings or for device recording 
fees.325 The combined company will provide customers, either on individual bills or on the combined 
companys website, details about the specific costs passed through to consumers pursuant to the 
  
315 Applicants dispute a narrow product market definition, arguing instead that satellite radio faces many
competitive alternatives.  Application at 20-48.  We do not have sufficient evidence in the record to conclude 
definitively that this is the case.  See Section IV.B.1.a, supra.
316 See Application at 10-12.  See Section IV.B, supra, for further discussion.
317 NAB Petition at 26-29; see also NAB Response to Comments at 17-20.
318 See, e.g., C3SR Petition at 13-20.
319 Common Cause Petition at 14-39.
320 See generally KEI Reply.
321 AAI Comments at 16-29.
322 Applicants June 13, 2008 Ex Parte at 5.
323 See Sections V.B.1.a-b, supra.
324 Applicants June 13, 2008 Ex Parte at 5.
325 Id.  See Tenn. Atty Gen. July 3, 2008 Ex Parte at 3.
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preceding sentence.326
108. We accept this voluntary commitment and conclude that it will mitigate the harm from 
any post-merger price increases.  In addition, Applicants may not reduce the number of channels in either 
their current packages or their new packages for three years.  Some commenters submit that the price cap 
should be longer than three years, arguing that the potential harms will still remain at the end of the 
period.327 We do not know what the competitive landscape will be like in three years. Accordingly, six 
months prior to the expiration of the commitment period, the Commission will seek public comment on 
whether the cap continues to be necessary in the public interest.  The Commission will then determine 
whether it should be modified, removed, or extended.328 We also note that Applicants voluntarily commit 
to a price cap, not a price freeze, and therefore retain sufficient flexibility to flow through to consumers 
any cost savings or other efficiencies resulting from the merger.329
109. Some commenters argue that a price cap cannot ameliorate the harms that are likely to 
flow from the merger.  CEI, for example, states that price increases are sometimes beneficial for 
consumers if the resultant overall package is a better deal for consumers, and that fear can prevent 
companies from instituting price decreases if there is concern that subsequent necessary future increases 
will cause antitrust action.330 CEI further argues that intermodal competition (i.e., between SDARS and 
other technologies) can suffice to discipline the merged company.331 Common Cause contends that only 
intramodal competition (i.e., between the existing two SDARS providers) can constrain prices, and thus 
also concludes that merger conditions cannot ameliorate the harms from the merger.  Common Cause 
therefore opposes merger approval.332 AAI, referring to the EchoStar-DIRECTV HDO, indicates that a 
price freeze condition would not account for other dimensions of competition, such as quality and 
  
326 Id.; see Letter from U.S. Sens. John F. Kerry, Benjamin Cardin, and Claire McCaskill, to Kevin J. Martin, 
Chairman, FCC (June 27, 2008) at 2 (recommending that the Commission impose requirements to make pricing 
transparent and verifiable) (Sens. Kerry, Cardin, and McCaskill June 27, 2008 Ex Parte); Tenn. Atty Gen. July 3, 
2008 Ex Parte at 3 (stating that the Commission should not endorse Applicants proposed methods of disclosing rate 
increases because it could be viewed as a preemption of states existing consumer protection laws). 
327 See, e.g., Letter from Gigi B. Sohn, Pres., Public Knowledge, to Marlene H. Dortch, Secretary, FCC (June 18, 
2008) (Public Knowledge June 18, 2008 Ex Parte); Letter from U.S. Rep. Edward J. Markey, Chairman, House 
Subcommittee on Telecommunications and the Internet, to Kevin J. Martin, Chairman, FCC (July 15, 2008) at 2 
(recommending that the Commission adopt a six-year price freeze) (Rep. Markey July 15, 2008 Ex Parte).  
328 Cf. Cable Television Consumer Protection and Competition Act of 1992: Development of Competition and 
Diversity in Video Programming Distribution: Section 628(c)(5) of the Communications Act: Sunset of Exclusive 
Contract Prohibition, Review of the Commissions Program Access Rules and Examination of Programming Tying 
Arrangements, Report and Order and Notice of Proposed Rulemaking, 22 FCC Rcd 17791, 17795-96  5 (2007); see 
also Adelphia Order, 21 FCC Rcd at 8276  164; News Corp.-Hughes Order, 19 FCC Rcd at 555, 576  179, 227.  
Although it is not part of Applicants voluntary commitment, we are conditioning our approval of the merger on the 
Commissions ability to modify or extend the price cap beyond three years.  We also are conditioning our approval 
of the transaction on the merged entitys continuing adherence to the other commitments and conditions, as specified 
herein, which continue indefinitely.
329 Comments received as part of the rulemaking regarding HD Radio technology will help inform our decision 
regarding the level of competition in the radio market and the continuing need for a price cap.  See Section VI.B.4, 
infra. 
330 CEI Comments at 13.
331 Id. at 6-8, 15.
332 Common Cause Petition at 46-48. 
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innovation, and that it would not allow possible price reductions resulting from SDARS competition.333  
NAB argues that the merged companies cannot be counted on to comply with any conditions, that pricing 
conditions are of dubious legality, and that approving the merger would contravene the Commissions 
preference for intramodal competition.334  
110. We reject these arguments.  As stated elsewhere in this document, on balance we find 
that with the voluntary commitments by Applicants and the other conditions we impose, the benefits of 
the merger outweigh the potential harms.  Because SDARS is in a mode of growing penetration so as to 
reach profitability, the merged entity will have sufficient incentive to improve quality and innovate for the 
foreseeable future.  Despite this incentive, [REDACTED].335 Because we do not have sufficient record 
evidence to conclude that the relevant market includes any other entities than Applicants themselves, we 
cannot rely upon intermodal competition post-merger to discipline prices.  However, Applicants 
voluntary commitment will prevent any harm that might result from a possible price increase, if it were 
intramodal competition that prevented the price increase before the merger.336 As far as non-compliance 
is concerned, if NAB or any party has evidence of such behavior, it may file a complaint with the 
Enforcement Bureau. 
2. New Programming Packages and A La Carte Options
111. As discussed in Section VI.B.2., several commenters express concerns about whether the 
potential competitive harms of the merger can be mitigated by a condition requiring Applicants to offer 
new programming and a la carte packages.337 NAB and others state that the effectiveness of such a 
condition would depend on the array of channels to be included in the package, the attractiveness of the 
structure to customers, the pricing of the packages, the duration of the offering, the likelihood of changes 
after the expiration of any short-term conditions, whether equipment prices will increase to offset lost 
revenue, and whether there will be more advertising-supported programming to offset lost revenues.338  
NAB also raises concerns about the types of programs that will be available in each type of package; 
whether customers will have to buy through a larger basic package before getting combined premium 
programs at a higher price; what channels will be dropped (reducing consumer choice); and, if no 
channels are dropped, what kind of audio degradation consumers will face.339 CFA asserts that the 
merged entity will likely cite exclusive programming agreements as a reason for not including their best 
programming in particular packages.340 C3SR questions whether customers will be able to migrate 
  
333 AAI Comments at 29-30.
334 NAB Response to Comments at 25-28.
335 See, e.g., Sirius Mar. 4, 2008 Response to Information and Document Request at SIRIUS-FCC-SUPP.000214-
000216, SIRIUS-FCC-SUPP.000311, and SIRIUS-FCC-SUPP.000393; XM Mar. 3, 2008 Response to Information 
and Document Request at XM-S-0000140-0000158 and XM-S-0000869.
336 We reject NPRs proposed condition to place the merged entity under Title II common carrier regulation.  NPR 
Petition at 21-22.  Applicants voluntary commitments that we accept in this Order ameliorate the potential harms of 
this merger adequately, at a much lower cost and with less intrusiveness into the market.
337 NAB Petition at 37-38; NPR Comments at 19; Common Cause Petition at 42-43; CFA Supp. Comments at 4; 
C3SR Reply at 17-21, 23.
338 NAB Petition at 37-38.
339 Id. at 40.
340 CFA Supp. Comments at 4-5.
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between packages and channel selections.341
112. In order to address these concerns, Applicants have voluntarily committed to cap current 
prices and offer a la carte and new programming packages.  The merged firm will maintain the current or 
proposed prices for each their existing and proposed product offerings (including regular, as well as 
premium channels), for a term of at least thirty-six (36) months after consummation of the merger.  In 
addition, six months prior to the expiration of the commitment period, the Commission will seek public 
comment on whether the cap continues to be necessary in the public interest.  The Commission will then 
determine whether it should be modified, removed, or extended.  This cap on prices will protect 
consumers while they enjoy the immediate benefits of a la carte pricing options.342 Applicants have 
voluntarily committed to introduce the first a la carte-capable receivers in the retail after-market and to 
begin offering a la carte programming within three months of the consummation of the merger.343 We 
find that Applicants voluntary commitments will mitigate the potential harms identified by NAB and 
others and will provide a merger-specific benefit to consumers.
3. Interoperable Radio Receivers
113. Section 25.144 of the Commissions rules sets forth the licensing provisions for SDARS 
systems.344 As part of these provisions, each applicant for an SDARS license must certify that its system 
includes a receiver that will permit end users to access all licensed satellite DARS systems that are 
operational or under construction.345 As the Commission stated when it adopted this rule, such receiver 
interoperability would at the very least permit consumers to access the services from all licensed 
satellite DARS systems.346  The Commission stated that a receiver interoperability requirement was an 
alternative to mandating a specific receiver standard, concluding that a more flexible certification 
approach would promote innovative system design.347 In October 1997, the International Bureau granted 
each Applicants application to provide SDARS, subject to certification  that its final user receiver 
design is interoperable with respect to [the other SDARS providers] system final design.348
114. Since authorization in 1997, Applicants have twice filed letters with the Commission 
regarding their compliance with the Commissions receiver interoperability rule.  By letter dated October 
6, 2000, Applicants stated their continued compliance with the receiver interoperability rule and 
described their efforts towards making available interoperable receivers to the public.349 Applicants noted 
  
341 C3SR Reply at 23.
342 See Section VI.B.1.
343 Applicants June 13, 2008 Ex Parte at 2.
344 47 C.F.R.  25.144.
345 47 C.F.R.  25.144(a)(3)(ii).
346 1997 SDARS Service Rules Order, 12 FCC Rcd at 5797  106.
347 Id. at 5795  102. The Commission also stated that receiver interoperability would encourage consumer 
investment in SDARS equipment, would create economies of scale necessary to make SDARS receiving equipment 
affordable, and would promote competition by reducing transaction costs and enhancing consumers ability to 
switch between competing SDARS providers.  See id. at 5796  103.
348 See 1997 XM Radio Authorization Order, 13 FCC Rcd at 8851  54; 1997 Sirius Authorization Order, 13 FCC 
Rcd at 7995  57.
349 Letter from John R. Wormington, Sr. Vice Pres., Eng. and Operations, XM and Robert D. Briskman, Exec. Vice 
Pres., Eng., Sirius, to Magalie Roman Salas, Secretary, FCC at 2, transmitted by Letter from Jennifer D. Hindin, 
Wiley Rein & Fielding, Counsel for Sirius, to Magalie Roman Salas, Secretary, FCC, IBFS File No. SAT-LOA-
19900518-0003 (Oct. 6, 2000) (XM/Sirius Oct. 6, 2000 Letter).  These efforts included plans to develop 
(continued.)
Federal Communications Commission FCC 08-178
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that they do not control the actual manufacture, distribution and sale of receivers, but instead license 
their receiver technology to radio manufacturers.350 As a result, they stated that they rely on such 
manufactures to produce SDARS receivers, as well as on automakers to install receivers and on retailers 
to market receivers for installation in existing vehicles.351
115. By letter dated March 14, 2005,352 Applicants reiterated that they had complied with the 
Commissions interoperability rule by including interoperable radios in their respective system 
designs.353 They claimed that they had designed and licensed receiver systems with common 
components capable of receiving Sirius or XM programming, although not both simultaneously, and that 
they had invested nearly $5,000,000 in a joint venture aimed at combining XMs and Siriuss proprietary 
chipsets into a compact and efficient device capable of receiving both services.354 They emphasized, 
however, that the availability of interoperable radios  will depend in large part on factors outside of 
the control of either XM or Sirius, including consumer demand for interoperability and the willingness of 
manufacturers to manufacture, distribute, market and sell interoperable radios after carefully weighing the 
integration, qualification, costs and efficiency considerations.355
116. We note that each of Applicants subsidizes the manufacture and sale of receivers in 
various ways.  Applicants state, however, that there is little incentive for each to subsidize the cost of 
interoperable receivers  as is done with single-system receivers  because of uncertainty whether the 
subsidy would be recouped since the purchaser might not subscribe to that particular Applicants 
service.356 Applicants state that the absence of subsidization has limited the interest of manufacturers in 
producing and distributing such interoperable receivers.357 As a result, no interoperable radio is currently 
on the market.
117. Commenters in this proceeding disagree whether Applicants efforts to date comply with 
the Commissions provisions regarding radio receiver interoperability.  Applicants argue that the 
interoperability requirement mandates that an interoperable receiver be designed, but does not require the 
production, distribution, marketing, or sale of such a receiver, which Applicants claim is outside of their 
(Continued from previous page)    
interoperable chipsets capable of receiving both services and an agreement to introduce interim radios that would 
include a common wiring harness, head unit, antenna, and an interchangeable trunk-mounted box containing 
processing elements for both companys signals. Id. at 4.
350 XM/Sirius Oct. 6, 2000 Letter at 3.
351 Id.
352 Letter from William Bailey, Sr. Vice Pres., Reg. and Govt Affairs, XM and Patrick L. Donnelly, Exec. Vice 
Pres. and Gen. Counsel, Sirius, to Thomas S. Tycz, Chief, Sat. Div., Intl Bur., FCC (Mar. 14, 2005) at 1 
(XM/Sirius Mar. 14, 2005 Letter).  This letter responded to a request from the International Bureau to the  
Applicants to provide the current status of their efforts to develop an interoperable receiver and a clear timeframe 
for making such an interoperable receiver available to the public. See XM 2005 Authorization Order, 20 FCC Rcd 
at 1625  12.
353 XM/Sirius Mar. 14, 2005 Letter at 1.
354 Id. at 1-2. Applicants stated that they expected that a prototype for this type of interoperable radio would be 
completed in 2005.  Id. at 2.
355 Id. at 2-3.
356 Application at 16.
357 Id.  In addition, Applicants state that automobile manufacturers have not opted to include interoperable receivers 
in their vehicles.  Id.
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control.358 Relying on their October 6, 2000 and March 14, 2005 letters, Applicants maintain that they 
have complied with the receiver interoperability requirement by designing an interoperable receiver.359  
Other commenters contend that Applicants have not satisfied the receiver interoperability requirement 
contained in the Commissions rules.360 For example, NAB asserts that the receiver interoperability 
provision requires both the development and the public availability of an interoperable receiver and that, 
in any event, the design process for an interoperable receiver is not complete.361 Another commenter 
claims that existing receivers made available to the public are already capable of interoperability, despite 
claims by Applicants to the contrary.362
118. In addition, C3SR filed a letter on May 27, 2008, alleging that Applicants have not been 
truthful or candid in their representations regarding compliance with the Commissions receiver 
interoperability requirement.363 C3SR states that documents submitted by Applicants demonstrate that 
instead of complying with the interoperability requirement, Applicants [REDACTED].364 In particular, 
C3SR claims that the documents show that Applicants concealed the [REDACTED].365 C3SR states that 
the documents also demonstrate [REDACTED].366 C3SR urges the Commission to designate the merger 
applications for hearing and to commence an investigation into whether Applicants lacked candor in their 
representations to the Commission in the Merger Applications and whether the merger is contrary to the 
public interest because it furthers a conspiracy to restrain trade.367 In the alternative, if the Commission 
does not designate the applications for hearing or investigate further, C3SR requests that the Commission 
impose certain remedies in response to the alleged misconduct, including disgorging profits resulting 
  
358 See Joint Opposition at 95-96.
359 Application at 15-16 (citing to the XM/Sirius Mar. 14, 2005 and Oct. 6, 2000 Letters). 
360 Blue Sky Reply at 2-3; Common Cause Petition at 45-46; NABOB Petition at 13-14; King Comments at  8, 
82-84; Letter from U.S. Rep. Mike Doyle, to Kevin J. Martin, Chairman, FCC (May 30, 2007) at 1.
361 NAB Petition  at 54 (quoting XMs SEC Form 10-K for the year ended Dec. 31, 2006 (stating [w]e have signed 
an agreement with SIRIUS Radio to develop a common receiver platform combining the companies proprietary 
chipsets, but the companies have not completed the final design of an operational radio using this platform.); see 
also Letter from Jane E. Mago, Sr. Vice Pres., and Gen. Counsel, Legal and Reg. Affairs, NAB, to Marlene H. 
Dortch, Secretary, FCC (June 27, 2008); Memorandum from David H. Solomon, Wilkinson Barker Knauer, LLP, to 
David K. Rehr, Pres., NAB at 7-9, transmitted by Letter from Larry Walke, Assoc. Gen. Counsel, Legal & Reg. 
Affairs, NAB, to Marlene H. Dortch, Secretary, FCC (Apr. 6, 2007) (NAB Apr. 6, 2007 Ex Parte, Solomon 
Memo); The Proposed Sirius-XM Merger White Paper, the Carmel Group, to NAB, Att. at 7, transmitted by Letter 
from Larry Walke, to Marlene H. Dortch, Secretary, FCC (July 3, 2007) (NAB July 3, 2007 Ex Parte, Carmel 
White Paper).
362 Michael Hartleib argues that many of the XM and Sirius radios in service today are capable of receiving 
either/or service and signals via a firmware update to the receivers.  Letter from Michael Hartleib, to FCC at 4; 
see also Hartlieb Apr. 22, 2007 Petition at 4.
363 Letter from Julian L. Shepard, Williams Mullen, Counsel for C3SR, to Marlene H. Dortch, Secretary, FCC at 3-
8, transmitted by Letter from Julian L. Shepard, Williams Mullen, Counsel for C3SR, to Jamila Bess Johnson, Med. 
Bur., FCC (May 27, 2008) (C3SR May 27, 2008 Ex Parte).
364 C3SR May 27, 2008 Ex Parte at 1.
365 Id. at 5-6.  C3SR states that the documents also show that Applicants [REDACTED].  See id. at 7.
366 Id. at 7.
367 Letter from Julian L. Shepard, Williams Mullen, Counsel for C3SR, to Marlene H. Dortch, Secretary, FCC (June 
4, 2008) at 2.
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from the alleged FCC rule violations,368 restitution to the public,369 an order requiring the adoption of a 
corporate compliance plan,370 and divestiture of one of the existing satellite systems.371
119. Applicants respond that they have fully complied with the Commissions interoperability 
requirement and that the documents cited by C3SR simply reflect the substantial efforts that Applicants 
have taken in developing an interoperable receiver.372 They acknowledge building and developing a 
prototype of an interoperable receiver through a Joint Development Agreement, but have not taken the 
ultimate step of bringing such an interoperable radio to market.373 Applicants deny that interoperable 
receivers designed under the Joint Development Agreement could be sold at [REDACTED] since the 
cost cited in the documents cited by C3SR included [REDACTED].374 Applicants state that the cost did 
not include [REDACTED], and that existing receivers sold by Applicants are available at prices 
significantly less than [REDACTED].375 Applicants also state that the documents cited by C3SR reflect 
only the aspirations of one person who was directed to develop interoperable technology  not to evaluate 
the distribution or sale of interoperable radios  and that the views did not represent the views of 
  
368 Id. at 2-3.  C3SR argues that the merged entity should be required to disgorge profits accrued as a result of 
[REDACTED] including treble damages for such actions.  C3SR estimates the penalties would be in excess of 
$250,000,000.  Id. at 3.
369 Id. at 2-4.  C3SR requests that the merged entity should be required to reimburse the public for the misconduct 
C3SR alleges, in the form of a monetary restitution (including interest) to the Federal treasury to compensate for the 
loss of spectrum auction revenue value resulting from the lack of interoperable radios in the market.  C3SR argues 
that the auction revenues received by the Federal government as a result of the SDARS auction were lower than they 
would have been had the spectrum been auctioned without the interoperability requirement.  Id. at 2-3.  C3SR 
estimates the difference in value of approximately $267 million, and argues this amount should be required as 
payment from the merged entity, along with eleven years of interest on this sum.  Id. at 4.  C3SR further argues that 
the merged entity should be required to compensate consumers directly by providing all subscribers with a new 
interoperable radio device, with comparable quality and features to replace each non-interoperable satellite radio 
purchased in commerce, at no charge, and to provide interoperable replacement units or refunds to consumers who 
purchased more than one non-interoperable receiver.  Id.
370 Id. at 2-3.  C3SR argues that the merged entity should be required to adopt a compliance plan within 30 days of 
consummation requiring the merged entity to ensure truthfulness and accuracy in future communications with the 
FCC and permanently dismissing all officers, directors, and employees of Applicants who participated in, knew of, 
or conspired concerning the alleged violations of the FCC rules.
371 Id. at 4-5.  C3SR requests that the merged entity be required to divest itself of one of the two satellite licenses in 
order to restore full competition to the SDARS market.  Id. at 4.  C3SR further states that as part of the divestiture, 
the merged entity should be required to cease exclusive agreements with programmers, retailers, and manufacturers, 
adhere to temporary restrictions on price increases and advertising limits, and abide by new program access 
requirements to be developed and adopted by the Commission in order to permit a new SDARS competitor with 
programming to be competitive with the merged entity in the short term.  Id. at 4-5.
372 Letter from Robert L. Pettit, Counsel for Sirius, and Gary M. Epstein, Counsel for XM, to Marlene H. Dortch, 
Secretary, FCC, transmitted by Letter from Jennifer D. Hindin, Wiley Rein LLP, to Marlene H. Dortch, Secretary, 
FCC (June 6, 2008) (Applicants June 6, 2008 Ex Parte).
373 Id. at 3.
374 Id. at 6.
375 Id. (stating that a Sirius satellite radio is available nationwide for approximately $29, and that the most expensive 
comparable Sirius and XM radios cost less than $170). 
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Applicants.376 Furthermore, Applicants claim that C3SRs pleading is procedurally and substantively 
deficient and should be dismissed.377
120. We conclude that Section 25.144(a)(3)(ii) requires Applicants to make an interoperable 
receiver commercially available.  As stated above, the rule requires each applicant to [c]ertify that its 
satellite DARS system includes a receiver that will permit end users to access all licensed satellite DARS 
systems that are operational or under construction.378 The rules reference to a receiver that will permit 
end users to access all licensed satellite DARS systems also indicates that consumer availability is 
required,379 as end users cannot use a receiver that is not commercially available.  The Bureaus 
references in 1997 to Siriuss expressed commitment to work with all interested parties to insure that the 
SDARS receivers will permit customers to access both systems,380 and in 2005 to the need for Sirius and 
XM to identify a clear timeframe for making such an interoperable receiver available to the public,381
also support this interpretation.  The 1997 condition that final user receiver design be interoperable382
merely reflects the recognition that Sirius and XM still were designing receivers at the time:  the Bureau 
did not intend (nor did it have authority) to modify the rule to require only the design of an interoperable 
receiver.383
121. Notwithstanding the rules express language requiring that end users have access to 
receivers that can access all licensed satellite DARS systems, we do not believe that Applicants 
interpretation of the receiver interoperability mandate as a design requirement was unreasonable, under 
the circumstances.  As indicated above, Applicants do not manufacture or distribute SDARS receivers, 
and the 1997 condition requires that final user receiver design be interoperable.  Further, the 
Commission did not explicitly require them to assure consumer availability of an interoperable receiver or 
require that all SDARS receivers sold in interstate commerce be interoperable.  Moreover, the 
Commission never specified a deadline for compliance.
122. Based on our examination of the record, we are also not persuaded that C3SRs filing 
raises a substantial and material question of fact that requires a hearing before the Commission can make 
  
376 Id. at 5, 7.  Applicants also provide an affidavit from the author of the documents cited by C3SR which states that 
the documents did not, and were not intended to, reflect the business judgment of Sirius or XM, and they were 
never endorsed or otherwise adopted by Sirius or XM.  Id., Decl. of Michael DeLuca at  2.
377 Specifically, Applicants claim that C3SRs pleading was a de facto petition to deny that was not filed within the 
requisite 30-day period after public notice of acceptance of Applicants merger applications. Applicants June 6, 
2008 Ex Parte at 8-9.  Applicants also assert that the filing is substantively deficient because it does not contain a 
showing supported by affidavit by a person with personal knowledge, but instead relies on speculative statements 
and surmised interpretation.  Id. at 9-10 (citing 47 U.S.C.  309(d)(1)).
378 47 C.F.R.  25.144(a)(3)(ii).
379 1997 SDARS Service Rules Order, 12 FCC Rcd at 5797  106 ([A]t the very least, consumers should be able to 
access the services from all licensed satellite DARS systems and our rule on receiver inter-operability accomplishes 
this.).
380 1997 Sirius Authorization Order, 13 FCC Rcd at 7990  42.
381 2005 XM Authorization Order, 20 FCC Rcd at 1625  12.
382 1997 XM Authorization Order, 13 FCC Rcd at 8851  54; 1997 Sirius Authorization Order, 13 FCC Rcd at 7995 
 57.
383 See 1997 Sirius Authorization Order, 13 FCC Rcd at 7990  42.
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the required public interest determination in this proceeding.384 First, neither the references to 
[REDACTED] nor the information that the documents reveal as to the joint venture companys activities 
reflect a lack of candor.385 Contrary to C3SRs argument, the requirement that Applicants make an 
interoperable receiver commercially available was not unambiguous, as the above analysis indicates, 
and the general language of the joint venture agreement does not cast significant doubt on Applicants 
contention as to how they interpreted that requirement.386 In addition, we perceive no discrepancy 
between the representations in Applicants March 14, 2005 letter to the Commission concerning the status 
of their joint venture activities and later documents cited by C3SR, a presentation to the joint venture 
board and several white papers discussing potential means of distributing interoperable receivers.387 As 
C3SR acknowledges, there is a time lag between the documents, and in any event we are not persuaded 
that Applicants had a duty under Section 1.65 of the Commissions rules to disclose an internal 
presentation or white papers prepared by the joint venture that did not reflect the companies actual 
business plans or conclusions.388
123. C3SR urges the Commission to bring the documents in question to the attention the 
Department of Justice, the antitrust enforcement authority, arguing that they warrant antitrust 
investigation under Section 1 of the Sherman Act.389 [REDACTED]  Further, we are not persuaded that 
the documents cited by C3SR otherwise provide sufficient support for their allegations.  The documents 
reflect [REDACTED].390 These estimates do not reflect that Applicants could have made an 
interoperable receiver available to the mass market, without any subsidy, at a cost comparable to that of 
commercially available Sirius and XM receivers.  As Applicants point out, [REDACTED].391 C3SR also 
maintains that the documents reflect [REDACTED] does not contradict Applicants representations that 
the mass market availability of interoperable radios depends in large part on factors outside of their 
control.392 Finally, although C3SR characterizes Applicants decisions not to make an interoperable 
receiver commercially available in 2006 and 2007 as improper, the documents are consistent with 
Applicants rationale in the Merger Application that making an interoperable receiver commercially 
available would not make economic sense for them.393  [REDACTED]; there is no evidence that 
  
384 See Serafyn v. FCC, 149 F.3d 1213 (D.C. Cir. 1998).  In light of our conclusion here, we need not address 
Applicants claims that C3SRs pleading is procedurally deficient and should be dismissed.
385 C3SR May 27, 2008 Ex Parte at 4-6 (citing Sirius Nov. 16, 2007 Response to Information and Document 
Request I.B. at SIRIUS-FCC-I.B.003104; Sirius Apr. 10, 2008 Response to Information Request at SIRIUS-FCC-
SUPP.001051-001052, 001060-001061, 001087).
386 See Sirius Nov. 16, 2007 Response to Information and Document Request I.B. at SIRIUS-FCC-I.B.003104-
003139.
387 See C3SR May 27, 2008 Ex Parte at 4, n.16, Exh. 3, XM/Sirius Mar. 14, 2005 Letter; see also Sirius Apr. 10, 
2008 Response to Information Request, SIRIUS-FCC-SUPP.001048-001090.
388 C3SR May 27, 2008 Ex Parte at 5; 47 C.F.R.  1.65.
389 C3SR May 27, 2008 Ex Parte at 3.
390 Sirius Apr. 10, 2008 Response to Information Request at SIRIUS-FCC-SUPP.001061-001071; SIRIUS-FCC-
SUPP.001078-001080.
391 Applicants June 6, 2008 Ex Parte at 6-7.
392 Sirius Apr. 10, 2008 Response to Information Request at SIRIUS-FCC-SUPP.001060-001070; 001084-001089.
393 Application at 15-16; Joint Opposition at 21-22.
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Applicants ever had a business plan for mass market deployment.394  [REDACTED]395 Under the 
circumstances, there is not a substantial question of fact as to whether the companies decisions not to go 
forward, in order to avoid creating the perception of such a change, were improper.
124. Applicants have voluntarily committed that the combined entity will offer for sale an 
interoperable receiver in the retail aftermarket within nine months of the consummation of the merger.396  
As a result, subscribers who already have purchased non-interoperable receivers will be able to transition 
to a receiver that has the ability to receive either of the complete programming offerings that the merged 
entity will offer without having to purchase two separate receivers.  In light of this voluntary 
commitment, we dismiss a complaint filed by Michael Hartleib that seeks enforcement of the 
interoperability mandate.397 We conclude that Applicants voluntary commitment to establish a deadline 
to ensure the commercial availability of an interoperable receiver will enable and expedite realization of 
the full benefits of the merger, such as more efficient use of the SDARS spectrum.398 We also find this 
commitment satisfies the request of commenters that commercial deployment of interoperable receivers 
by the merged entity be prompt and subject to a stringent timeline.399
125. We believe that the merged entity will adhere to this voluntary interoperability 
commitment and bring its system into compliance with the Commissions interoperability rule, despite 
commenters views to the contrary.400 Applicants voluntary interoperability commitment is clear in its 
scope and deadline for implementation, which should remove any uncertainty as to what is necessary for 
compliance.401 We decline to impose the additional receiver filtering requirements advocated by 
NextWave Wireless (NextWave).402 We observe that the Commission previously has declined to adopt 
SDARS receiver standards.403 Furthermore, the issue underlying NextWaves proposal (that is, the 
potential for interference between SDARS licensees and adjacent terrestrial wireless services) is the 
subject of a pending rulemaking proceeding, and any filtering obligations are best addressed in the 
  
394 Sirius Apr. 10, 2008 Response to Information Request at SIRIUS-FCC-SUPP.001061-001072.
395 Id. at SIRIUS-FCC-SUPP.001060, 001088.
396 Applicants July 25, 2008 Ex Parte at 2.  Applicants also voluntarily commit to make available, immediately after 
the merger, the design and the specifications for an interoperable radio available for license to equipment 
manufacturers.  Id. 
397 Michael Hartleib states that if the Commission does not approve the merger, then the Commission must enforce 
the interoperability mandate.  Michael Hartleib July 5, 2007 Petition for Declaratory Ruling  at 5.
398 See Section V.B.3, supra.
399 See Tenn. Atty Gen. July 3, 2008 Ex Parte at 3.
400 NAB Apr. 6, 2007 Ex Parte, Solomon Memo at 7-9; NAB July 3, 2007 Ex Parte, Carmel White Paper at 7; 
NABOB Petition at 13-14; Letter from Lawrence R. Sidman, Paul Hastings, Counsel for Clear Channel, to Kevin J. 
Martin, Chairman, FCC (July 18, 2008) at 1-2 (proposing that the Commission require applicants to separately 
maintain and operate assets and businesses until remedial actions are complete and that it reserve the right for the 
Commission to appoint a third party to oversee compliance with the interoperability requirement).
401 Although Applicants previously argued that interoperability has no relevance to the merger and should be 
addressed through traditional enforcement procedures, see Joint Opposition at 98-99 (citing Adelphia Order, 21 
FCC Rcd at 8306  240; SBC-Ameritech Order, 14 FCC Rcd at 14950  571), we note that the precedents that they 
cite are distinguishable because SDARS receiver interoperability presently is not the subject of another proceeding 
before the Commission, and the issue relates entirely to the parties before the Commission in the merger proceeding.
402 Letter from Jennifer M. McCarthy, Vice Pres., Reg. Affairs, NextWave, to Marlene H. Dortch, Secretary, FCC 
(June 18, 2008) (NextWave June 18, 2008 Ex Parte).
403 1997 SDARS Service Rules Order, 12 FCC Rcd at 5795  102.
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context of that proceeding.404
4. Open Access
126. As discussed in more detail in Section IV.B.2., USE proposes, as a condition to the 
merger, that the merged entity provide open access of the technical specifications of its devices and 
network so that receiver manufacturers may choose the receivers they develop for consumers.405 USE 
claims that this condition will prevent a potential vertical monopoly in the manufacturing and distribution 
of satellite receivers and the merged entity from increasing the cost of equipment paid by consumers.406  
MAP and other commenters support USEs request. 407 Senator Christopher S. Bond and U.S. 
Representatives John Dingell and Edward Markey also support a condition that would allow any device 
manufacturer to develop SDARS equipment.408 They support a condition that would allow device 
manufacturers to incorporate additional technology in receivers such as HD Radio technology, iPod ports, 
and Internet connectivity, so long as the technology would not harm the merged entitys network.409  
Finally, Reps. Dingell and Markey propose that the Commission bar the merged entity from entering into 
exclusive contracts that would, for example, prohibit the inclusion of HD Radio chips or iPod 
compatibility in satellite radio receivers.410
127. iBiquity Digital Corp. (iBiquity)411 requests that we condition the merger on mandating 
that the merged entity require manufacturers to include HD Radio technology for digital AM and FM 
radio in all satellite receivers containing analog AM or FM radio technology.412 Other commenters 
  
404 See Amendment of Part 27 of the Commissions Rules to Govern the Operation of Wireless Communications 
Services in the 2.3 GHz Band; Establishment of Rules and Policies for the Digital Audio Radio Satellite Service in 
the 2310-2360 MHz Frequency Band, Notice of Proposed Rulemaking and Second Further Notice of Proposed 
Rulemaking, 22 FCC Rcd  22123 (2007) (2007 SDARS Second Further Notice).
405 See USE Reply at 8.
406 USE Jan. 15, 2008 Ex Parte at 1.
407 Letters from Parul P. Desai & Andrew Jay Schwartzman, MAP, and Michael Calabrese, New America 
Foundation, to Marlene H. Dortch, Secretary, FCC (Jan. 29, 2008, Feb. 27, 2008, Mar. 4, 2008, and Mar. 24, 2008); 
Letters from Gigi B. Sohn, President, Public Knowledge, to Marlene H. Dortch, Secretary, FCC (Mar. 4, 2008 and 
May 20, 2008); Letter from Alex Nogales, President and CEO, National Hispanic Media Coalition, to Marlene H. 
Dortch, Secretary, FCC (May 8, 2008) at 1; Letter from State Atty Gens. Robert McKenna (Washington) and 
Richard Blumenthal (Connecticut), to Marlene H. Dortch, Secretary, FCC (May 8, 2008) at 1 (Atty Gens. May 8, 
2008 Ex Parte).
408 Letter from U.S. Reps. John D. Dingell and Edward J. Markey, to Kevin J. Martin, Chairman, FCC (May 1, 
2008) at 2 (Reps. Dingell and Markey May 1, 2008 Ex Parte); Letter from U.S. Sen. Christopher S. Bond, to 
Kevin J. Martin, Chairman, FCC (June 4, 2008) at 1 (Sen. Bond June 4, 2008 Ex Parte).
409 Reps. Dingell and Markey May 1, 2008 Ex Parte at 2; Sen. Bond June 4, 2008 Ex Parte at 1.
410 Reps. Dingell and Markey May 1, 2008 Ex Parte at 2.
411 iBiquity is the developer and licenser of HD Radio technology, which is transforming AM and FM broadcasting 
with vastly increased number of channels, drastically improved sound quality and an array of new data services. 
iBiquity, http://www.ibiquity.com/index.php.  We note that in 2002, the Commission formally selected IBOC 
technology developed by iBiquity as the technical format that will permit AM and FM radio broadcasters to 
introduce digital operations efficiently and rapidly.  See Digital Audio Broadcasting Systems and Their Impact on 
the Terrestrial Radio Broadcast Service, First Report and Order, 17 FCC Rcd 19990, 19990  1 (2002) (DAB First 
Report).
412 Letter from Robert A. Mazer, Vinson & Elkins, Counsel for iBiquity, to Marlene H. Dortch, Secretary, FCC at 1 
(May 1, 2008) (iBiquity May 1, 2008 Ex Parte).  
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support the HD Radio condition.413 iBiquity argues that HD Radio compatibility is necessary because 
post merger, the merged entity will be in a stronger position to restrict iBiquitys sale of HD Radio 
receivers and because it will have more cash to fund subsidies and incentives that could prevent the 
growth of the HD Radio technology.414 For original equipment manufacture (OEM) receivers, iBiquity 
proposes that the condition become effective within three years, and for all other satellite receivers, within 
one year.415 Applicants object to iBiquitys proposed condition as an unnecessary intrusion on their 
business plans.  In addition, Applicants argue that it will harm satellite radios ability to compete in the 
audio entertainment market.416 Pioneer also opposes iBiquitys proposal, explaining that it would limit 
  
413 Sens. Kerry, Cardin, and McCaskill June 27, 2008 Ex Parte; Letter from U.S. Reps. Betty McCollum, Collin 
Peterson, Timothy Walz, James Oberstar, and Keith Ellison, to Kevin J. Martin, Chairman, FCC (June 27, 2008) 
(Reps. McCollum, Peterson, Walz, Obertar, and Ellison June 27, 2008 Ex Parte); Atty Gens. May 8, 2008 Ex 
Parte at 2; Rep. Markey July 15, 2008 Ex Parte at 1-2; Letter from U.S. Sen. Ted Stevens, to Kevin J. Martin, 
Chairman, FCC (July 15, 2008); Letter from U.S. Rep. Baron P. Hill, to Kevin J. Martin, Chairman, FCC (July 21, 
2008); NPR Petition at 20-21.  NPR suggests that the condition could encourage HD Radio deployment and 
consumer access to the technology, and may mitigate the merged entitys ability to increase prices or reduce the 
quality of service.  Id.  New ICO Satellite Services G.P. (ICO), the developer of an advanced hybrid service 
capable of providing wireless voice, data, video, and Internet services on mobile and portable devices, also requests 
that the Commission impose a condition prohibiting the merged entity from entering into exclusive agreements with 
automobile manufacturers that have the effect of limiting the ability of other entities to provide competitive 
products or services.  New ICO Comments at 2.  Similarly, Slacker, Inc., which is developing a nationwide 
personal audio service, also requests that the Commission prohibit all current or future exclusive contracts between 
SDARS and car manufacturers.   Slacker Comments at 3.  As discussed herein, Applicants have agreed to not take 
any action that would prevent the inclusion of other audio technology in SDARS receivers, which resolves New 
ICOs and Slackers concerns.  Slacker also requests that the Commission prohibit car manufacturers from sitting on 
the board of directors of the merged entity.  Id.  We believe that Applicants voluntary commitments resolve 
Slackers primary concerns, and thus, we do not find it necessary to regulate the selection of board members for the
merged entity.
414 Letter from Robert A. Mazer, Vinson & Elkins, Counsel for iBiquity, to Marlene H. Dortch, Secretary, FCC 
(Dec. 20, 2007) at 1; Letter from Robert A. Mazer, Vinson & Elkins, Counsel for iBiquity, to Marlene H. Dortch, 
Secretary, FCC (Mar. 20, 2008) at 1; Letter from Robert A. Mazer, Vinson & Elkins, Counsel for iBiquity, to 
Marlene H. Dortch, Secretary, FCC (June 9, 2008) at 2.  The HD Digital Radio Alliance agrees, explaining that the 
availability of HD Radio as a factory installed or factory authorized option in automobiles and other vehicles is very 
limited.  Letter from Charles E. Biggio, Wilson Sonsini Goodrich & Rosati, Counsel for the HD Radio Alliance, to 
Marlene H. Dortch, Secretary, FCC (Jan. 24, 2008) at 2.
415 iBiquity May 1, 2008 Ex Parte at 1.  iBiquity also requests that the Commission require the merged entity to 
annually certify its compliance with the condition.  Id.  Earlier in this proceeding, iBiquity also proposed that the 
Commission require the merged entity to terminate all exclusive arrangements and, prospectively, that the 
Commission prohibit exclusive arrangements with suppliers, retailers, and vehicle manufacturers that could preclude 
the inclusion of HD Radio technology.  Letter from Robert A. Mazer, Vinson & Elkins, Counsel for iBiquity, to 
Marlene H. Dortch, Secretary, FCC at 2 (Dec. 20, 2007) (iBiquity Dec. 20, 2007 Ex Parte).  iBiquity reconsidered 
its position, however, stating that it does not believe that simply banning exclusive arrangements would ensure HD 
Radio technology would be included in SDARS receivers or would provide for a competitive landscape for 
terrestrial and satellite radio services.  iBiquity May 1, 2008 Ex Parte at 2; iBiquity Jun. 9, 2008 Ex Parte at 1. 
iBiquity explains that its concern is focused not on formal contractual arrangements, but on existing business 
arrangements favoring satellite companies.  Id.  iBiquity argues that the merged entity would have greater leverage 
to use these business relationships to disadvantage terrestrial digital radio.  iBiquity May 1, 2008 Ex Parte at 2.  
iBiquity also does not support USEs open device proposal, arguing that it would not effectively ensure the 
distribution of HD Radio receivers to create a level playing field.  Letter from Robert A. Mazer, Vinson & Elkins, 
Counsel for iBiquity, to Marlene H. Dortch, Secretary, FCC at 1 (June 6, 2008); iBiquity June. 9, 2008 Ex Parte at 1, 
2.
416 Joint Opposition at 101, n.358.
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the breadth of radio product offerings to consumers, limit which radio component suppliers products be 
designed into radios, have the effect of decreasing AM/FM tuning performance, unnecessarily increase 
costs to consumers uninterested in HD Radio and interfere with the useful and healthy free market 
mechanisms extant in radio electronics purchases.417 Pioneer also argues that iBiquitys proposed phase-
in periods do not provide sufficient time for typical design cycles for either retail or OEM receivers.  
Pioneer states that design cycles for retail equipment last from 18 to 24 months and OEM design cycles 
last significantly longer than the three years suggested by iBiquity.418
128. In response to the concerns raised by commenters, Applicants have voluntarily 
committed to comply with certain open access conditions.419 First, the merged entity, immediately after 
consummation of the merger, will permit any device manufacturer to develop equipment that can deliver
the combined entitys satellite radio service.  Device manufacturers also must be permitted to incorporate 
in satellite radio receivers any other technology that would not result in harmful interference with the 
merged entitys network, including HD Radio technology, iPod ports, Internet connectivity, or other 
technology.  This principle of openness would serve to promote competition, protect consumers, and spur 
technological innovation.  In addition, we believe that it is not enough simply to require the open 
development of satellite radio devices.  To ensure that consumers have unfettered access to these devices, 
we will prohibit the merged entity from preventing such devices, and any features such devices might 
contain, from reaching consumers, through exclusive contracts or otherwise.  We find that it would be 
contrary to the public interest, for example, to permit the merged entity to bar HD Radio chips or iPod 
compatibility from inclusion in a manufacturers satellite radio device, whether that device is freestanding 
or installed in an automobile.  Applicants shall provide, on commercially reasonable terms, the 
intellectual property to permit any device manufacturer to develop equipment that can deliver the merged 
entitys satellite radio service.  The encryption, conditional access, and security technology is embedded 
in chip sets that can be purchased from third party manufacturers.
129. We conclude that Applicants voluntary commitments and other conditions address many 
of the commenters concerns. 420 As we discussed in Section IV.B.2., the merger may provide the merged 
  
417 Letter from Adam Goldberg, Vice President, Gov. and Indus. Affairs, Pioneer North America, Inc., to Marlene 
H. Dortch, Secretary, FCC (May 28, 2008);  See also Letter from Adam Goldberg, Vice Pres., Gov. and Indus. 
Affairs, Pioneer North America, Inc., to Marlene H. Dortch, Secretary, FCC at 2 (June 6, 2008) (Pioneer Jun. 6, 
2008 Ex Parte).   
418 Pioneer Jun. 6, 2008 Ex Parte at 1; see also Letter from Richard M. Lee, Exec. Dir., Satellite Radio Servs., 
General Motors Corp. and David W. Danzer, Grp. Vice Pres., Strategic and Product Planning, Toyota Motor Sales, 
USA, Inc., to Marlene H. Dortch, Secretary, FCC (July 10, 2008) at 1-2 (opposing an HD Radio mandate because no 
agreements between XM and the automobile manufacturers currently prohibit their ability to offer HD Radio and 
any mandate to do so would distort the normal incentives to cost reduce and improve the HD Radio product). 
419 Applicants June 13, 2008 Ex Parte at 3; Applicants July 25, 2008 Ex Parte at 2,3.
420 See Letter from Donald W. Riegle, Jr., Chairman, Govt Relations, APCO Worldwide, to Kevin J. Martin, 
Chairman; Michael Copps, Commissioner; Jonathan Adelstein, Commissioner; Deborah Tate, Commissioner; and 
Robert McDowell, Commissioner, FCC (June 19, 2008); Letter from Charles H. Helein, Helein & Marashlian, LLC, 
Counsel for USE, to Marlene H. Dortch, Secretary, FCC (June 25, 2005).  APCO and USE claim that Applicants 
open access voluntary commitments are inadequate to promote competition or to spur technological innovation.  For 
instance, they object to the right of the merged entity to require licensees to comply with its technical and quality 
assurance standards and tests, claiming that such in-house test will allow the merged entity to pick and choose 
among manufacturers based on its own standards, without oversight.  APCO and USE ask that the Commission 
impose an open access condition immediately following approval of the merger, require independent certification 
testing and monitoring of compliance, prohibit the merged entity from setting prices for receivers, and prohibit it 
from manufacturing, selling, leasing, or distributing receivers; see also Sens. Kerry, Cardin, and McCaskill June 27, 
2008 Ex Parte at 2 (seeking enforcement of the open access commitment); Letter from Gigi B. Sohn, President, 
(continued.)
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entity with the ability and incentive to contract with fewer manufacturers to save on subsidies or other 
development and distribution costs.  Such action would potentially reduce consumer choice for SDARS 
receivers and diminish current features or future innovations.  Pursuant to Applicants voluntary 
commitment, the merged entity will offer additional entities the option to license the intellectual property 
rights necessary to design and develop SDARS equipment.  In addition to bringing more choices of 
receivers directly to consumers, this voluntary commitment may allow additional parties to directly 
negotiate with automobile makers, ultimately to the benefit of consumers.  Given Applicants open access 
voluntary commitment to allow additional parties to develop and design SDARS equipment and not to bar 
the inclusion of audio technology, including HD Radio technology, we conclude that discrimination by 
the merged entity is not likely to cause a public interest harm that warrants the imposition of additional 
conditions.
130. Though we are unpersuaded a case has been presented on this record of a merger-specific 
harm to HD Radio not remedied by the voluntary commitments and other conditions, we do believe 
important questions have been raised that warrant further examination in a separate proceeding.  To this 
end, the Commission commits to initiating a notice of inquiry within 30 days from the adoption date of 
this Order to gather more information on issues including, but not limited to:  
 Whether HD Radio chips or any other audio technology should be included in all satellite radio 
receivers;
 Whether satellite radio capability or any other audio technology should be included in all HD 
Radio receivers;
 The cost to auto manufacturers of including HD Radio chips;
 The cost to radio manufacturers of including HD Radio chips;
 Consumer demand for HD radio;
 The amount and type of programming available on HD Radio today, and that projected to be 
available over the next 3 years; and 
 Whether the FCC has jurisdiction to mandate inclusion of HD Radio, satellite radio, or other 
audio technology.
While we do not adopt iBiquitys proposed condition in this Order, we note that our actions today do not 
diminish our commitment to the HD Radio technology.  We continue to believe that HD Radio is an 
important technological development that enables terrestrial radio stations to deliver better audio fidelity, 
more robust transmission systems, and the possibility of new auxiliary services.421
5. Third-Party Access to SDARS Capacity 
131. Overview.  Several commenters propose that the merger be conditioned on Applicants 
leasing a certain amount of their channel capacity to non-affiliated programmers.422 The proposals 
(Continued from previous page)    
Public Knowledge, to Marlene H. Dortch, Secretary, FCC (July 15, 2008) at 1 (seeking a 60-day time period for 
Applicants to comply with voluntary commitments, running from approval of the Application); Letter from Robert 
A. Mazer, Vinson & Elkins, Counsel for iBiquity, to Marlene H. Dortch, Secretary, FCC (July 25, 2008). We find 
that Applicants voluntary commitments address our concerns.
421 See DAB First Report, 17 FCC Rcd at 19991  3.  Throughout the proceeding, the Commission articulated its 
objective to foster the development of a vibrant terrestrial digital radio service for the public and to ensure that 
radio stations successfully implement DAB.  DAB Second Report, 22 FCC Rcd at 10346  2.  See Letter from Anne 
Lucey, Sen. Vice Pres. for Reg. Policy, CBS Corp., to Marlene H. Dortch, Secretary, FCC (July 24, 2008) (urging 
the Commission to initiate a rulemaking on access to HD Radio technology).  
422 See Prometheus Comments at 5;  Letter from Parul Desai, Media Access Project, Counsel for Prometheus, to 
Marlene H. Dortch, Secretary, FCC (Mar. 27, 2008) at 1 (Prometheus Mar. 27, 2008 Ex Parte); TAP Petition at 7; 
(continued.)
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advanced by the commenters include two related, but functionally distinct, mechanisms for permitting 
third parties to access to the SDARS system.  Some commenters recommend adopting a mechanism 
similar to the Commissions cable leased access regulations,423 while others propose a system akin to the 
Open Video System (OVS) whereby a certain percentage of the total system capacity would be leased 
on a long-term basis to a third party.  Although Applicants have asserted that such conditions are 
unnecessary,424 they have voluntarily committed to enter into long-term leases with one or more third 
parties for use of a percentage of the combined entitys capacity.425 We find that Applicants voluntary 
commitment to provide such leases directly serves the public interest and will further the Commissions 
goals of fostering competition and diversity on the SDARS platform.  
132. Leased Capacity to Single Entity.  Georgetown Partners, LLC (Georgetown) proposes a 
long-term capacity leasing mechanism somewhat similar in function to the Commissions rules governing 
Open Video Systems in the multichannel video programming distribution (MVPD) context.426  
Georgetown proposes that the Commission condition the grant of the merger on Applicants leasing at 
least 20 percent of the merged entities total licensed bandwidth capacity, as measured in megahertz,  
on an exclusive basis to an entity that is totally independent of and unaffiliated with Sirius or XM.427  
Such a condition, Georgetown argues, would provide alternative access to satellite radio and counteract 
the merged entitys monopoly over the SDARS service.428 Georgetown would require that the lease be 
consummated before the merger closes, would require the lease term to be coterminous with Applicants 
FCC licenses, and would require certain other conditions to ensure the quality of the lessees service on 
Applicants system.429 The proposed service would compete with that of Applicants by offering 
advertising-supported programming available to any consumer with a satellite radio receiver at no cost, 
regardless of whether the listener is a subscriber to Applicants service.430 The terms of the lease, under 
Georgetowns plan, would be privately negotiated between Applicants and the lessee and would be 
(Continued from previous page)    
Entravision Comments at 22; Letter from Chester C. Davenport, Managing Dir., Georgetown, to Marlene H. Dortch, 
Secretary, FCC (Oct. 18, 2007) at 3-5 (Georgetown Oct. 18, 2007 Ex Parte); Letter from David R. Siddall, Paul 
Hastings, Counsel for Georgetown, to Kevin J. Martin, Chairman; Michael Copps, Commissioner; Jonathan 
Adelstein, Commissioner; Deborah Tate, Commissioner; and Robert McDowell, Commissioner, FCC (Nov. 20, 
2007) at 6-7 (Georgetown Nov. 20, 2007 Ex Parte).
423 See 47 C.F.R.  76.970-977; see also Communications Act,  612 (47 U.S.C.  532).
424 Letter from Robert L. Pettit, Wiley Rein LLP, Counsel for Sirius, to Kevin J. Martin, Chairman; Michael Copps, 
Commissioner; Jonathan Adelstein, Commissioner; Deborah Tate, Commissioner; and Robert McDowell, 
Commissioner, FCC (Nov. 13, 2007), Att. Joint Ex Parte Submission at 11-13 (Applicants Nov. 13, 2007 Ex 
Parte); Joint Opposition at 100.
425 Applicants June 13, 2008 Ex Parte at 3.
426 See 47 C.F.R.  76.1500, et. seq.  Under the Commissions rules, OVS operators are required to open access to a 
percentage of the system capacity for use by non-affiliated third parties for competing OVS services.  47 C.F.R.       
 76.1503. 
427 Letter from David R. Siddall, Paul Hastings and Andrew G. Berg, Sonnenschein Nath & Rosenthal, LLP, 
Counsel for Georgetown, to Marlene H. Dortch, Secretary, FCC (Mar. 17, 2008) at 2 (Georgetown Mar. 17, 2008 
Ex Parte); see also Letter from David R. Siddall, Sonnenschein Nath & Rosenthal LLP, Counsel for Georgetown 
Partners, to Marlene H. Dortch, Secretary, FCC (July 10, 2008) (claiming that Sirius allocation of capacity to the 
Backseat TV service demonstrates that the merged firm could allocate 20 percent of its capacity for this purpose) 
(Georgetown July 10, 2008 Ex Parte); see also n.499, infra.   
428 Georgetown Mar. 17, 2008 Ex Parte at 3.
429 Id. at 2.
430 Id.
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submitted to the DOJ and the Commission for approval.431 Finally, should it be the lessee, Georgetown 
commits to complying with the Commissions indecency provisions as applied to broadcasters.432  
Other commenters filed in support of a third-party leased access condition.433
133. Leased Access Model.  Prometheus and Entravision each propose that the Commission 
apply a leased access regime patterned after the system used in cable television.  Prometheus does not 
provide specific mechanisms for implementing leased access, but rather advocates generally that 
Applicants be required to provide a reasonable amount of capacity at true market rates for commercial 
programming, over which [Applicants] would not exercise any editorial control.434 Such a system would 
offer to those who feel that satellite service is the preferred programming platform an opportunity to 
make use of it.435 Applicants originally opposed the third-party leased access proposals advanced by 
Prometheus and Entravision and argued that they are counter to the public interest.436
134. Discussion.  Though Applicants originally opposed the third-party access proposals 
described above, Applicants submitted a voluntary commitment to enter into long-term leases or other 
agreements to provide a Qualified Entity437 or Entities rights to 4 percent of the full-time audio channels 
on the Sirius platform and on the XM platform, respectively (which currently represents six channels on 
the Sirius platform and six channels on the XM platform), and to enter into such leases within four 
  
431 Id. at 2-3.  We note that its request for DOJ approval of leases is moot considering that the DOJ closed its 
investigation of the transaction without further action.  See Mar. 24, 2008 DOJ Press Release.
432 Georgetown Mar. 17, 2008 Ex Parte at 2.  Georgetown has also agreed to facilitate the distribution of additional 
leased channel capacity dedicated to non-commercial and educational use, as advanced by MAP and Public 
Knowledge.  Letter from Chester Davenport, Managing Dir., Georgetown, to Kevin J. Martin, Chairman, FCC (May 
13, 2008) at 1-2 (Georgetown May 13, 2008 Ex Parte); see also Letter from Andrew J. Schwartzman and Parul 
Desai, MAP, and Gigi B. Sohn, Public Knowledge (May 14, 2008) (concurring with Georgetowns May 13, 2008 
proposal).  See also Section VI.B.6, infra.  Georgetown commits to work with MAP, PK, and other appropriate 
parties to establish a structure suitable for selection among eligible programmer applicants if more apply than the 
FCC designated capacity for educational non-commercial channels can accommodate and, at Georgetowns 
expense, accept delivery of the non-commercial leased program streams, encode the programming, and deliver it to 
the merged entity for broadcast.  See Georgetown May 13, 2008 Ex Parte at 2.
433 See TAP Petition at 7 (stating Applicants might be required to convey control over some portion of its 
bandwidth  such as one quarter (6.25 MHz)  and to provide an independent minority competitive provider carriage 
services.); see also Letter from U.S. Rep. Sanford D. Bishop, Jr., to Kevin J. Martin, Chairman, FCC (Nov. 7, 
2007) at 1; Letter from U.S. Rep. Edolphus Ed Towns, to Kevin J. Martin, Chairman, FCC (May 5, 2008) at 1;  
Letter from U.S. Rep. Bobby L. Rush, to Kevin J. Martin, Chairman, FCC (May 6, 2008) at 1; Letter from State 
Atty Gens. Douglas F. Gansler (Maryland), Richard Blumenthal (Connecticut), Marc Dann (Ohio), and Rob
McKenna (Washington), to Kevin J. Martin, Chairman, FCC (Apr. 24, 2008) at 2; Letter from U.S. Rep. G. K. 
Butterfield, to Kevin J. Martin, Chairman, FCC (Apr. 15, 2008) at 1; Letter from  U.S. Reps. Albert R. Wynn, Lacy 
Clay, G.K. Butterfield, Elijah Cummings, Bennie Thompson, and David Scott, to Kevin J. Martin, Chairman, FCC 
(Nov. 9, 2007) at 1-2; Letter from U.S. Rep. Corinne Brown, to Kevin J. Martin, Chairman, FCC (Nov. 9, 2007) at 
1;  Letter from U.S. Rep. Gregory W. Meeks, to Kevin J. Martin, Chairman, FCC (May 19, 2008) at 1.
434 Prometheus Comments at 5.  Prometheus also states its preference to lease channels on a per channel basis, where 
the combined entity would hold an auction to allocate the channels, and that the FCC separately license the leasees 
and treat the service as a broadcast service.  Prometheus Mar. 27, 2008 Ex Parte at 1.  
435 Entravision Comments at 22.
436 Joint Opposition at 100.
437 A Qualified Entity includes any entity that is majority-owned by persons who are African American, not of 
Hispanic origin; Asian or Pacific Islanders; American Indians or Alaskan Natives; or Hispanics.
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months of the consummation of the merger.438 Applicants further voluntarily commit that, as digital 
compression technology enables the combined company to broadcast additional full-time audio channels, 
the combined company will ensure that 4 percent of full-time audio channels on the Sirius platform and 
the XM platform are reserved for a Qualified Entity or Entities, provided that in no event will the 
combined company reserve fewer than six channels on the Sirius platform and six channels on the XM 
platform.439 The Qualified Entity or Entities will not be required to make any lease payments for such 
channels, and the combined company will not be involved in the selection of the Qualified Entity or 
Entities.440 The combined company will have no editorial control over these channels.441
135. We find that Applicants voluntary commitment to provide leased channel capacity to 
other programmers addresses the concerns voiced by Media Access Project, Public Knowledge, and 
others who contend that the consolidation of the SDARS service to a single provider will harm 
programming diversity.442 We further find that Applicants voluntary commitment is consistent with the 
Commissions stated goals to promote diversity as described in the recently adopted Diversity Order, 
which took steps to promote diversity in the broadcasting context and solicited comment on additional 
  
438 Applicants June 13, 2008 Ex Parte at 3. 
439 Id.
440 Id.
441 Id.  
442 See Letter from Andrew J. Schwartzman, MAP, to Marlene H. Dortch, Secretary, FCC  (June 18, 2008) at 1 
(stating that MAP and Public Knowledge prefer that an independent party select unaffiliated minority programmers, 
and that the percent of channels to be set aside should be based on a percentage of channel capacity, and not on a 
percentage of live channels); Letter from William H. Kling, Pres. and CEO, American Public Media, to Kevin J. 
Martin, Chairman, FCC (June 20, 2008) at 2 (advocating that Applicants set aside 25 percent of total SDARS 
spectrum for non-commercial public service channels, minority broadcasters, and emergency services) (APM June 
20, 2008 Ex Parte); Letter from David R. Siddall, Sonnenschein Nath & Rosenthal LLP, Counsel for Georgetown 
Partners, to Marlene H. Dortch, Secretary, FCC (June 27, 2008) at 1-2 (stating that Georgetown Partners, 
Entravision, and TSG Capital Group are not interested in providing programming and facilities with only 4 percent 
of channels offered for commercial leased access, and that an advertiser-supported service available to all owners of 
SDARS receivers would be preferred); Sens. Kerry, Cardin, and McCaskill June 27, 2008 Ex Parte at 1-2 (arguing 
that setting aside 4 percent is inadequate to ensure a viable competitor, and instead suggesting that leasing 20 
percent to 50 percent is necessary, along with a transparent and competitive process for the leasing arrangement); 
Letter from U.S. Sen. Amy Klobuchar, to Kevin J. Martin, Chairman, FCC (June 27, 2008) (urging the Commission 
to require Applicants to set aside more than 8 percent of channels); Reps. McCollum, Peterson, Walz, Obestar, and 
Ellison June 27, 2008 Ex Parte at 1 (advocating 25 percent set-aside of total SDARS spectrum for non-commercial 
public service channels, minority broadcasters, and emergency services); Letter from Gigi B. Sohn, President, Public 
Knowledge and Andrew Jay Schwartzman, President and CEO, MAP, to Kevin J. Martin, Chairman, FCC (July 10, 
2008) at 5 (proposing that the Commission appoint an independent Monitor Trustee to oversee enforcement of 
voluntary commitments); Letter from Albert H. Kramer, Dickstein Shapiro LLP, Counsel for The Word Network, to 
Marlene H. Dortch, Secretary, FCC (July 11, 2008) at 1 (proposing that Qualified Entities include not-for-profit 
entities offering programming designed to respond to the minority community) (The Word Network July 11, 2008 
Ex Parte); Rep. Markey July 15, 2008 Ex Parte at 2 (recommending that the set aside be based on total capacity 
rather than specifying a set number of channels so that advances in digital capacity and service offerings do not 
diminish the impact of the set-aside limit); Letter from U.S. Rep. G.K. Butterfield, to Kevin J. Martin, Chairman, 
FCC (July 21, 2008) (supporting a 15 percent set aside for minority controlled programming); Letter from U.S. Rep. 
Bennie G. Thompson, to Kevin J. Martin, Chairman, FCC (July 22, 2008); Letter from U.S. Rep. Yvette D. Clarke, 
to Kevin J. Martin, Chairman, FCC (July 23, 2008); Letter from U.S. Rep. Elijah E. Cummings, to Kevin J. Martin, 
Chairman, FCC (July 23, 2008).
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ways to increase minority involvement in the communications industry.443 Commenters have raised 
concerns, however, about the mechanics of the channel lease administration and allocation.444 We will 
determine the implementation details for use of these channels at a later date.      
6. Reservation of Channels for Noncommercial Educational Use 
136. Public Knowledge and Prometheus argue that if the Commission determines that the 
merger is in the public interest, the merged entity should be required to reserve a percentage of channel 
capacity for noncommercial educational or informational programming.445 The commenters suggest that 
the Commission use the Direct Broadcast Satellite (DBS) public interest obligations446 as a model for 
implementation of the same obligations for SDARS.  Applicants have committed to voluntarily make 
capacity available for this purpose.447 We find that Applicants voluntary commitment will help maintain 
a platform for diverse voices post-merger and, as a result, we find that it serves the public interest.
137. Proposals by Commenters. Prometheus and Public Knowledge each propose that the 
merger, if approved, be subject to a condition that a certain percentage of the merged entitys channel 
  
443 Promoting Diversification of Ownership in the Broadcasting Services, Report and Order and Third Further 
Notice of Proposed Rulemaking, 23 FCC Rcd 5922 (2008).
444 See, e.g., Sens. Kerry, Cardin, and McCaskill June 27, 2008 Ex Parte at 1-2 (arguing for the creation of a 
transparent and competitive process for the leasing arrangement); Letter from Andrew J. Schwartzman, MAP, to 
Marlene H. Dortch, Secretary, FCC (June 18, 2008) at 1 (expressing preference that an independent party select 
unaffiliated minority programmers); Letter from Gigi B. Sohn, President, Public Knowledge and Andrew Jay 
Schwartzman, President and CEO, MAP, to Kevin J. Martin, Chairman, FCC (July 10, 2008) at 5 (proposing that 
the Commission appoint an independent Monitor Trustee to oversee enforcement of voluntary commitments); The 
Word Network July 11, 2008 Ex Parte at 1 (discussing the need for an entity independent of Applicants to 
administer the allocation of channels for minority programmers); Letter from Jose Luis Rodriguez, CEO, HITN, to 
Kevin J. Martin, Chairman, FCC (July 11, 2008) (advocating that the minority set-aside be reserved for stations 
managed and controlled by minority members); Letter from Jeneba Jalloh Ghatt, Counsel to AlphaStar, to Kevin J. 
Martin, Chairman, FCC (Jul. 16, 2008) at 1 (advocating that an independent entity administer leased capacity);
Letter from U.S. Reps. Charles Gonzalez, Hilda Solis, Ed Towns, and Bobby Rush, to Kevin J. Martin, Chairman, 
FCC (July 18, 2008) (proposing that if a financial institution is selected to oversee leasing commitments, then the 
Commission should ensure that the entity has a proven history of and experience with minority lending and 
business operations, and that it has no financial interest in the selection process.  They also urge the Commission to 
provide potential lessees with adequate time to develop business plans and raise capital and recommend that the 
Commission prohibit the merged entity from dropping existing minority programming channels in order to allocate 
channels for new minority-owned channels).
445 Public Knowledge proposes that the merged entity reserve 5 percent of channel capacity and Prometheus 
proposes a 4 percent reservation.  Public Knowledge Comments at 2; Letter from Gigi B. Sohn, Pres., Public 
Knowledge, to Marlene H. Dortch, Secretary, FCC (Feb. 20, 2008), Att., Memorandum Regarding Set Aside 
Conditions at 1-2 (Feb. 20, 2008 Ex Parte Letter); Prometheus Comments at 5.
446 See 47 C.F.R.  25.701.
447 Applicants June 13, 2008 Ex Parte at 3.  The Applicants June 13, 2008 Ex Parte setting forth the Applicants 
voluntary commitments states that this capacity will be made available for programming within the meaning of 47 
C.F.R.  25.701(f)(2) of the DBS set aside rules.  Id.  We note that the cited definition defines a Qualified 
Programmer but does not define or describe specifically the programming that will be provided.  Consistent with 
our approach in the DBS context, therefore, we interpret the Applicants voluntary commitment to mean that 
Applicants will make available capacity to programmers that satisfy the definitions contained within 47 C.F.R.         
 25.701(f)(2).   
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capacity be reserved for noncommercial educational programming.448 Public Knowledge proposes the 
following four requirements to implement an SDARS noncommercial channel reservation requirement.  
First, similar to the DBS rule, Public Knowledge asserts that the merged company should allocate only 
one channel per qualified programmer unless all other requests for access have been granted in order to 
increase program diversity.449 It also argues that any noncommercial channels already carried by SDARS 
should not count toward the reservation requirement and that qualifying programmers currently on either 
service should not be eligible for reserved channels.450 Second, Public Knowledge proposes that all 
subscribers of the merged company should get access to all of the noncommercial programming on the 
reserved channels at no additional charge.  Public Knowledge clarifies its proposal to mean that the 5 
percent reservation should be based on the entire service offering and not on a reduced package that might 
be offered on an a la carte basis.451 Third, as in the DBS context, the merged entity should not exercise 
any editorial control over the noncommercial programming, although it may select from among qualified 
applicants when demand exceeds capacity.  Fourth, only national and local educational programming 
suppliers would be eligible for carriage on the reserved channels.  Although in the DBS rules only 
national programmers are eligible, Public Knowledge urges the Commission to expand eligibility to local 
noncommercial entities.  It states that this would permit low power radio stations and other local entities 
to have access to satellite radio audiences which Public Knowledge claims would in turn further the 
Commissions goal of promoting localism.
138. Applicants initially opposed the imposition of public interest obligations, asserting that 
their services provide[] a tremendous range of public interest and educational content . . . because such 
programming is attractive to consumers.452
139. Background: Public Interest Obligations in The SDARS and DBS Contexts. When the 
Commission adopted licensing and service rules for SDARS in 1997, it considered imposing public 
interest obligations on the licensees.453 Commenters in the proceeding cautioned against impeding the 
introduction of a new service with rapidly changing technology.454 The Commission concluded that 
SDARS licensees should be subject to Equal Employment Opportunity requirements as well as certain 
political broadcasting rules.455 The Commission declined, however, to impose additional public interest 
programming obligations on SDARS, but reserved the right to do so at a later date, [i]f additional public 
interest obligations are found to be warranted.456 This included a specific reservation of a future right to 
adopt rules similar to those Congress enacted for DBS providers, including a 4-7 percent set-aside of 
  
448 Prometheus Comments at 5; Letter from Alex Curtis, Dir. of Policy, New Media, Public Knowledge to Marlene 
H. Dortch, Secretary, FCC (Dec. 7, 2007) at 1-2; APM June 20, 2008 Ex Parte at 1-2 (seeking a reservation of 25 
percent of the combined entitys radio spectrum).
449 Public Knowledge Feb. 20, 2008 Ex Parte, Att. at 1-2.
450 Id. at 2.
451 For example, under a 5 percent reservation, if the merged company offers 200 channels, each subscriber would 
receive 10 channels of noncommercial programming regardless of his or her particular subscription package.  Public 
Knowledge Feb. 20, 2008 Ex Parte, Att. at 2; Public Knowledge June 18, 2008 Ex Parte at 1.
452 Joint Opposition at 101-02.
453 1997 SDARS Service Rules Order, 12 FCC Rcd at 5789-92  85-93.
454 Id. at 5789-90  86-89.
455 Id. at 5792  92.
456 Id. at 5792  93.
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capacity for noncommercial educational and informational programming.457
140. Applicants voluntary commitment to make capacity available for noncommercial 
educational and informational programming is similar to the DBS public interest rules.458 These rules 
were mandated by the Cable Television Consumer Protection and Competition Act of 1992 (1992 Cable 
Act),459 which directed the Commission to impose public interest obligations on DBS providers, 
including a requirement to reserve a percentage, between 4 and 7 percent, of channel capacity for 
noncommercial educational or informational programming.460 In implementing this statutory mandate, 
the Commission adopted a 4 percent reservation requirement461 and elaborated on the definition of entities 
qualified to be carried on the reserved channels.462 We concluded that in order to qualify for carriage, an 
entity must be noncommercial with an educational mission.463
141. Discussion. We find that Applicants voluntary commitment to set aside 4 percent of 
their capacity for NCE programming mitigates the potential harm to program diversity and is consistent 
with the Commissions expectation, first stated in 1997, that diverse public interest programming would 
be available on the SDARS platform.  Eleven years ago, when the Commission considered whether to 
impose such conditions on the nascent SDARS service, the Commission was persuaded by the parties 
argument that public interest programming obligations [were] not necessary to ensure diverse public 
oriented programming because the economic and distribution structure of satellite DARS makes it good 
business to offer programming that regular broadcasters would not offer absent incentives.464 At that 
time, the Commission agreed that market forces produced by the robust competition between two SDARS 
competitors would ensure that listeners would receive noncommercial educational and public interest 
programming on the SDARS service.  In the absence of such competitive forces post-merger, we find the 
potential harm to programming diversity greater than was the case in 1997.
142. Applicants have voluntarily committed to set aside 4 percent of the full-time audio 
channels for noncommercial educational and informational programming on both Siriuss and XMs 
current systems, a figure that currently represents six channels on each platform.465 We accept 
Applicants voluntary commitment.  We find that this commitment addresses commenters concerns and 
will promote diversity.  To ensure that the commitment is implemented in a fair and efficient manner, we 
adopt additional requirements based on regulations implementing the DBS public interest requirement.466
We are aware that attractive programming is not necessarily the same as profitable programming, 
particularly where it concerns programming of an educational and informational nature.  While we 
  
457 Id. (citing 47 U.S.C.  335).
458 47 C.F.R.  25.701.
459 See Cable Television Consumer Protection and Competition Act of 1992 (1992 Cable Act), Pub. L. No. 102-
385, 106 Stat. 1460 (1992) (codified at 47 U.S.C.  335).
460 See 47 U.S.C.  335(b)(1).  
461 See Implementation of Section 25 of the Cable Television and Consumer Protection Act of 1992, Direct 
Broadcast Satellite Public Interest Obligations, Report and Order, 13 FCC Rcd 23254, 23285  74 (1998) (DBS PI 
Order).
462 See DBS PI Order, 13 FCC Rcd at 23286-92  76-90.  See also 47 C.F.R.  25.701(f)(2).
463 DBS PI Order, 13 FCC Rcd at 23290  86.
464 SDARS Service Rules Order, 12 FCC Rcd at 5789  86 (citing comments filed by Digital Satellite Broadcasting 
Corp. and American Mobile Radio Corp).
465 Applicants June 13, 2008 Ex Parte at 3.
466 47 C.F.R.  25.701(f).
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acknowledge and expect that the merged company must behave in a profit-maximizing manner in order to 
operate as a successful commercial enterprise, we have a counterbalancing obligation to protect the 
publics interest in diverse programming choices.  Accordingly, we find that the proposed set-asides are 
justified in order to balance the risk of harm to programming diversity and the amount and quality of 
noncommercial educational and informative public programming available via SDARS post-merger.467  
In addition, we find that the burden on the merged company as a result of this voluntary commitment will 
not prohibit the merged entity from realizing the benefits of the merger.  Moreover, Applicants state in 
their pleadings that the merged company will eliminate a number of channels that offer substantially 
duplicative programming in order to free up channel capacity for other formats and services.468 We 
expect that the consolidation of Applicants merged channel offerings in this way will free a significant 
amount of capacity, a small portion of which can be reallocated for noncommercial services pursuant to 
Applicants voluntary commitment.
143. As the Commission did in the context of imposing public interest obligations on DBS 
providers, we limit the number of channels that can be initially allocated to a single noncommercial 
programmer.469 In adopting the DBS rules, the Commission was concerned that access to noncommercial 
channels not be dominated by a few national educational program suppliers and concluded that limiting 
the capacity for any one programmer will increase the development of quality educational and 
informational programming for carriage on the set aside channels.470 The Commission also found that the 
limitation would provide an opportunity for carriage of programming that might not otherwise be 
available, including programming targeting traditionally underserved audiences.471 We believe that these 
same concerns hold true for the merged entity.  Accordingly, the merged entity will not be permitted to 
initially select a qualified programmer to be carried on more than one of its reserved channels.  After all 
qualified entities seeking access to the reserved channels have been offered carriage, the merged entity 
may allocate an additional channel to a programmer without having to make further efforts to find other 
qualified programmers to fill the NCE set-aside channels.
144. In determining how many channels must be made available at any point in time in 
fulfillment of Applicants commitment to set aside 4 percent of their full-time audio channels for this 
purpose, the merged entity shall use the method specified in section 25.701(f)(1) of the Commissions 
rules.472 Specifically, the number of full-time audio channels shall be determined annually by calculating, 
based on measurements taken on a quarterly basis, the average number of channels available for audio 
programming on all satellites licensed to the provider during the previous year.473 In addition, as 
provided in the regulations implementing the DBS set-aside, Applicants may use this reserved capacity 
for any purpose until such time as it is used for NCE programming.474 We agree with Public Knowledge 
that the number of reserved channels must be based on total system capacity and not on the number of 
channels in any particular service package.  Public interest channels must be made available to all 
  
467 See The Word Network July 11, 2008 Ex Parte at 1 (proposing that not-for-profit entities offering programming 
to minority audiences qualify for NCE set asides).
468 Application at 12-14.
469 See DBS PI Order, 13 FCC Rcd at 23302  116. 
470 Id.
471 Id.
472 47 C.F.R.  25.701(f)(1).  See also DBS PI Order, 13 FCC Rcd at 23282-84  69-71. 
473 See 47 C.F.R.  25.701(f)(1). 
474 Id. 
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subscribers at no additional charge.475 With respect to noncommercial programming already carried by 
one or both of the SDARS licensees, we disagree with Public Knowledge that this programming never be 
counted as qualified for carriage on the reserved channels.  The merged entity has the discretion to choose
among programmers, and those noncommercial entities already carried should not be penalized for prior 
successful relationships with SDARS licensees. 
145. As in the DBS context, the merged entity may not exercise editorial control over the 
programming on the reserved channels but may chose between qualified programmers when demand for 
capacity exceeds channel supply.  With respect to Public Knowledges suggestion that local as well as 
national programmers are qualified for carriage, the merged entity could choose a local programmer but 
must not use its terrestrial repeater network to originate local programming or local advertising that is not 
carried on its satellites.476 In other words, any noncommercial programming on the reserved channels, 
like all other SDARS programming, must be carried by satellites that reach customers nationwide.  The 
merged company may charge noncommercial programmers no more than 50 percent of the direct costs of 
making the channel available for access, although they may charge such programmers less than 50 
percent.477 As in the DBS context, direct costs may not include those related to the construction, launch, 
or general operation of the satellite, nor can they include marketing costs, general administrative costs, or 
similar overhead costs of the SDARS provider or the revenue it might have lost if it could have offered 
the channels to a commercial programmer.478  
146. The merged entity shall reserve discrete channels and offer these to qualified 
programmers at consistent times to fulfill this reservation requirement.479  In addition, the merged 
company must comply with the public file requirements of section 25.701(f)(6) of the Commissions 
Rules, 47 C.F.R.  25.701(f)(6).  Finally, the merged entity shall make NCE channel capacity available 
upon consummation of the transaction, and programming provided pursuant to this set-aside requirement 
must be available to the public no later than six months after the transactions consummation.480
7. Service to Alaska, Hawaii, and Puerto Rico
147. Applicants have committed voluntarily to file applications with the Commission, within 
three months of the consummation of the merger, to provide the Sirius satellite radio service to the 
Commonwealth of Puerto Rico using terrestrial repeaters and to promptly introduce such service upon 
grants of permanent authority by the Commission to operate these repeaters.481 We find that the public 
interest would be served by Applicants voluntary commitment to provide service to Puerto Rico.  We 
also strongly encourage the merged entity to expand service to Alaska, Hawaii, the U.S. Virgin Islands, 
and other territories of the United States, where technically feasible and economically reasonable to do so.
148. In this proceeding, we have received comments urging the Commission to expand the 
  
475 See DBS PI Order, 13 FCC Rcd at 23285  74.  See also American Distance Education Consortium, Declaratory 
Ruling and Order, 14 FCC Rcd 19976 (1999) (ruling that reserved channels must be made available to subscribers in 
all parts of the country). 
476 See Section VI.C.2, infra. 
477 47 C.F.R.  25.701(f)(5).  See also DBS PI Order, 13 FCC Rcd at 23306-09  126-34 . 
478 See DBS PI Order, 13 FCC Rcd at 23306-08  126-30.
479 See 47 C.F.R.  25.701(f)(5).  See also DBS PI Order, 13 FCC Rcd at 23282  68.
480 See 47 C.F.R.  25.701(f)(7).  See also DBS PI Order, 13 FCC Rcd at 23309  136. 
481 Applicants June 13, 2008 Ex Parte at 4.
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SDARS geographic coverage requirements as a condition on approving the merger.482 In particular, 
commenters noted that although there was an expectation that access to SDARS would grow alongside 
technological advances, this has not been the case for consumers in Alaska, Hawaii, U.S. Virgin Islands, 
Puerto Rico, and the outlying territories of the United States.483 Thus, commenters have requested that 
access by all consumers in the United States be a central tenet of the Commissions merger review.484
149. Our rules governing the provision of SDARS requires that each applicant for an SDARS 
license demonstrate that its system will, at a minimum, provide service throughout the 48 contiguous 
United States (full CONUS).485 Under existing rules, there is no obligation that SDARS licensees 
provide service beyond full CONUS.486 Thus, Applicants voluntary commitment to provide the Sirius 
satellite radio service to Puerto Rico will expand SDARS service beyond existing coverage 
requirements.487
150. We decline to require expansion of the SDARS licensees geographic service area 
beyond this voluntary commitment.  Based on the record in this proceeding, we conclude that service 
outside full CONUS by the existing SDARS satellite networks is not technically feasible or economically 
reasonable at this time.  Although Applicants state that the Sirius satellite network is capable of serving 
Puerto Rico and southeastern portions of Alaska using its current three-satellite NGSO orbital 
  
482 Letter from Members of the Outlying Areas Senate Presidents Caucus, to Kevin J. Martin, Chairman, FCC (May 
19, 2008) at 1-2 (OASPC May 19, 2008 Ex Parte) (observing the lack of SDARS service to, among others, Guam, 
Northern Mariana Islands, and American Samoa); Letter from U.S. Rep. Luis G. Fortuo, to Kevin J. Martin, 
Chairman, FCC (Jan. 18, 2008) at 1 (Rep. Fortuo Jan. 18, 2008 Ex Parte) (opposing the merger [U]ntil such 
time that exclusion of Puerto Rico and other noncontiguous United States jurisdictions from coverage area of 
satellite radio ceases.); Letter from Chairman Jos E. Serrano of the Subcommittee on Finance Services and 
General Govt Communications on Appropriations, to Kevin J. Martin, Chairman, FCC (Sept. 19, 2007) (Rep. 
Serrano Sept. 19, 2007 Ex Parte) (asking the Commission to consider requiring Applicants to provide equal access 
to SDARS service to Alaska, Hawaii, Puerto Rico, and other U.S. Territories); Senate Resolution 3392, 
Commonwealth of Puerto Rico, October 1, 2007 (expressing opposition to the merger until the exclusion of Puerto 
Rico and other jurisdictions not contiguous to the United States from the mandatory coverage area of said service, 
ceases.).
483 Rep. Serrano Sept. 19, 2007 Ex Parte at 1 (noting that in 10 years since adopting the SDARS service rules, 
SDARS still is not available outside of full CONUS); Senate Resolution 3392, Commonwealth of Puerto Rico, 
October 1, 2007; OASPC May 19, 2008 Ex Parte at 2 (Many technological advances have occurred during the 
decade since the FCC first authorized satellite radio systems . . . with the result that today there exists no legitimate 
excuse for subjecting any United States jurisdiction to arbitrary exclusion from satellite radio services.).
484 Rep. Serrano Sept. 19, 2007 Ex Parte 2; Rep. Fortuo Jan. 18, 2008 Ex Parte at 2; OASPC May 19, 2008 Ex 
Parte at 2 (requesting that the Commission condition grant of merger on all American jurisdictions receiving satellite 
radio services within two years).
485 47 C.F.R.  25.144(a)(3)(i) (requiring Applicants to demonstrate that its system will, at a minimum, serve the full 
CONUS).
486 When adopting this rule, the Commission considered, but ultimately rejected, a proposal to require SDARS 
licensees to provide 50-state coverage, or 50-state plus Puerto Rico/Virgin Islands coverage.  After reviewing the 
record, the Commission observed that 50-state coverage was not mandatory for satellite services at that time and that 
a service area beyond full CONUS might not be practical for first generation SDARS systems.  1997 SDARS Service 
Rules Order, 12 FCC Rcd at 5794  99.
487 In light of Applicants voluntary commitment to provide service to Puerto Rico, Rep. Fortuo states that he no 
longer objects to the proposed merger.  Letter from U.S. Rep. Luis G. Fortuo to Kevin J. Martin, Chairman, FCC 
(June 25, 2008). 
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configuration and satellite design,488 satellite coverage does not extend to the rest of Alaska or Hawaii due 
to technical limitations, such as low elevation angles489 and requirements for high power over CONUS. 490  
Applicants also state that [REDACTED].491 We nevertheless strongly encourage the merged entity to 
include service to Alaska, Hawaii, the U.S. Virgin Islands, and other territories of the United States as 
part of future applications to launch and operate SDARS satellites, where such service is technically 
feasible and economically reasonable.
C. Other Issues
1. Spectrum Givebacks
151. We decline to impose a condition requiring Applicants to divest a portion of their 
spectrum.  Some commenters argue that, for the merger to serve the public interest, the merged entity 
must surrender up to half of its assigned spectrum in order to allow a new competitor to enter the market 
for SDARS.492 Applicants, however, assert that the Commission should reject any proposals that involve 
divestiture of a portion of the combined entitys spectrum post-merger because such divestiture is 
unnecessary and would undermine the public benefit of the merger.493 Other commenters join Applicants 
  
488 Sirius Nov. 16, 2007 Response to Information and Document Request III.G, Narrative at 49-50, n.11 (Response 
to Interrogatory Question III.G. requesting that Sirius describe what factors went into the selection of the 
geographic coverage areas for the satellite network, as well any technical, economic, other considerations that limit 
the ability of the Sirius satellite network to serve US state and territories outside the contiguous United States.  
Sirius Information Request at 4).
489 To provide a high quality of service and signal diversity, SDARS satellites usually need to be at a reasonable 
elevation angle above the horizon. When the angle of elevation is too low, mountainous terrain and buildings may 
obstruct the sight lines to the satellite blocking the signal.  In addition, with a low angle of elevation atmospheric 
attenuation and electrical noise would also degrade the quality of service.
490 Sirius Nov. 16, 2007 Response to Information and Document Request, Narrative at 50 (Coverage was not 
extended to all of Alaska and/or Hawaii due to both technical limitations (need to keep high power density in 
primary service areas combined with low look angles in Alaska/Hawaii) and relatively low population densities in 
those states that limit the economic benefits of extending the coverage.)  The original application for Sirius 
network indicates that coverage for Puerto Rico and Alaska is at a lower power level than full CONUS coverage. 
See Application of Satellite CD Radio Inc. for Minor Modification of License to Construct, Launch and Operate a 
Non-Geostationary Satellite Digital Audio Radio Service System, IBFS File No. SAT-MOD-19981211-00099 (filed 
Dec. 11, 1998).
491 XM Nov. 16, 2007 Response to Information and Document Request, Narrative at 33-41.  (Response to 
Interrogatory Question III (G) requesting XM to describe what factors went into the selection of the geographic 
coverage areas for the satellite network, as well any technical, economic, other considerations that limit the ability of 
the XM satellite network to serve US state and territories outside the contiguous United States.  XM Information 
Request at 4).  
492 See, e.g., Mt. Wilson Supp. to Petition at 2 (arguing the merger can be condoned only if the merged entity is 
limited to the allocated spectrum of one of Applicants); King Reply at  42 (stating that unless Applicants use one of 
the bands for expanded service, they should not be allowed to keep both bands if the merger is approved); Sen. 
Bond June 4, 2008 Ex Parte at 1 (requesting that the Commission require the merged entity to divest part of its 
spectrum); NPR Petition at 21; Blue Sky Comments at 7; Prometheus Comments at 5; Letter from U.S. Sens. 
Olympia J. Snowe and Claire McCaskill, to Kevin J. Martin, Chairman, FCC (May 21, 2008) at 2 (Sens. Snowe 
and McCaskill May 21, 2008 Ex Parte).
493 Joint Opposition at 87-88 (arguing divestiture is unnecessary because (1) there is sufficient spectrum available 
for new competition to enter the audio entertainment market, including those using satellite technology; (2) 
requiring one of the companies to divest its spectrum would make half of the 14 million satellite radios completely 
inoperable because the current receiver equipment cannot receive the signals of both companies; and (3) reducing 
(continued.)
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in opposing spectrum divestiture as a condition to the merger.494 For the reasons set forth below, we 
agree with Applicants that the public interest would not be served by requiring the merged entity to divest 
completely a portion of SDARS spectrum.
152. Applicants each use 12.5 MHz to deliver content to receivers, and transmit data streams 
by three separate data paths:  two time-diverse satellite paths and a terrestrial repeater path.495 Although 
these data streams are redundant, the redundancy of the signals, along with onboard digital signal 
processing, ensures that the listener experiences minimal outages.496 Any divestiture of spectrum by 
Sirius would require an overhaul of the network and would require Sirius to replace all of its current user 
receivers.497 A partial divestiture of spectrum by XM would also require an overhaul of the network, 
although XM could divest approximately 6.25 MHz without requiring XM to replace all customer 
radios.498 The reduced bandwidth, however, would significantly reduce the number of channels and the 
quality of service for existing XM customers.   Furthermore, in addition to the harm to existing SDARS 
customers from a partial divestiture, it is not clear to us that a new competitor would have sufficient 
spectrum to emerge as a significant competitor to the newly merged entity, nor is it clear that a new 
SDARS operator could overcome the regulatory and business hurdles required to offer service.
153. We also considered alternative methods that would permit a new SDARS operator in the 
spectrum.499 We have determined, however, that each method has drawbacks that would make it 
(Continued from previous page)    
available spectrum would limit the combined companys ability to realize merger-specific efficiencies, including the 
potential for expanded programming choices and additional services).
494 NextWave June 18, 2008 Ex Parte at 1 (arguing that spectrum divestiture by the merged entity could negatively 
impact the ability of terrestrial wireless services in adjacent spectrum bands to coexist with licensees in the SDARS 
band).
495 Sirius Nov. 16, 2007 Response to Information and Document Request, Narrative at 37.
496 Unlike a broadcast radio band, where re-licensing of any single station will not affect other stations, the 
individual channels in an SDARS system exist only at the studio and in the users receiver.  Between these two 
locations, the data from all of the channels are combined into a single data stream with the number of bits allocated 
to any one channel varying on an instant-by-instant basis.
497 The Sirius network transmits the data in three data streams of approximately four MHz each.  Sirius Nov. 16, 
2007 Response to Information and Document Request, Narrative at 37.  We conclude that Sirius could not eliminate 
any one of the three 4 MHz data paths without significantly increasing the likelihood of dropouts.  Similarly, Sirius 
could not reduce the size of its individual 4 MHz data path and offer fewer channels to its customers, because the 
user receivers and many other network components  including the receivers, terrestrial repeaters and space stations 
themselves  only recognize a data stream of approximately 4 MHz and would not recognize a stream of a different 
size.
498 Unlike Sirius, XM divides each of its three data streams into two duplicative streams, for a total of six segments.  
See XM Nov. 16, 2007 Response to Information and Document Request, Narrative at 29.  Thus, XM transmits the 
data for all its programming in six 1.8 MHz data streams: four time-diverse satellite bands (S1A, S2A, S2B and 
S1B) and two terrestrial repeater bands (TA and TB). See XM Nov. 16. 2007 Response to Information and 
Document Request, Narrative at 17, 29.  XM could divest approximately 6.25 MHz by divesting either the A 
bands (S1A, S2A, TA) or the B bands (S1B, S2B and TB) without requiring XM to replace existing subscriber 
radios.
499 WCS Coalition questions whether Sirius is authorized to provide its Backseat TV service and urges the 
Commission to prohibit Sirius from launching the service until the Commission has implemented WCS rules.  Letter 
from Paul J. Sinderbrand, Wilkinson Barker Knauer LLP, Counsel for the WCS Coalition, to Helen Domenici, 
Chief, International Bureau, FCC and Fred Campbell, Chief, Wireless Telecommunications Bureau, FCC (Apr. 17, 
2007) at 1-2.  See also Letter from David R. Siddall, Sonnenschein Nath & Rosenthal LLP, Counsel for 
Georgetown, to Kris Monteith, Chief, Enforcement Bureau, FCC (July 10, 2008).  The Enforcement Bureau is 
(continued.)
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infeasible for a new SDARS operator to offer service.  Requiring the merged entity to transfer the space 
and ground infrastructure of either Sirius or XM to a new SDARS operator might allow the new operator 
to begin service without the delays of building a new satellite network from scratch.500 However, we 
believe that the cost of purchasing these assets would be prohibitively expensive for a new operator to 
enter the market in the near term.501 For these reasons, we reject Primospheres request for a condition to 
require the merged entity to enter into an agreement whereby Primosphere could deliver programming by 
means of the existing SDARS satellite systems.502
2. No Local Programming or Local Advertising
154. Terrestrial broadcasters contend that the merger will harm their ability to provide free 
over-the-air local programming.  For example, NAB contends that Applicants will increase the amount of 
advertisements via their services after the merger is consummated,503 and that the loss of even a small 
amount of advertising revenue to the merged entity would be devastating to local radio stations and 
would force them to reduce local programming.504 Clear Channel requests that the Commission prohibit 
the merged entity from carrying local programming and local advertising.505
155. As stated above, we find that record before us now does not show that the merger will 
necessarily harm the ability of local broadcasters to air locally oriented programming.506 In addition, we 
note that Applicants operate terrestrial repeaters pursuant to grants of special temporary authority that 
restrict the use of repeaters to the simultaneous retransmission of the complete programming, and only 
that programming, transmitted by the satellite directly to SDARS receivers.507 Thus, SDARS licensees 
are already prohibited, independent of the merger, from using terrestrial repeaters to distribute localized 
content that is distinct from that provided to subscribers nationwide via satellite.  We note that the 
(Continued from previous page)    
reviewing the issues raised by Georgetown regarding the Sirius Backseat TV service and will address those issues 
separately.
500 Primosphere Petition at 3-4 (proposing that the Commission require the merged entity to enter into an agreement 
with Primosphere to allow it to use a portion of the SDARS spectrum to begin delivering programming to 
consumers).
501 See, e.g., C3SR Petition at 12-13 (asserting that for a new entrant to establish itself in the market, it would take 
about five years and potentially billions of dollars).
502 Primosphere Petition at 3-4; Primosphere Reply at 3.
503 NAB Petition at 32-33 (arguing that the lower-priced a la carte and tiered service offerings proffered by the 
merged entity would likely be advertiser-supported).
504 NAB Response to Comments at 21-22.  See also McGannon at 6-7 (observing that broadcasters primarily rely on 
local advertising dollars); Letter from Lawrence R. Sidman, Counsel for Clear Channel, to Marlene H. Dortch, 
Secretary, FCC (Mar. 5, 2007), Att. at 1-2 (arguing that the spectrum advantage of SDARS  300 channels vs. a 
limit of 8 channels for terrestrial station owners in the largest markets  would allow a merged company to lock up 
quality programming and to siphon off national and local advertising revenue).
505 Clear Channel June 20, 2008 Ex Parte at 2; see also Sen. Bond June 4, 2008 Ex Parte at 2 (stating it is vital that 
the new satellite radio company reaffirm its position as a national service only); see also Sens. Snowe and 
McCaskill May 21, 2008 Ex Parte at 1.  
506 See supra, Section IV.C.2.
507 See, e.g., Sirius STA Order, 16 FCC Rcd at 16780  18.  In addition, in the pending rulemaking proceeding to 
develop rules for the operation of SDARS terrestrial, repeaters the Commission has tentatively concluded that the 
origination of local programming from SDARS repeaters would be inconsistent with the allocation of the spectrum.  
See 2007 SDARS Second Further Notice, 22 FCC Rcd at 22141  55 (citing 1997 SDARS Service Rules Order, 12 
FCC Rcd at 5812  142). 
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prohibition on local content remains in effect and prohibits Applicants from distributing local 
programming as well as local advertising.508 In light of the importance of local sports programming to 
terrestrial radio stations, we prohibit the merged entity from entering into any agreements that would 
preclude any terrestrial radio station from broadcasting live local sporting events.  Entities concerned 
about Applicants compliance with these mandates may file complaints with the Commission, which will 
act promptly to enforce the prohibitions.
VII. COMPLIANCE WITH COMMUNICATIONS ACT AND COMMISSIONS RULES AND 
POLICIES
A. 1997 SDARS Report & Order
156. In 1997, the Commission established the SDARS service and determined that there 
would be two initial SDARS licenses, sold at auction to different parties.  The 1997 SDARS Service Rules 
Order contained the following paragraph:
Transfer. We note that DARS licensees, like other satellite licensees, 
will be subject to rule 25.118, which prohibits transfers or assignments of 
licenses except upon application to the Commission and upon a finding by the 
Commission that the public interest would be served thereby.  Even after DARS 
licenses are granted, one licensee will not be permitted to acquire control of the 
other remaining satellite DARS license.  This prohibition on transfer of control 
will help assure sufficient continuing competition in the provision of satellite 
DARS service.509
157. The 2007 SDARS NPRM sought comment on whether this language in the 1997 SDARS 
Service Rules Order constitutes a binding Commission rule and, if so, whether the Commission should 
waive, modify, or repeal the prohibition in the event it determines that the proposed merger would serve 
the public interest. 510 Commenters expressed conflicting views on these issues.  Applicants maintain that 
this language is a policy statement under the Administrative Procedure Act (APA), rather than a 
binding Commission rule because it was not codified in the Code of Federal Regulations.511 Specifically, 
they claim that it is merely a policy statement reflecting the Commissions view, based on the evidence 
available in 1997, that two satellite radio licensees were needed to have enough competition in the audio 
entertainment market.512 Other parties argue that the prohibition is a binding rule.  They contend that the 
Commission intended to impose a binding legal prohibition on merger by the satellite DARS licensees, 
that it was adopted in a notice and comment rulemaking proceeding, and that it was published in the 
Federal Register.513
158. We find that the prohibition is a binding substantive rule, not a mere statement of policy.  
The prohibition is expressed in clear, specific, and unequivocal language; was characterized by the 
  
508 See Applicants July 25, 2008 Ex Parte at 2.
509 1997 SDARS Service Rules Order, 12 FCC Rcd at 5823  170 (this language is found under the subheading 
Safeguards).
510 2007 SDARS NPRM, 22 FCC Rcd at 12018  1; see also June 8, 2007 Public Notice, infra n.1.
511 Application at 50.
512 Id.  To the extent that the Commission considers the above-quoted language in the 1997 SDARS Service Rules 
Order to be a binding rule prohibiting the proposed transfer of control, Applicants requested that the Commission 
waive, modify, or otherwise alter it to the extent necessary to permit the proposed merger.  Id. at 51-52.
513 NAB Comments at 3-4; NPR Comments at 4-9; Clear Channel Aug. 13, 2007 Comments at 3-5.
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Commission in the 1997 SDARS Service Rules Order as a prohibition; and leaves no room for the 
exercise of agency discretion (unless it is waived, modified or repealed).  Recent decisions distill the D.C. 
Circuits attempts to distinguish between rules and policy statements into two related lines of analysis:
One line of analysis focuses on the effects of the agency action.  See Cmty. 
Nutrition Inst. v. Young, 818 F.2d 943, 946 (D.C. Cir. 1987) (stating that the 
court should consider whether the agency action (1) impose[s] any rights and 
obligations, or (2) genuinely leaves the agency and its decisionmakers free to 
exercise discretion) (internal quotations omitted); see also, e.g., Troy Corp. v. 
Browner, 120 F.3d 277, 287 (D.C. Cir. 1997); Am. Bus. Assn v. United States, 
627 F.2d 525, 529 (D.C. Cir. 1980).  The second line of analysis focuses on the 
agencys expressed intentions.  See Molycorp., Inc. v. EPA, 197 F.3d 543, 545 
(D.C. Cir. 1999) (stating that the court should consider  (1) the Agencys own 
characterization of the action; (2) whether the action was published in the Federal 
Register or the Code of Federal Regulations; and (3) whether the action has 
binding effects on private parties or on the agency); see also, e.g., Am. Portland 
Cement Alliance v. EPA, 101 F.3d 772, 776 (D.C. Cir. 1996).514
The ultimate focus of both analytic approaches is whether the agency action binds private parties or the 
agency itself with the force of law.515
159. The plain language of the relevant paragraph in the 1997 Report and Order binds both 
private parties and the Commission itself with the force of law.  First, it removes the Commissions 
discretion to approve one satellite DARS licensees acquisition of control of the other, absent repeal of 
the prohibition, by stating in advance that such an acquisition will not be permitted.516 Second, the use of 
the words will not be permitted and prohibition strongly suggests that the Commission intended this 
to be a binding rule.517  Indeed, it is difficult to imagine words that would have a more mandatory 
connotation than those used here.
160. Applicants assert that the real dividing point between binding regulations and general 
statements of policy is publication in the Code of Federal Regulations, which the [APA] authorizes to 
contain only documents which having general applicability and legal effect, and which the governing 
regulations provide shall contain only each Federal regulation of general applicability and current or 
future effect.518 The D.C. Circuit, however, has refused to place such weight on the publication factor.  
  
514 CropLife America v. EPA, 329 F.3d 876, 883 (D.C. Cir. 2003) (CropLife); see also Wilderness Soc. v. Norton, 
434 F.3d 584, 595 (D.C. Cir. 2006) (Wilderness Soc.); General Elec. v. EPA, 290 F.3d 377, 382 (D.C. Cir. 2002) 
(General Elec.).  
515 CropLife, 329 F.3d at 883 (quoting General Elec., 290 F.3d at 382).
516 Cf. Wilderness Soc., 434 F.3d at 595 (internal agency policy did not read as a set of rules as a whole because it 
lacks precision in its directives, and there is no indication of how the enunciated policies are to be prioritized); 
Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 538 (D.C. Cir. 1986) (Brock) (language in published 
enforcement policy did not establish a binding rule where it was replete with indications that the Secretary retained 
his discretion to cite production-operators as he saw fit).
517 See Community Nutrition Inst., 818 F.2d at 947 (mandatory, definitive language included in an FDA action 
level, which informs food procedures for the permissible levels of contaminants, clearly reflects an interpretation of 
action levels as presently binding norms); Cf. Brock, 796 F.2d at 538 (We have  given decisive weight to the 
agencys choice between the words may and will.).  
518 Applicants Comments to NPRM at 3-4, n.11 (quoting Wilderness Soc., 434 F.3d at 596).
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As it has said, [i]n none of the cases citing the distinction  has the court taken publication in the Code 
of Federal Regulations, or its absence, as anything more than a snippet of evidence of agency intent.519  
In contrast, the D.C. Circuit has given decisive weight to mandatory language.520 The publication factor 
is of even less significance here than in other cases because the prohibition at issue here applies to only 
two entities and those two entities were very familiar with the 1997 SDARS Service Rules Order, making 
it less necessary to codify the prohibition.
161. For the foregoing reasons, we conclude that the prohibition on merger in the 1997 Service 
Rules Order is a binding rule.  Therefore, we must address the question raised in the Notice whether we 
should waive, modify, or repeal the prohibition in order to permit the proposed merger.521
162. First, we disagree with Applicants that it is appropriate to waive the prohibition in order 
to permit the merger.522 As a number of commenters note,523 it is well established that [t]he function of a 
waiver is not to change the general standard, a matter for which the opportunity for general comment is a 
prerequisite under the Administrative Procedure Act, but to justify an ad hoc exception to that standard in 
a particular case.524 Here, the prohibition against merger applies only to the two Applicants; it has no 
application beyond this proceeding.  Thus, grant of a waiver clearly would eviscerate the rule and for that 
reason is not appropriate here.
163. We can, of course, repeal a rule if we decide that doing so would serve the public interest 
and we comply with rulemaking procedures.525 In this proceeding, we repeal the prohibition on merger 
set forth in paragraph 170 of the 1997 SDARS Service Rules Order.  We find above that approval of the 
merger, subject to Applicants voluntary commitments and the other conditions, will benefit consumers 
  
519 Health Ins. Assn of America, Inc. v. Shalala, 23 F.3d 412, 423 (D.C. Cir. 1994).  See also Community Nutrition 
Inst., 818 F.2d at 947 n.8 (FDA action levels for contaminants were binding rules despite non-publication in the 
Code of Federal Regulations).  Even in Wilderness Soc., the case quoted at length by Applicants, the court focused 
on publication in the C.F.R. and the Federal Register as a means of discerning agency intent, not for purposes of 
establishing a bright-line distinction between binding rules and policy statements.  See, e.g., Wilderness Soc., 434 
F.3d at 596 (Failure to publish in the Federal Register is indication that the statement in question was not meant to 
be a regulation since the [APA] requires regulations to be so published.  The converse, however, is not true: 
Publication in the Federal Register does not suggest that the matter published was meant to be a regulation.) 
(emphasis in the original).
520 See Brock, 796 F.2d at 538; see also General Elec., 290 F.3d at 383 (the mandatory language of a document 
alone can be sufficient to render it binding).
521 See 2007 SDARS NPRM, 22 FCC Rcd at 12019-21  3.
522 Application at 51.
523 See, e.g., NAB Comments at 10-13; NPR Comments at 10.
524 Authority to Construct and Operate an Automated Maritime Telecom. System, 3 FCC Rcd 4690, 4692 (1988).  
See also Am. Trucking Assn, Inc. v. FHA, 51 F.3d 405, 414 (4th Cir. 1995) (Commonly understood, administrative 
waivers are a mechanism to seek out the public interest in particular, individualized cases.  They are not a 
device for repealing a general statutory directive. (quoting WAIT Radio v. FCC, 418 F.2d 1153, 1157 (D.C. Cir. 
1969) (emphasis added)); WAIT Radio, 418 F.2d at 1159 (The courts insistence on the agencys observance of its 
obligation to give meaningful consideration to waiver applications emphatically does not contemplate that an agency 
must or should tolerate evisceration of a rule by waivers.).  Cf. WITN-TV v. FCC, 849 F.2d 1521, 1525 (D.C. Cir. 
1988) (The waiver concept does not serve in this context, for petitioners plea  is in essence one for agency 
reconsideration of existing policy.).
525 5 U.S.C.  553.  See, e.g., Appropriate Framework for Broadband Access to the Internet Over Wireline 
Facilities, Report and Order and Notice of Proposed Rulemaking, 20 FCC Rcd 14853, 14857-60  4-11 (2005) 
(eliminating rules after notice and comment rulemaking).
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by making available to them a wider array of programming choices at various price points and affording 
them greater choice and control over the programming to which they subscribe, and that those benefits 
exceed the harms identified above.  For the same reasons, we conclude that repeal of the rule prohibiting 
the merger will, on balance, serve the public interest.526
B. Enforcement Matters
164. NAB and other commenters argue that Applicants each have a history of ignoring the 
Commissions rules and the Commission therefore cannot reasonably rely on a merged XM-Sirius entity 
to comply with any regulatory conditions that might be imposed.527 In particular, NAB makes two 
specific allegations concerning Applicants marketing of FM modulators and use of terrestrial repeaters, 
which are discussed below.
165. First, NAB asserts that  Applicants violated the Part 15 equipment rules intended to 
ensure that the modulators528 in their satellite radio receivers do not interfere with broadcast radio 
stations.529 Consequently, NAB states, listeners to noncommercial530 radio stations may not only receive 
interference, but may also receive signal bleed that results in their hearing on their vehicle radios 
unwanted satellite radio programming.531 NAB adds that [i]t is a matter of record that these violations 
were apparently intentional on Siriuss part.532
166. Second, NAB alleges that XM violated the Commissions technical rules in constructing 
and operating its network of terrestrial repeaters.533 XMs repeater violations, NAB states, include 
operation of 19 repeaters without any FCC authorization; construction and operation of at least 125 
repeaters at unauthorized locations; operation of at least 221 repeaters at power levels in excess of its 
authorization; and installation of more than 80 of its repeaters at heights that exceeded authorized 
  
526 We reject the arguments opposing repeal of the rule prohibition in Sections IV, V, and VI.B, supra, for the same 
reasons that we reject commenters arguments opposing the merger.  See, e.g., NAB Comments at 13-23; NAB 
Reply at 3-8; NPR Comments at 11-20.
527 NAB Petition at 50-51; see also NAB Response to Comments at 10; NABOB Petition at 13-14; USE Petition at 
13-14; Entravision Comments at 19-20; Letter from U.S. Rep. Nancy Boyda to Kevin J. Martin, Chairman, FCC 
(Apr. 5, 2007) at 1; Letter from U.S. Reps. F. James Sensenbrenner, Jr. and Gene Green, to Kevin J. Martin, 
Chairman, FCC (June 18, 2007) at 2.  In addition, Blue Sky questions whether Applicants meet the citizenship, 
character  and other qualifications test set forth in Section 308(b) of the Act, 47 U.S.C.  308 (All applications 
for station licenses, or modifications or renewals thereof, shall set forth such facts as the Commission by regulation 
may prescribe as to the citizenship, character, and financial, technical, and other qualifications of the applicant to 
operate the station.).  Blue Sky Comments at 6-7; Blue Sky Reply at 1-3.
528 Many portable satellite radio receivers have built-in FM modulators or transmitters, which are designed to permit 
users to listen to satellite radio over a car radio on unused FM frequencies.  Such modulators must comply with the 
Commissions Part 15 technical requirements and receive an equipment certification prior to marketing.  See 47 
C.F.R.  15.3(o), 15.201, 15.239.
529 NAB Petition at 55.
530 Noncommercial radio stations are more likely to receive interference from FM modulators because FM 
modulators are typically set to operate on vacant channels near the lower end of the FM band, where noncommercial 
stations frequently operate.  
531 NAB Petition at 55.
532 Id. (citing Siriuss SEC Form 10-Q for the Quarterly Period Ended September 30, 2006 at 35). 
533 Id. at 56.
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levels.534 In addition, NAB asserts that XM continued the unauthorized operations even after the 
violations came to its attention.535 NAB states that Sirius has engaged in analogous, although less 
extensive, repeater violations.536
167. In response, Applicants assert that they take their obligations and responsibilities as FCC 
licensees seriously.537 According to Applicants, the allegations raised by NAB and others do not bear on 
their qualifications as Commission licensees or cast doubt on their willingness to comply with merger-
specific conditions.538 Regarding the FM modulators, Applicants state that they have cooperated fully 
with the Enforcement Bureau in its investigations into whether some of their receivers were non-
compliant with Commission regulations and that all newly produced receivers are fully consistent with 
applicable regulations.539 In addition, Applicants indicate that both companies voluntarily disclosed their 
terrestrial repeater variances to the Commission in October 2006 after taking unilateral actions to bring 
many of those variances into compliance, that no party has experienced interference as a result of the 
repeater variances, and that both companies have been working diligently with Commission staff to 
resolve issues concerning their repeaters.540
168. Applicants argue that the Commission has repeatedly rejected the notion that outstanding 
allegations of rule violations that can be addressed through the normal enforcement procedures have any 
bearing on a licensees qualifications.541 Rather, Applicants state, the Commission has made clear that 
typically it will not consider in merger proceedings matters that are the subject of other proceedings 
before the Commission.542 Applicants assert that NABs allegations relate entirely to issues that have 
been brought to the Commissions attention and the agency is addressing these matters through its 
traditional enforcement procedures.543 Therefore, Applicants conclude that the issues raised by NAB 
have no relevance to the Commissions review of the merger.544
169. We agree that the issues concerning Applicants apparent misconduct in connection with 
the manufacture, importation, marketing and distribution of modulators for their services and the 
construction and operation of various of their terrestrial repeaters are troubling.  We have, however, fully 
investigated these matters and, after extensive discussions with the parties and careful consideration of the 
record, concluded that settlement of these issues by consent decrees was in the public interest.  As we 
noted in the Orders adopting the Consent Decrees:
  
534 Id. at 56-57.
535 Id. at 57.
536 Id. at 56 (citing Sirius Supplemental Information, IBFS File Nos. SAT-STA-20061013-00121, 20061013-00122 
(April 26, 2007), and Request of Sirius for Special Temporary Authorization Regarding Digital Audio Radio Service 
Terrestrial Repeaters, IBFS File Nos. SAT-STA-20061013-00122 (Nov. 17, 2006)).  Additionally, as stated above, 
NAB argues that both Applicants have violated the SDARS receiver interoperability rule.  NAB Petition at 52.
537 Joint Opposition at 94.
538 Id. 
539 Id. at 96.
540 Id. at 97-98.
541 Id. at 98.
542 Id. (quoting SBC-Ameritech Order, 14 FCC Rcd at 14950  50 (emphasis added)).
543 Id. at 99.
544 Id.
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We do not come to this conclusion easily.  The apparently intentional nature of some of the 
violations  and the apparent involvement of certain XM [and Sirius] personnel in these 
violations are very troubling.  Indeed, the ability and willingness to conform ones conduct to the 
requirements of the Commissions rules are central to the qualifications of any Commission 
licensee.  We must balance our concern, however, against the publics interest in the continued 
availability and viability of [the companies] satellite radio service and the impact on the public 
and other licensees that [the companies] violations precipitated.  These considerations, taken 
together with the rigorous oversight and reporting obligations and substantial voluntary 
contribution[s] prescribed in [the] Order[s] and the Consent Decree[s], persuade us that 
settlement of these matters would best serve the public interest.545
170. The Consent Decrees terminated the agencys investigations into Applicants compliance 
with the Commissions regulations governing FM modulators and the terms of their authorizations for 
their terrestrial repeaters.  The Consent Decrees also provide that Applicants will each make a substantial 
voluntary contribution to the U.S. Treasury, implement certain remedial measures with respect to radio 
receivers with built-in FM modulators in the hands of subscribers, and implement comprehensive 
compliance plans to ensure the companies future compliance with the Commissions regulations.  In 
addition, XM agrees, within a period of 60 days from the effective date of the Consent Decree, to shut 
down 50 variant terrestrial repeaters and to bring another 50 repeaters into compliance with the 
specifications that they were originally authorized or cease operating them.  Sirius can return to operation 
two of its repeaters, which varied slightly from what they were originally authorized to do, and may 
return to operation another nine repeaters that varied significantly from their original authorization, 
provided they are first brought into compliance with what they were originally authorized to do.  
171. The compliance plans in the Consent Decrees are extensive and involve the appointment 
of a dedicated FCC Compliance Officer, with explicit equipment design and certification authority and 
responsibility, the development and implementation of recurring and enduring compliance training 
programs, and the development and use of detailed guidelines governing equipment design and 
certification and the implementation of any changes to the Applicants terrestrial repeater networks.  
Applicants also are subject to continuing reporting obligations that will serve to ensure that the 
Commission is informed on an ongoing basis of all developments relevant to the companies compliance 
with the Consent Decrees.  Except with respect to their training obligations, which continue indefinitely, 
the Consent Decrees will continue in effect for a period of five years.  
172. In light of these and other provisions in the Consent Decrees and our consideration of the 
record as a whole, we concluded that our investigations raised no substantial and material questions of 
fact as to whether Applicants possess the basic qualifications, including those related to character, to hold 
or obtain any Commission license or authorization.  In this connection, we note that NAB does not assert 
that Applicants lack the requisite qualifications to hold or obtain FCC licenses or authorizations.  
Moreover, while one commenter, Blue Sky Services, questions whether Applicants meet the citizenship, 
character  and other qualifications test set forth in Section 308(b) of the Act,546 our conclusions in the 
settlement proceedings, as detailed above, directly address and adequately dispose of this contention.
173. Finally, to the extent that NAB and various commenters argue that the Commission 
cannot rely upon a merged XM-Sirius entity to comply with any regulatory conditions given Applicants 
  
545 Sirius Consent Decree Order at  3; XM Consent Decree Order at  3.
546 Blue Sky Comments at 6-7; Blue Sky Reply Comments at 1-3.  See 47 U.S.C.  308(b) (All applications for 
station licenses, or modifications or renewals thereof, shall set forth such facts as the Commission by regulation may 
prescribe as to the citizenship, character, and financial, technical, and other qualifications of the applicant to operate 
the station.).
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past history of non-compliance with Commission rules, we disagree.547 We are conditioning our approval 
of the merger transaction on the merged entitys compliance with Applicants voluntary commitments.  
We will rigorously monitor Applicants compliance with the conditions of the Consent Decrees and the 
conditions specified herein and believe that the mechanisms put in place in those Decrees will fully serve 
to ensure compliance on an ongoing basis.  Moreover, we will not hesitate to take prompt and effective 
enforcement action if these conditions are not satisfied.548
174. EEO Obligations. In the 1997 SDARS Service Rules Order the Commission determined 
that satellite DARS licensees must comply with the Commissions equal employment opportunity 
requirements.549 We reiterate that decision here.  When SDARS services were initially licensed, the 
Commission had a pending rulemaking proposing revision to its EEO rules; the Commission decided that 
licensees in the SDARS services would be required to comply with the then-current rule and any changes 
adopted when the rulemaking is completed.550 Thus, we clarify here that the merged entity must comply 
with the Commissions EEO broadcast rules and policies, including periodic submissions to the 
Commission consistent with the reporting schedule established for broadcast licensees.551
  
547 NAB argues that the violations are directly relevant to the Commissions review of the proposed merger, 
separate and apart from basic character qualifications issues, because they cast doubt on the reliability of 
Applicants voluntary commitments.  NAB Petition to Defer Action in MB Docket No. 07-57 (filed Oct. 9, 2007) at 
3. See NAB Petition at 55-58.  NAB points to the Commissions recognition in EchoStar that the merger applicants 
history of past conduct should be taken into account in assessing the likelihood that potential beneficial conduct 
will occur in the absence of private economic incentives.  EchoStar Communications Corp., 17 FCC Rcd at 20579 
 35. In that case, however, one of the prime subjects of the alleged prior misconduct, EchoStars failure to 
adhere to its must-carry obligations, l[ay] at the heart of the realization of the proffered public interest benefits 
claimed to flow from the merger - provision of additional local-into-local service pursuant to the must-carry rules.
Id.  Here, in contrast, none of Applicants technical rule violations pertain specifically to their voluntary 
commitments.  One of the commitments does concern the receiver interoperability mandate, which we conclude 
above was violated by Applicants. For the reasons discussed above, however, we do not believe that their 
interpretation of the mandate as a design requirement was unreasonable in light of all of the circumstances.
Therefore, we are not persuaded that their violation of the mandate should be taken into account in considering the 
likelihood of fulfillment of their commitment to make an interoperable receiver commercially available within one 
year of the consummation of the merger.
548 See SBC-Ameritech Order, 14 FCC Rcd 14712, 14749-50  571 (1999) (relying on SBCs voluntary 
commitments aimed at opening its local markets to competition in concluding that the public interest benefits of the 
proposed merger would outweigh the public interest harms, notwithstanding commenters arguments that SBC had 
history of vigorously resisting competition in its existing monopoly markets.).
549 1997 SDARS Service Order, 12 FCC Rcd at 5791  91 (The rationale behind these requirements is a belief that a 
licensee can better fulfill the needs of the community, whether local or national, if it makes an effort to hire a diverse 
staff, including minorities and women.).
550 Streamlining Broadcast EEO Rules and Policies, Order and Notice of Proposed Rulemaking, 11 FCC Rcd 5154 
(1996); see also Lutheran Church- Missouri  Synod v. FCC, 141 F.3d 344 (D.C. Cir. 1998), pet. for rehg denied, 
154 F.3d 487, pet. for rehg en banc denied, 154 F.3d 494 (D.C. Cir. 1998); Review of the Commissions Broadcast 
and Cable Equal Employment Opportunity Rules and Policies and Termination of the EEO Streamlining 
Proceeding, Report & Order, 15 FCC Rcd 2329 (2000); MD/DC/DE Broadcasters Association v. FCC, 236 F.3d 
13, rehearing denied, 253 F.3d 732 (D.C. Cir. 2001), cert. denied 122 S. Ct. 920 (2002); Review of the 
Commissions Broadcast and Cable Equal Employment Opportunity Rules and Policies, Second Report and Order 
and Third Notice of Proposed Rulemaking, 17 FCC Rcd 24018 (2002) (2002 Broadcast EEO Order).   
551 2002 Broadcast EEO Order, 17 FCC Rcd at 24062-69  139-64.  SDARS licensees therefore must refrain from 
discrimination in employment practices and engage in the same recruitment, outreach, public file, website posting, 
record-keeping, reporting, and self-assessment obligations required of broadcast licensees, consistent with 
Commission Rule 73.2080, 47 C.F.R.  73.2080, the policies set forth in the 2002 Broadcast EEO Order, and any 
(continued.)
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VIII. PROCEDURAL MATTERS
A. Petitions and Motions Addressing Various Other Issues
175. Various entities request the Commission to delay its decision on Applicants proposed 
merger or to designate the Application for hearing.  NAB filed a Petition to Defer Action urging the 
Commission to suspend its merger review until the Enforcement Bureau releases documents responsive to 
a Freedom of Information Act request filed by NAB.552 NAB asserts that the documents, which pertain to 
Applicants compliance with Commission rules governing the operation of FM modulators and terrestrial 
repeaters, are central in determining whether Applicants can be relied upon to adhere to promises made in 
their Application.553 In addition, USE asks the Commission to suspend its review to allow adequate time 
for the Commission to:  (1) address adverse effects of vertical integration; (2) disclose its findings on 
compliance matters, including Applicants failure to provide interoperable radios; (3) ensure that its ex 
parte rules are being followed; and (4) condition the merger should it be approved.554 USE also submitted 
filings arguing that the Commission should designate the Application for hearing because of material 
issues of fact regarding whether the public interest is served by the vertical integration that would occur 
with a merger and whether the information furnished in the Application is accurate and complete.555 The 
Leadership Conference on Civil Rights argues that the Commission should delay its final decision until it 
has had more time to assess the potential impact of a merger on media ownership diversity.556 We believe 
we have adequately addressed the issues relevant to this merger review and find that no further delay is 
warranted.557
176. Primosphere Limited Partnership (Primosphere) has a pending Application for Review 
seeking authority to operate two satellites in the SDARS spectrum if the Commission approves this 
(Continued from previous page)    
other Commission EEO policy as explained in Public Notices, case decisions, or other items.  This includes creating 
annual EEO public file reports and posting them on the company website and filing the same EEO reporting forms 
with the Commission used by terrestrial broadcasters (e.g., FCC Form 396 and 397) on the same schedule, 
notwithstanding the differences in license terms for broadcast stations and satellite facilities.  In addition, we clarify 
that SDARS licensees also will be subject to the same random audits as broadcast licensees and all the same
investigation and enforcement provisions including, but not limited to, audits for cause, reporting conditions, and 
forfeitures.  2002 Broadcast EEO Order, 17 FCC Rcd at 24066-67  153-58.  
552 NAB Petition to Defer Action at 1.
553 Id. at 1-4.
554 USE Petition to Defer Action at 3-16.
555 USE Petition to Designate Application for Hearing at 1-3; see also USE Motion to Designate and for Summary 
Decision at 1-3 (arguing that Applicants effectively conceded that material factual issues are in dispute by not 
opposing USEs designation petition).
556 Letter from Wade Henderson, President and CEO, Nancy Zirkin, Vice President/Dir. of Public Policy, and Mark 
Lloyd, Chairman, Media/Telecom. Task Force, Leadership Conference on Civil Rights, to Kevin J.  Martin, 
Chairman, FCC (July 27, 2007) at 1.
557 NAB also requests that we make public certain documents that Applicants have submitted as confidential 
pursuant to our Protective Orders. Letter from David H. Solomon, J. Wade Lindsay, Wilkinson Barker Knauer, 
LLP, Counsel for NAB, to Marlene H. Dortch, Secretary, FCC (June 3, 2008). Consumers Union and Consumer 
Federation of America make a similar request. Letter from Chris Murray, Consumers Union, Dr. Mark Cooper, 
CFA, to Marlene H. Dortch, Secretary, FCC (July 9, 2008). We will consider their requests for public disclosure 
separately pursuant to the terms of the Protective Orders and our regulations, 47 C.F.R.  0.459, 0.461.  We note 
that NAB already has reviewed these documents, as has the Commission, and that other parties have done so or had 
the opportunity to do so pursuant to our Protective Orders.
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merger.  Primosphere filed a motion to consolidate its proceeding with the XM-Sirius review.558 We do 
not believe these two proceedings need to be linked, and we therefore deny Primospheres motion.  
Primosphere filed a petition simultaneously with its motion, in which it attempts to preserve its request 
for SDARS spectrum in the event the Commission dismisses its Application for Review.  We need review 
Primospheres issues in only one proceeding.  We therefore deny Primospheres petition without 
prejudice to its Application for Review.
B.  Final Regulatory Flexibility Certification
177. Pursuant to the Regulatory Flexibility Act,559 the Commission certifies that the outcome 
of this rulemaking will not have a significant economic impact on a substantial number of small entities.  
This rulemaking affects SDARS providers.  SDARS provides nationally distributed subscription radio 
service.  Currently, only two operators hold licenses to provide SDARS service, XM and Sirius, which 
requires a great investment of capital for operation.  Because SDARS service requires significant capital, 
we believe it is unlikely that a small entity as defined by the Small Business Administration would have 
the financial wherewithal to become an SDARS licensee. 
C.  Final Paperwork Reduction Act Analysis
178. This document does not contain new or modified information collections subject to the 
Paperwork Reduction Act of 1995, Public Law 104-13.  In addition, therefore, it does not contain any 
new or modified information collection burden for small business concerns with fewer than 25 
employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4).
D.   Additional Information
179. For additional information on this proceeding, please contact Marcia Glauberman or 
Rebekah Goodheart, Industry Analysis Division, Media Bureau, at (202) 418-2330.
IX. ORDERING CLAUSES
180. Accordingly, having reviewed the applications and the record in this matter, IT IS 
ORDERED, pursuant to sections 1, 4(i), 4(j), 303(r), and 310(d) of the Communications Act of 1934, as 
amended, 47 U.S.C.  151, 154(i), 154(j), 303(r), 310(d), that this Memorandum Opinion and Order and 
Report and Order and the rule modifications included herein ARE ADOPTED, and that the Consolidated 
Application for Authority to Transfer Control of various Commission licenses and authorizations held by 
Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., and the associated supplemental 
application,560 ARE GRANTED subject to the condition that Applicants fulfill the voluntary 
commitments as set forth in Appendix B, which is incorporated by reference into this Memorandum 
Opinion and Order and Report and Order, as well as the additional conditions set forth herein.
181. IT IS FURTHER ORDERED that the above grants shall include authority for XM and 
Sirius consistent with the terms of this Memorandum Opinion and Order and Report and Order to 
acquire control of any license or authorization issued for any station during the Commissions 
consideration of the Application or the period required for consummation of the transaction.
  
558 Primosphere Motion to Consolidate at 1-2; see also Primosphere Petition at 3 (addressing the same issues as its 
Application for Review).
559 See 5 U.S.C.  605(b).
560 See supra n.1.
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182. IT IS FURTHER ORDERED that Applicants are required to comply with the 
Commissions broadcast EEO rules and policies set forth in 47 C.F.R.  73.2080.
183. IT IS FURTHER ORDERED that pursuant to sections 4(i), 4(j), and 310(d) of the 
Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j), 310(d), that the Petitions to Deny 
filed by American Women in Radio and Television; Common Cause, Consumer Federation of America, 
Consumers Union, and Free Press; Consumer Coalition for Competition in Satellite Radio; Forty-Six 
Broadcasting Organizations; Mt. Wilson FM Broadcasters, Inc.; The National Association of Black 
Owned Broadcasters, Inc.; National Association of Broadcasters; National Public Radio, Inc.; and The 
Telecommunications Advocacy Project ARE DENIED except to the extent otherwise indicated in this 
Memorandum Opinion and Order and Report and Order .
184. IT IS FURTHER ORDERED that pursuant to Sections 4(i), 4(j), and 310(d) of the 
Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j), 310(d), that the Petition for 
Declaratory Ruling filed by Michael Hartlieb IS DENIED.
185. IT IS FURTHER ORDERED that pursuant to Sections 4(i), 4(j), and 310(d) of the 
Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j), 310(d), that the Petitions to Defer 
Action filed by National Association of Broadcasters and U.S. Electronics, Inc. ARE DENIED.
186. IT IS FURTHER ORDERED that pursuant to Sections 4(i), 4(j), and 310(d) of the 
Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j), 310(d), that the Motion to 
Consolidate and the Petition filed by Primosphere Limited Partnership ARE DENIED.
187. IT IS FURTHER ORDERED that pursuant to Sections 4(i), 4(j), and 310(d) of the 
Communications Act of 1934, as amended, 47 U.S.C.  154(i), 154(j), 310(d), that the Petition to 
Designate Application for Hearing and the Motion to Designate and for Summary Decision filed by U.S. 
Electronics, Inc. ARE DENIED.
188. IT IS FURTHER ORDERED that this Memorandum Opinion and Order and Report and 
Order, including the repeal of the rule prohibiting one SDARS licensee from acquiring control of the 
other SDARS licensee, SHALL BE EFFECTIVE upon adoption.561
  
561 See 47 C.F.R.  1.4(b)(3).  Repeal of the merger prohibition in the Commissions 1997 SDARS Service Rules 
Order is a rule of particular applicability that is not subject to the Administrative Procedure Acts publication 
requirement, 5 U.S.C.  552(a)(1)(D); see supra,  162 (the prohibition against merger applies only to the two 
Applicants; it has no application beyond this proceeding.), and may be effective on adoption under the 
Commissions rules.  47 C.F.R.  1.4(b)(3), 1.103.  Further, the prohibitions repeal is not subject to the statutory 
30-day waiting period under the Administrative Procedure Act because it relieves a restriction.  
5 U.S.C.  553(d)(1).  In addition, the Congressional review procedures of Subtitle E of the Small Business 
Regulatory Enforcement Fairness Act of 1996, 5 U.S.C.  801, et seq., do not apply here because repeal of the 
merger prohibition is not a rule within the meaning of 5 U.S.C.  804(3)(A) (excluding from the definition of the 
term rule any rule of particular applicability, including a rule that approves or prescribes for the future rates, 
wages, prices, services, or allowances therefore, corporate or financial structures, reorganizations, mergers, or 
acquisitions thereof, or accounting practices or disclosures bearing on any of the foregoing).
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189. IT IS FURTHER ORDERED that the Commissions Consumer and Governmental 
Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Memorandum Opinion and 
Order and Report and Order, including the Final Regulatory Flexibility Analysis Certification, to the 
Chief Counsel for Advocacy of the Small Business Administration.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
Federal Communications Commission FCC 08-178
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APPENDIX A
Licenses to be Transferred
The Consolidated Application filed by XM and Sirius includes applications pertaining to the 
Commission authorizations and licenses listed below.  They are separated below by the type of 
authorization or license, and, within each category, listed by licensee/registrant name, application file 
number, call sign, and/or other service-specific information, as appropriate.  Interested parties should 
refer to the Consolidated Application for a more detailed listing of the authorizations or licenses.  Each of 
Applicants subsidiaries or affiliates may hold multiple authorizations or licenses of a particular type.  
Part 25  Satellite Communications
File No. Licensee/Registrant Call Signs
Satellite Space Stations
SAT-T/C-20070320-00054 XM Radio Inc. S2118
S2119
S2616
S26171
SAT-T/C-20070320-00053 Satellite CD Radio, Inc. S21052
S271
Satellite Earth Stations
SES-T/C-20070320-00380 XM Radio Inc. E000158
E000724
E040204
  
1 The following applications for special temporary authority (either pending or in effect) to operate terrestrial 
repeaters are associated with the XM Radio Inc. space stations:  SAT-STA-20010712-00063; SAT-STA-20020311-
00049; SAT-STA-20020815-00153; SAT-STA-20030325-00056; SAT-STA-20030409-00076; SAT-STA-
20031112-00371; SAT-STA-20031219-00373; SAT-STA-20050307-00056; SAT-STA-20050601-00113; SAT-
STA-20050712-00145; SAT-STA-20061002-00114; SAT-STA-20061013-00119;SAT-STA-20061013-00120; 
SAT-STA-20061114-00138; SAT-STA-20061211-00147; SAT-STA-20070205-00026; SAT-STA-20070222-
00036; SAT-STA-20070222-00037; SAT-STA-20070330-00059; SAT-STA-20070628-00091; SAT-STA-
20070628-00093; SAT-STA-20070706-00095; SAT-STA-20070706-00096; SAT-STA-20071012-00140; SAT-
STA-20071105-00148; SAT-STA-20071219-00178; SAT-STA-20080117-00026; SAT-STA-20080303-00056; 
SAT-STA-20080429-00094; SAT-STA-20080430-00095; SAT-STA-20080522-00111; SAT-STA-20080701-
00139, and SAT-STA-20080724-00146.
2 The following applications for special temporary authority (either pending or in effect) to operate terrestrial 
repeaters are associated with the Satellite CD Radio, Inc. space stations: SAT-STA-20010724-00064; SAT-STA-
20020222-00028; SAT-STA-20020312-00029; SAT-STA-20020312-00048; SAT-STA-20020827-00162; SAT-
STA-20020827-00248; SAT-STA-20030411-00075; SAT-STA-20030827-00299; SAT-STA-20031106-00370; 
SAT-STA-20031219-00369; SAT-STA-20040623-00119; SAT-STA-20040623-00122; SAT-STA-20050301-
00053; SAT-STA-20050601-00114; SAT-STA-20060623-00067; SAT-STA-20061013-00121; SAT-STA-
20061013-00122; SAT-STA-20061107-00131; SAT-STA-20061107-00132; SAT-STA-20061107-00133; SAT-
STA-20061107-00135; SAT-STA-20061207-00145; SAT-STA-20061208-00146; SAT-STA-20070327-00057;  
SAT-STA-20070710-00097; SAT-STA-20070719-00104; SAT-STA-20070928-00135; SAT-STA-20071213-
00174; SAT-STA-20071220-00179; SAT-STA-20080131-00034; SAT-STA-20080314-00071; SAT-STA-
20080530-00116; SAT-STA-20080530-00117, and SAT-STA-20080728-00151.
In addition, Satellite CD Radio (Sirius) has a pending application to modify its NGSO space station constellation 
(Call Sign S2105) by launching and operating FM-6, which will eventually replace Sirius two existing space 
stations, FM-1 and FM-2.  IBFS File No. SAT-MOD-20080521-00110.
Federal Communications Commission FCC 08-178
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SES-T/C-20070320-00379 Sirius Satellite Radio Inc. E040363
E060276
E060277
E990291
SES-T/C-20070625-00863 Sirius Satellite Radio Inc. E060363
Part 90- Wireless License
File No. Licensee Call Sign 
0002948781 Sirius Satellite Radio Inc. WPTX369
Part 5- Experimental License
File No. Licensee Call Sign
0004-EX-TC-2007 XM Radio Inc. WB2XCA
Federal Communications Commission FCC 08-178
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 APPENDIX B
Voluntary Commitments
June 13, 2008
The Honorable Kevin J. Martin
Chairman
Federal Communications Commission
445 12th Street, SW
Washington, D.C. 20554
Re: Consolidated Application for Authority to Transfer Control of XM Radio 
Inc. and Sirius Satellite Radio Inc., 
MB Docket No. 07-57
Dear Chairman Martin:
The record in the above-referenced proceeding provides clear evidence that the merger of 
Sirius Satellite Radio Inc. (Sirius) and XM Satellite Radio Holdings Inc. (XM) will benefit 
consumers and should therefore be approved promptly and without conditions.  Sirius and XM 
have demonstrated that consumers will benefit substantially and the public interest will be served 
by approval of this transaction.  The Commission should not impose conditions in this 
proceeding that will have the effect of reducing these public interest benefits.
Nevertheless, this letter is to inform you that, if the merger is approved, the combined 
company will implement the voluntary commitments listed below.  These commitments are 
being made to further demonstrate that the merger is in the public interest and in the interest of 
facilitating the speediest possible approval of the merger by the Commission. 
Programming. 
1. A La Carte Programming:  The combined company will offer the following a la carte 
programming options:
 50 Channels will be available for $6.99 a month and will allow consumers to choose 
either 50 Sirius channels from approximately 100 Sirius channels or 50 XM channels 
from approximately 100 XM channels.  Additional channels can be added for 25 cents 
each, with premium programming priced at additional cost.  However, in no event will a 
customer subscribing to this a la carte option pay more than $12.95 per month for this 
programming.
 100 Channels will be available on an a la carte basis for $14.99 a month.  This a la carte 
option will allow Sirius customers to choose from the Sirius programming line-up and 
some of the best of XMs programming, and XM customers to choose from the XM 
programming line-up and some of the best of Sirius programming.
Federal Communications Commission FCC 08-178
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Within three months of the consummation of the pending merger, the first a la carte-capable 
radios will be introduced in the retail after-market and the combined company will commence 
offering a la carte programming.
2. Best of Both Programming:  Within three months of the consummation of the pending 
merger, the combined company will offer customers the ability to receive the best of both 
Sirius and XM programming.  Current XM customers will continue to receive their existing 
XM service, and be able to obtain select Sirius programming.  Likewise, current Sirius 
customers will continue to receive their existing Sirius service, and be able to obtain select XM 
programming.  This best of programming will be the same best of programming included 
as part of the 100 Channel A La Carte offering, and will be available at a monthly cost of 
$16.99.
3. Mostly Music or News, Sports and Talk Programming:  Within three months of the 
consummation of the pending merger, customers will have the option of choosing an option of 
mostly music programming.  Subscribers will also be able to choose an option of news, 
sports and talk programming.  Each of these programming options will be available on existing 
satellite radios at a cost of $9.99 per month.
4. Discounted Family-Friendly Programming: Within three months of the consummation of the 
pending merger, consumers will be able to purchase a family-friendly version of existing 
Sirius or XM programming at a cost of $11.95 a month, representing a credit of $1.00 per 
month.  Current Sirius customers will also be able to choose a family-friendly version of Sirius 
programming that includes select XM programming, and current XM customers can choose a 
family-friendly XM programming option that includes select Sirius programming.  This 
programming will cost $14.99 per month, representing a credit of $2.00 per month from the 
cost of the best of programming.  
These programming options were previously described in the companies July 24, 2007 joint filing and 
are subject to individual channel changes in the ordinary course of business and, in the case of certain 
programming, the consent of third-party programming providers.
Public Interest and Qualified Entity Channels.  The combined company will set aside 4 percent of the 
full-time audio channels1 on the Sirius platform and on the XM platform, respectively, which currently 
represents six channels on the Sirius platform and six channels on the XM platform, for noncommercial, 
educational and informational programming within the meaning of 47 C.F.R  25.701(f)(2) of the DBS 
set aside rules.
In addition, within four months of the consummation of the merger, the combined company will enter 
into long-term leases or other agreements to provide a Qualified Entity or Entities2 rights to four percent 
of the full-time audio channels on the Sirius platform and on the XM platform, respectively; which again 
currently represents six channels on the Sirius platform and six channels on the XM platform.  As digital 
compression technology enables the company to broadcast additional full-time audio channels, the 
  
1 Full-time audio channels mean the aggregate number of channels of music, news, sports, entertainment or audio 
programming broadcast on a continuous basis, 24 hours a day, seven days a week, plus part-time channels 
aggregated on a full-time equivalent basis, on the Sirius platform or the XM platform, as the case may be.
2 A Qualified Entity includes any entity that is majority-owned by persons who are African American, not of 
Hispanic origin; Asian or Pacific Islanders; American Indians or Alaskan Natives; or Hispanics.
Federal Communications Commission FCC 08-178
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combined company will ensure that four percent of full-time audio channels on the Sirius platform and 
the XM platform are reserved for a Qualified Entity or Entities; provided that in no event will the 
combined company reserve fewer than six channels on the Sirius platform and six channels on the XM 
platform.
The Qualified Entity or Entities will not be required to make any lease payments for such channels.  The 
combined company is willing not to be involved in the selection of the Qualified Entity or Entities.  The 
combined company will have no editorial control over these channels.
Equipment.  The merged company will permit any device manufacturer to develop equipment that can 
deliver the companys satellite radio service.  Device manufacturers will also be permitted to incorporate 
in satellite radio receivers any other technology that would not result in harmful interference with the 
merged companys network, including hybrid digital (HD) radio technology, iPod ports, internet 
connectivity, or other technology.  This principle of openness will serve to promote competition, protect 
consumers, and spur technological innovation.  Within one year following the consummation of the 
merger, the combined company shall offer for license, on commercially reasonable and non-
discriminatory terms, the intellectual property it owns and controls of the basic functionality of satellite 
radios that is necessary to independently design, develop and have manufactured satellite radios (other 
than chip set technology, which technology includes its encryption and conditional access keys) to any 
bona fide third party that wishes to design, develop, have manufactured and distribute subscriber 
equipment compatible with the Sirius system, the XM system, or both.  Chip sets for satellite radios may 
be purchased by licensees from manufacturers in negotiated transactions with such manufacturers.  Such 
technology license shall contain commercially reasonable terms, including, without limitation, 
confidentiality, indemnity and default obligations; require the licensee to comply with all existing and 
applicable law, including the rules and regulations of the Federal Communications Commission and 
applicable copyright laws of the United States; and require the licensee and qualified manufacturer to 
satisfy technical and quality assurance standards and tests established by the combined company from 
time to time and applicable to licensees and qualified manufacturers.  Further, the merged company will 
not execute any agreement or take any other action that would bar, or have the effect of barring, a car 
manufacturer or other third party from including non-interfering HD radio chips, iPod compatibility, or 
other audio technology in an automobile or audio device.  Each licensee shall be responsible for, and bear 
all costs associated with, the design, development, manufacturing, including parts procurement, logistics, 
warranty, sales, marketing, and distribution of such satellite radios.
Service to Puerto Rico.  Within three months of the consummation of the merger, the combined company 
will file the necessary applications to provide the Sirius satellite radio service to the Commonwealth of 
Puerto Rico using terrestrial repeaters and will, upon grant of the necessary permanent authorizations, 
promptly introduce such satellite radio service to the Commonwealth.
Interoperable Receivers.  Within one year of the consummation of the merger, the combined company 
will offer for sale an interoperable receiver in the retail after-market.
Rates. The combined company will not raise the retail price for its basic $12.95 per month subscription 
package, the a la carte programming packages described in paragraph 1 of this letter, and the new 
programming packages described in paragraphs 2, 3 and 4 of this letter for thirty six months after 
consummation of the merger.  Notwithstanding the foregoing, after the first anniversary of the 
consummation of the merger, the combined company may pass through cost increases incurred since the 
filing of the combined companys FCC merger application as a result of statutorily or contractually 
required payments to the music, recording and publishing industries for the performance of musical works 
and sound recordings or for device recording fees.  The combined company will provide customers, either 
on individual bills or on the combined companys website, specific costs passed through to consumers 
Federal Communications Commission FCC 08-178
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pursuant to the preceding sentence.
If you have any questions, please do not hesitate to contact us.
Sincerely,
Richard E. Wiley Robert L. Pettit
Counsel for Sirius Satellite Radio Inc.
Gary M. Epstein James H. Barker
Counsel for XM Satellite Radio Holdings Inc.
cc: Commissioner Michael J. Copps
Commissioner Jonathan S. Adelstein
Commissioner Deborah Taylor Tate
Commissioner Robert M. McDowell
Federal Communications Commission FCC 08-178
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July 25, 2008 
The Honorable Kevin J. Martin
The Honorable Michael J. Copps
The Honorable Jonathan S. Adelstein
The Honorable Deborah Taylor Tate
The Honorable Robert M. McDowell
Federal Communications Commission
445 12th Street, SW
Washington, D.C. 20554
Re: Consolidated Application for Authority to Transfer Control of XM Satellite Radio 
Holdings Inc. and Sirius Satellite Radio Inc., MB Docket No. 07-57
Dear Mr. Chairman and Commissioners:
The record in the above-referenced proceeding provides clear evidence that the merger of Sirius 
Satellite Radio Inc. (Sirius) and XM Satellite Radio Holdings Inc. (XM) will benefit consumers and 
should therefore be approved promptly and without conditions.  Sirius and XM have demonstrated that 
consumers will benefit substantially and the public interest will be served by approval of this transaction.  
The Commission should not impose conditions in this proceeding that will have the effect of reducing 
these public interest benefits.  Sirius and XM have already agreed, in a June 13, 2008 letter, to implement 
voluntary commitments that leave no doubt that this merger is in the public interest.1
Nevertheless, this letter is to inform you that, if the merger is approved, the combined company 
will implement the voluntary commitments described below, which supplement or clarify the voluntary 
commitments described in the companies June 13, 2008 letter.  As with the prior voluntary 
commitments, these commitments are being made to further demonstrate that the merger is in the public 
interest and in the interest of facilitating the speediest possible approval of the merger by the 
Commission.
Satellite Radio Terrestrial Repeater/WCS Proceedings. The Commission first commenced a 
proceeding to establish rules for satellite radio terrestrial repeaters in 1997.2 The successor to 
that original proceeding is still pending.3 Sirius and XM have participated at every step of those 
proceedings in good-faith; the companies have submitted thousands of pages of pleadings, 
  
1  See Letter to Kevin J. Martin, Chairman, FCC from Richard E. Wiley, Counsel to Sirius and Gary M. Epstein, 
Counsel to XM, MB Dkt. No. 07-57 (filed June 16, 2008) (Voluntary Commitments).
2  Establishment of Rules and Policies for the Digital Audio Radio Service in the 2310-2360 MHz Band, Report and 
Order, Memorandum Opinion and Order, and Further Notice of Proposed Rulemaking, 12 FCC Rcd 5754 (1997).
3  Amendment of Part 27 of the Commissions Rules to Govern the Operation of Wireless Communications Services 
in the 2.3 GHz Band, Establishment of Rules and Policies for the Digital Audio Radio Satellite Service in the 2310-
2360 MHz Frequency Band, WT Docket No. 07-293, IB Docket No. 95-91, Notice of Proposed Rulemaking and 
Further Notice of Proposed Rulemaking, 22 FCC Rcd 22123 (2007).
Federal Communications Commission FCC 08-178
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several engineering studies and even proposed rules.4 Sirius and XM believe that testing with 
FCC oversight can quickly bring these proceedings to a conclusion.  Accordingly, the combined 
company will commit to provide the Commission whatever assistance it requests to allow the 
Commission to oversee such testing and resolve these proceedings by the end of 2008.
Interoperable Receivers. Sirius and XM clarify that immediately after the merger, the combined 
company will make the design and the specifications for an interoperable radio available for 
license to equipment manufacturers in accordance with the companies commitment contained in 
Sirius and XMs June 13, 2008 ex parte letter.  Moreover, within nine months of the 
consummation of the merger, the combined company will offer for sale an interoperable receiver 
in the retail after-market.  This accelerates the companies previous voluntary commitment to do 
so within one year.
Local Programming and Advertising.  Sirius and XM have committed, and reiterate their 
commitment, not to originate local programming or advertising through their repeater networks.5
Copyright Royalty Payments.  In accordance with the Copyright Act, both Sirius and XM pay 
millions of dollars in royalties in connection with their public performance of sound recordings.6
The combined companys a la carte and other programming proposals were not intended, and are 
not anticipated, to reduce revenue from copyright royalty payments.  They were designed to 
provide more choice and lower prices and hopefully increase revenue, which should have a 
positive effect on copyright royalty payments to artists and record companies.
Rates. Sirius and XM clarify that the combined companies June 13, 2008 Rates voluntary 
commitment establishes a price freeze lasting thirty-six months for the combined companys basic $12.95 
per month subscription package, the a la carte programming packages described in paragraph 1 of the 
June 13, 2008 letter, and the new programming packages described in paragraphs 2, 3, and 4 of the June 
13, 2008 letter, except for a pass through of certain cost increases.  This does not affect any FCC authority 
to review this price freeze prior to its expiration.
Equipment Non-Exclusivity.  Sirius and XM have not entered into any agreement that would bar, or have 
the effect of barring, a car manufacturer or other third party from including non-interfering HD radio 
chips, iPod compatibility, or other audio technology in an automobile or audio device.  Sirius and XM 
have not entered into any agreement to grant, or that has the effect of granting, a device manufacturer an 
exclusive right to manufacture, market and sell equipment that can deliver the companys satellite radio 
service. Following the consummation of the merger, the combined company will not enter into any 
agreement that grants, or that would have the effect of granting, a device manufacturer an exclusive right 
to manufacture, market and sell equipment that can deliver the companys satellite radio service.  This 
supplements XMs and Sirius June 13, 2008 voluntary commitment.  Sirius and XM also clarify their 
June 13 letter that they will provide, on commercially reasonable terms, the intellectual property to 
permit any device manufacturer to develop equipment that can deliver the company's satellite radio 
  
4  Neither Sirius, XM nor, to the knowledge of the companies, the FCC has ever received an interference complaint 
from a WCS licensee relating to a satellite radio terrestrial repeater.
5  See Sirius Satellite Radio Inc., DA 01-2171,  10-11 (Sept. 17, 2001); XM Radio Inc., DA 01-2172,  10-11 
(Sept. 17, 2001).
6 17 U.S.C.  106(6); 114(d)(2); 114(f)(1).  
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service.  The encryption, conditional access and security technology is embedded in chip sets that can be 
purchased from third party manufacturers.
Public Interest Channel Set Asides. To clarify the commitment contained in Sirius and XMs June 13, 
2008 letter, Sirius and XM will not select a programmer to fill more than one non-commercial, 
educational or informational channel on each of the Sirius and XM platforms as long as demand for such 
channels exceeds available supply.
If you have any questions, please do not hesitate to contact us.
Sincerely,
/s/ Richard E. Wiley
Richard E. Wiley
Counsel for Sirius Satellite Radio Inc.
/s/ Gary M. Epstein
Gary M. Epstein
Counsel for XM Satellite Radio Holdings Inc.
Federal Communications Commission FCC 08-178
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APPENDIX C
Timeline of Commitments1
* Immediately upon consummation of the merger:
 The combined company must offer for license, on commercially reasonable and non-
discriminatory terms, the intellectual property it owns and controls of the basic 
functionality of satellite radios that is necessary to independently design, develop and 
have manufactured satellite radios (other than chip set technology, which technology 
includes its encryption and conditional access keys) to any bona fide third party that 
wishes to design, develop, have manufactured and distribute subscriber equipment 
compatible with the Sirius system, the XM system, or both.  In addition, Applicants will 
not bar, by agreement or otherwise, a car manufacturer or other third parties from 
including non-interfering HD Radio chips, iPod compatibility, or other audio technology 
in an automobile or audio device.  Therefore, Applicants are prohibited from taking any 
action that would thwart, hinder, or obstruct any receiver manufacturer, 
automobile manufacturer, or chip manufacturer from including HD Radio technology in 
SDARS receivers.  We note that this commitment serves to prohibit Applicants from 
entering into exclusive contracts with parties that control the chip set and encryption 
technology.
 The combined company shall not raise the retail price for its basic $12.95 per month 
subscription package, the a la carte programming packages, and the new programming 
packages nor reduce the number of channels in either their current packages or new 
packages for at least 36 months.  Six months prior to the expiration of the commitment 
period, the Commission will seek public comment on whether the cap continues to be 
necessary in the public interest.  The Commission will then determine whether it should 
be modified, removed, or extended.  After the first anniversary of the consummation of 
the merger, the combined company may pass through cost increases incurred since the 
filing of the combined companys FCC merger application as a result of statutorily or 
contractually required payments to the music, recording and publishing industries for the 
performance of musical works and sound recordings or for device recording fees.
 The combined company must make available 4 percent of the full-time audio channels on 
the Sirius platform and on the XM platform, respectively, which currently represents six 
channels on the Sirius platform and six channels on the XM platform, for noncommercial 
educational and informational programming provided by programmers that satisfy the 
qualifications set forth in 47 C.F.R  25.701(f)(2) of the DBS set aside rules.  
Programming provided pursuant to this set-aside requirement must be available to the 
public no later than six months after the transactions consummation.  In fulfilling this 
commitment, the combined company shall adhere to the additional requirements set forth 
in the Order.
  
1 We also are conditioning our approval of the transaction on the merged entitys continuing adherence to the other 
commitments and conditions, as specified herein, which continue indefinitely.  The descriptions of the commitments 
and timeframes identified in this Appendix C are for informational purposes only and are not necessarily exhaustive.  
The Order, which incorporates the voluntary commitments set forth in Appendix B, specifies the precise terms and 
timeframes of the conditions adopted.  Should there be any omissions in this Appendix or inconsistencies between 
this Appendix and the Order, the language in the Order will prevail.
Federal Communications Commission FCC 08-178
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* Within three months of consummation of the merger:
 The first a la carte-capable radios must be introduced in the retail after-market and the 
combined company must begin offering a la carte programming.
 The combined company must offer customers the ability to receive the best of both Sirius 
and XM programming at a monthly cost of $16.99.
 Customers must have the option of choosing an option of mostly music programming 
and an option of news, sports and talk programming at a monthly cost of $9.99 for each 
of these programming options.
 Consumers must be able to purchase a family-friendly version of existing Sirius or XM 
programming at a cost of $11.95 a month, representing a credit of $1.00 per month.  
Current Sirius customers must also be able to choose a family-friendly version of Sirius 
programming that includes select XM programming, and current XM customers must be 
able to choose a family-friendly XM programming option that includes select Sirius 
programming.  This programming will cost $14.99 per month, representing a credit of 
$2.00 per month from the cost of the best of programming.
 The combined company must file applications with the Commission to provide the Sirius 
satellite radio service to the Commonwealth of Puerto Rico using terrestrial repeaters and 
must promptly introduce such service upon grants of permanent authority by the 
Commission to operate these repeaters.
* Within four months of consummation of the merger:
 The combined company must enter into long-term leases or other agreements to provide a 
Qualified Entity or Entities rights to 4 percent of the full-time audio channels on the 
Sirius platform and on the XM platform, respectively, which currently represents six 
channels on the Sirius platform and six channels on the XM platform.  As digital 
compression technology enables the company to broadcast additional full-time audio 
channels, the combined company must ensure that 4 percent of full-time audio channels 
on the Sirius platform and the XM platform are reserved for a Qualified Entity or 
Entities; provided that in no event will the combined company reserve fewer than six 
channels on the Sirius platform and six channels on the XM platform.
* Within nine months of consummation of the merger:
 The combined company must offer for sale an interoperable receiver in the retail after-
market.
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STATEMENT OF 
CHAIRMAN KEVIN J. MARTIN
Re:  Applications for Consent to the Transfer of Control of Licenses, XM Satellite Radio Holdings Inc., 
Transferor, to Sirius Satellite Radio Inc., Transferee, MB Docket No. 07-57.
The applications of XM and Sirius satellite radio to merge did not present the Commission with an easy 
case.  When the Commission originally issued each company its license, the Commission determined that 
it would not be in the public interest for the same company to hold both licenses.  Yet that is exactly what 
XM and Sirius asked to do.
I said at the time that the two companies announced their intent to merge that I thought they had a high 
hurdle to meet if they wanted to prove that the transaction would be in the public interest.  It has taken 
some time, but I do believe that with the essential voluntary commitments they have made, the parties 
have met this burden.  
In particular, I commend the parties for committing to offer consumers more choice and flexibility in how 
they purchase channels.  I have long believed that consumers should be able to buy and pay for only those 
channels that they want.  Such a free market approach to programming  whether its music or television 
would benefit consumers through lower prices and more control.  Consumers will be able to enjoy the 
best of programming on both services and pick and choose channels at lower prices.  With these options 
as well as the companies agreement not to raise prices for three years, consumers should be better off as 
a result of this merger.  
I am pleased that the parties have committed to offering consumers, for the first time, with a specific 
percentage of diverse programming.  The two companies have agreed to dedicate eight percent of their 
channels -- 24 channels in total -- to minority and public access programming.  This will create greater 
opportunities for more voices to be heard on satellite radio, covering the issues that are important to those 
communities that may have traditionally been ignored in the past.  
I also support the parties commitment to an open technical standard that will allow for a competitive 
market to develop for radios that carry the satellite radio signals.  Any device manufacturer will be able to 
develop satellite receivers and to incorporate other technology, such as HD radio, iPod ports, and Internet 
connectivity so long as it will not result in harmful interference with the merged company's network.  
Finally, I support the Commission soon issuing a notice of inquiry to gather more information about 
whether HD chips or any other audio technology should be included in all satellite radio receivers.  
In conjunction with this merger, I directed Commission staff to negotiate a Consent Decree resolving the 
two companies numerous violations regarding the placement and technical properties of their radios and 
repeaters.  I believed these violations to be significant, and was unwilling to support proposed fines that I 
did not believe held the companies accountable for their disregard for the Commissions rules.  I am 
pleased that the companies eventually agreed to fines collectively totaling approximately $19.6 million.  
The Commission will continue to monitor the combined company to ensure that it operates in the public 
interest and in accordance with all of our rules.
Federal Communications Commission FCC 08-178
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DISSENTING STATEMENT OF
COMMISSIONER MICHAEL J. COPPS
Re:  Applications for Consent to the Transfer of Control of Licenses, XM Satellite Radio Holdings Inc., 
Transferor, to Sirius Satellite Radio Inc., Transferee, MB Docket No. 07-57.
The majoritys own findings provide a compelling case for rejecting this merger:
(1) We must assume that this is a merger to monopoly;2
(2) The merged company will possess the incentive and ability to impose monopoly price hikes 
on consumers;3
(3) Consumers will need protection for the foreseeable future because (a) the merged companys 
incentive and ability to impose monopoly price hikes will only grow over time,4 and (b) the 
emergence of another satellite radio competitor is unlikely;5 and
(4) The pricing restrictions imposed on the merged company will expire in three years.6  
The inescapable logic of the majoritys findings is that by 2011 satellite radio subscribers will 
face monopoly price hikes by a company with the incentive and ability to impose them.7 No one has been 
able to explain to me how this could possibly serve the public interest.8
The majoritys argument is that it can stack up enough conditions on the merged entity
spectrum set-asides, price controls, manufacturing mandates, etc.to tip the scale in favor of approval.  
In essence, the majority asserts that satellite radio consumers will be better served by a regulated 
monopoly than by marketplace competition.  I thought that debate was settledas did a unanimous 
Commission in 2002 when it declined to approve the proposed merger between DirecTV and Echostar:
In essence, what Applicants propose is that we approve the replacement of viable facilities-based 
competition with regulation. This can hardly be said to be consistent with either the 
Communications Act or with contemporary regulatory policy and goals, all of which aim at 
replacing, wherever possible, the regulatory safeguards needed to ensure consumer welfare in 
communications markets served by a single provider, with free market competition, and 
  
2 See Order at  47-50 (finding that the Commission must presume that satellite radio constitutes a single, national 
product market, and that the proposed merger is a merger to monopoly).
3 Id. at  5, 50.
4 Id. at  54, 104.
5 Id. at  5, 49.
6 Id. at  107.  The majoritys statement that the FCC will review the price cap before the three-year period expires is 
little more than a fig leaf.  It permits the majority to imply that it is not leaving consumers completely unprotected in 
2011, while leaving all of the difficult decisions to a future Commission.  That Commission will scarcely appreciate 
the Hobsons choice we are bestowing on them:  let the price caps expire in the face of a monopoly provider or 
impose a new system of rate regulation on an industry that has never had one in the past.
7 The price cap adopted by the majority permits certain costs to be passed through to consumers even during the 
three-year period.  To the extent that occurs, even the three-year price controls could prove illusory.
8 None of the remaining conditions address this fundamental consumer harm and I therefore do not address them at 
length.  I would note, however, that many of them are chock-full of holes and/or limitations that could render them 
meaningless. 
Federal Communications Commission FCC 08-178
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particularly with facilities-based competition. Simply stated, the Applicants proposed remedy is 
the antithesis of the 1996 Acts pro-competitive, de-regulatory policy direction.9
That preference for competition is why the Commission has almost never permitted a single 
commercial licensee to hold all of the spectrum allocated to a particular service, and why (until today) the 
Commission required that there always be at least two satellite radio licensees.  I understand why the 
companies would prefer to escape the rigors of competition.  What I cannot understand is why the 
majority thinks consumers will be better off without it. 
Some may say that the majority isnt really permitting a merger-to-monopoly because satellite 
radio is part of a larger audio entertainment market that includes iPods, terrestrial radio, and a plethora of 
new technologies that everyone knows are just around the corner.  But that is not the majoritys 
position.  The majority finds that no one has proved that the relevant product market includes anything 
other than satellite radio and that competitive entry is unlikely for the foreseeable future.  So the majority 
itself takes the argument away.
Others may say that whether the combined entity is a monopoly is beside the point because one or 
both of them would not survive anywayso theres no harm in letting them merge.  But the merging 
companies do not seek approval on the basis of financial distress and the majority makes no findings in 
that regard.  So this claim is not before us.  I have said many times that I am willing to consider mergers 
where financial viability is at stake.  But thats not this merger.  We must assume that the marketplace can 
support two financially viable competitors.
I have said from the outset that approving this merger would be a steep climb for me.  It proved to 
be just that.  In the end, after cutting through all the heat and noise and lobbying this proceeding has 
generated, we are left with the unshakable reality of a merger-to-monopoly in a market that could sustain 
competition.  I can find no precedent or public interest justification for that outcome.  I dissent.
  
9 Application of EchoStar Communications Corporation, General Motors Corporation, and Hughes Electronics 
Corporation; and EchoStar Communications Corporation, 17 FCC Rcd 20559, 20665 (2002).
Federal Communications Commission FCC 08-178
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DISSENTING STATEMENT OF
COMMISSIONER JONATHAN S. ADELSTEIN
Re:  Applications for Consent to the Transfer of Control of Licenses, XM Satellite Radio Holdings Inc., 
Transferor, to Sirius Satellite Radio Inc., Transferee, MB Docket No. 07-57.
Sirius and XM (collectively the Applicants) currently offer dynamic and competitive audio 
programming to consumers.  Their marketplace competition with each other has undoubtedly contributed 
to their cutting edge appeal.  It also has exacerbated their difficult financial circumstances, as they have 
competed for compelling programming and driven up the costs for each other dramatically.  Partly in 
response to this one-upmanship, which has improved the quality of programming and benefited 
consumers, the Applicants have sought to merge rather than compete.  
It is precisely because the Applicants provide such a valuable service to consumers that it was 
critical for the Commission to respond appropriately to their dramatic effort to combine.  They both now 
provide an outstanding service that their subscribers find extremely engaging.  They employ creative and 
innovative talent who put on shows that many of their subscribers cannot easily live without.  I truly hope 
the merged entity succeeds, and maintains its edge, and does not become a fat and happy monopoly.  
I was hoping we could achieve a bipartisan consensus that would offer consumers more diversity 
in programming, better price protection, greater choices among innovative devices and real competition 
with digital terrestrial radio.  Disappointingly, that was not accomplished.  Instead, consumers will get a 
monopoly with window dressing.  And, the dream of greater women and minority participation in media 
will be deferred once again.
It is not just me who considers this a monopoly.  On that point, the majority and I do agree.  The 
entire Order is appropriately premised on the reality that this is a merger to monopoly.1 Rather than 
accept the Applicants broad definition of the market, todays Order defines the market narrowly and, 
thus, deliberately endows the Applicants with a monopoly over the entire licensed satellite radio service.  
To do so, the majority repeals the existing safeguard prohibiting the common ownership of the two 
satellite radio licenses, and instead relies on nominal conditions.2  Incredibly, the merged entity will now 
have more spectrum than the AM and FM bands combined.  Given the inadequacy of the merger 
conditions, this decision better serves the Applicants self-interest rather than the public interest, so I am 
unable to support it.  
The instant order follows in the wake of the Department of Justice (the DOJ) Antitrust 
Divisions questionable decision to close its investigation of the merger without requiring any conditions.3  
The DOJ explained that it could not find that such a merger would substantially lessen competition, in 
part, because of a lack of competition between the parties even without the merger. Thus, the DOJ 
  
1 Order at  47-50.
2 Establishment of Rules and Policies for the Digital Audio Radio Satellite Service in the 2310-2360 MHz
Frequency Band, 12 FCC Rcd 5754, 5823  170 (1997) (stating, under a subheading entitled Safeguards, that 
[e]ven after DARS licenses are granted, one licensee will not be permitted to acquire control of the other remaining 
satellite DARS license[,] and that [t]his prohibition on transfer of control will help assure sufficient continuing 
competition in the provision of satellite DARS service.).
3 DOJ Press Release, Statement of the Department of Justice Antitrust Division on its Decision to Close its 
Investigation of XM Satellite Radio Holdings Inc.s Merger with Sirius Satellite Radio Inc. (Mar. 24, 2008), 
available at http://www.usdoj.gov/opa/pr/2008/March/08_at_226.html. 
Federal Communications Commission FCC 08-178
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concluded that the merger would not make matters much worse  hardly consolation for consumers.  
Ostensibly, the DOJ relied on two key premises in reaching its decision: long-term sole source 
contracts with automobile manufacturers and the lack of an interoperable radio. Even though the DOJ 
acknowledged that the Applicants competed on the terms of automotive contracts, including the amount 
of equipment subsidization, it readily dispensed with this consumer benefit, because many of the sole-
source contracts were locked up for extended periods.  Further lack of competition between the 
Applicants was explained by their decision not to bring an interoperable radio to market despite a 
Commission requirement to do so.  It is ironic that the DOJ relied on the Applicants failure to comply 
with the interoperability mandate as a justification for the merger.  The DOJ also gave the Applicants a 
pass on the financial interests and corporate directorships held by major automotive manufacturers in the 
Applicants businesses and the merged entitys future business.  While more analysis is needed, this 
relationship presents a potential for discrimination against the installation of competitive technologies in 
the automotive sector going forward.  
In contrast to antitrust review, where the DOJ would have borne the burden of proving that the 
proposed transaction substantially lessens competition,4 the Commissions standard of review requires 
merger applicants to prove that the transaction will serve the greater public interest, informed by the core 
values of competition, diversity and localism.5 Yet, the Applicants have not even provided the 
Commission with sufficient evidence to perform a structural market analysis that would allow us to and 
predict the likelihood of competitive harm.
In the Order, the majority assumes the worst-case scenario, specifically that satellite radio has 
no real competitors and that the proposed transaction represents a merger to monopoly.  In adopting this 
approach, the majority professes to create a high public interest standard by subjecting the merger 
application (with the Applicants retaining the burden of proof) to the most exacting scrutiny.  Granting 
the merger under this approach should require significant conditions, proportional to the significant public 
interest harm assumed, in order to mitigate the extreme concentration of market power.  Regrettably, the 
majoritys acceptance of the Applicants voluntary commitments fails to meet this professed 
prophylactic public interest standard because of gaping loopholes in them.
Price Cap. Though the Applicants have committed not to raise the retail rates on their existing 
and newly proposed programming packages for three years after the consummation of the merger, the 
Order fails to justify why the three-year period is sufficient and merely adopts the Applicants terms and 
conditions.  Although the majority is unable to identify competitors likely to constrain the merged entitys 
ability to raise prices, it is unwilling to impose a meaningful price cap for a reasonable period of time.
Even during the three-year period itself, the merged entity could evade or undermine this 
consumer protection in several significant respects. The manner in which this condition is crafted suffers 
from a myopic perception of satellite radio pricing.  Retail rates of programming packages constitute only 
one element in the ultimate price of satellite radio service.  The item completely overlooks additional 
implicit pricing elements of the service, such as equipment subsidies,6 ancillary services,7 activation fees,8
  
4 15 U.S.C.  18.
5 47 U.S.C.  310(d).
6 See HD Radio infra.
7 For example, Sirius presently provides an Internet radio service to subscribers for either no additional charge or an 
additional $2.99 per month, depending on the quality of the audio.  Sirius Internet Radio, 
(continued.)
Federal Communications Commission FCC 08-178
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termination fees,9 and transfer fees,10 all of which the merged entity could manipulate to undermine the 
consumer protection intent of the price cap. It also fails to adequately address the concern that the 
merged entity may have the incentive and ability to raise real prices by reducing content quality, either by 
increasing advertising or through other means.  Sirius Chief Executive Officer Mel Karmazin has stated 
as much, declaring to investors that the post-merger advertising line is going to contribute significantly 
in the future towards [average revenue per user].11 Consumers might as well prepare for a barrage of 
new commercials, because now they will have nowhere else to turn if they want satellite radio service.
Additionally, the merged entity could evade the price cap by siphoning off programming from the 
capped packages to new and presumably uncapped packages.12 Indeed, not only do both Applicants
already have service clauses to this effect, but they assert that the proposed programming options  are 
subject to individual channel changes in the ordinary course of business and, in the case of certain 
programming, the consent of third-party programming providers.13 While the decision imposes a floor 
on the number of channels in the existing and proposed programming packages, the Applicants are left to 
exploit a loophole to siphon off high-quality channels to unregulated tiers while replacing them with 
lower cost, and possibly lower quality, channels.  Thus, while this approach would maintain the same 
quantity of channels, it cannot guarantee consumers the same or better quality of programming.  
(Continued from previous page)    
http://www.sirius.com/siriusinternetradio.  XM presently provides a similar, though not identically structured, 
Internet radio service to subscribers.  See XM Radio Online, http://xmro.xmradio.com/xstream/index.jsp. 
8 Sirius currently charges a one-time $15.00 fee to activate, reactivate, upgrade or modify each Satellite Radio 
Service Subscription.  Sirius Terms and Conditions, http://shop.sirius.com.  XM charges a similar activation fee of 
undisclosed amount.  XM Customer Agreement, http://www.xmradio.com/about/customer-service-agreement.xmc
(For each XM Radio on your account, we may charge you a fee to activate, upgrade or modify your Radio 
Services. The addition of premium channels or services, if any, may require an additional activation fee. The fee is 
payable with your first subscription fee payment.).
9 Sirius currently charges a $75 termination fee if you cancel a one-year or longer Subscription during the first year 
of service.  Sirius Terms and Conditions, http://shop.sirius.com.  XM charges a termination fee of undisclosed 
amount.  XM Customer Agreement, http://www.xmradio.com/about/customer-service-agreement.xmc (From time 
to time, we may offer the Services on an annual or other multi-month commitment basis. In such events, you agree 
to make payments for Services to be received and that are ordered by you in accordance with the terms of the 
applicable billing plan that you agree to, including, without limitation, payments of any early termination fees if you 
terminate your Services prior to the end of such commitment period.).
10 Sirius currently charges a $75 transfer fee [i]f you transfer a lifetime Satellite Radio Service Subscription from 
one Receiver to another or from one person to another.  Sirius Terms and Conditions, http://shop.sirius.com.  It is 
unclear whether or not XM charges a similar transfer fee or whether transfer is even permitted.  See XM Customer 
Agreement, http://www.xmradio.com/about/customer-service-agreement.xmc.
11 Investor Presentation, Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. (Feb. 20, 2007) (transcript 
available at http://www.sec.gov/Archives/edgar/data/908937/000095012307002469/y30604be425.htm).
12 Sirius Terms and Conditions, http://shop.sirius.com (Accordingly, we reserve the unrestricted right to change, 
rearrange, add, or delete programming, including canceling, moving or adding particular channels, at any time, with 
or without notice to you.); XM Customer Agreement, http://www.xmradio.com/about/customer-service-
agreement.xmc (XM reserves the right to change programming on either or both [XM Radio Online and XM 
Radio] Services at any time and without notice, at our sole discretion, including canceling, modifying, moving or 
adding particular channels, with or without notice to you.). 
13 Letter from Richard E. Wiley, Robert L. Pettit, Wiley Rein LLC, Counsel for Sirius Satellite Radio Inc., and Gary 
M. Epstein, James H. Barker, Latham & Watkins LLP, Counsel for XM Satellite Radio Holdings Inc., to Kevin J. 
Martin, Chairman, FCC at 5 (June 13, 2008) (Applicants June 13, 2008 Ex Parte).
Federal Communications Commission FCC 08-178
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Precedent for this type of strategic behavior exists in the previous attempts to regulate cable rates.14  
The Order provides an explicit loophole to the so-called price cap by allowing the merged 
entity to pass through statutory or contractual programming costs to the consumer one year after the 
merger is complete.15 While the genesis of this exception is left unexplained, the winners and losers are 
apparent.  The Applicants benefit by passing the cost on to the consumer.  And of course, consumers will 
be left to find out about these programming costs through increases in their bills. 
Finally, even assuming the success of the price cap, there is nothing to prevent the merged entity 
from instantaneously increasing retail prices once it expires.  To remedy this oversight, the duration of the 
price cap period should have been extended beyond three years (correlated with expected entry of 
sufficient competition to restrain prices) or, in the alternative, presumptively renewed with the merged 
entity bearing the burden of proving that the restriction is no longer necessary because of competition.  
Though there is some sort of interim review, the Commissions standard of review and the burdens of 
proof are left ambiguous.
Programming.  While the majority accepts the Applicants voluntary commitment to offer 
newly defined and a la carte programming packages, the benefits, never mind the merger-specific 
benefits, of such offerings are far from clear.  With respect to the newly defined programming packages, 
it accepts the Applicants unjustified assertion that such packages could not be offered absent a merger 
and summarily finds that such packages present merger-specific benefits.  
At its core, the decision rests on the single assumption that new programming packages will 
increase consumer choice and, therefore, improve consumer welfare.  However, the Commission failed to 
inquire into whether the newly proposed programming packages maximize consumer welfare or even 
estimate the magnitude of the claimed welfare gain.  Does offering consumers more channels for more 
money or fewer channels for more money per channel create a cognizable public interest benefit?  Is it 
choice, in any meaningful sense of the word, if the relative value of the offering diminishes?  By this
logic, a decision to offer one channel at one hundred times the price of the total current package would 
also increase choice and improve consumer welfare.  The same is true for the safety valve claim, that 
lower priced options correct the ills of take-it-or-leave-it offers by a monopolist.  Would not one less 
channel for one less cent also create such nominal choice?  
Even if so, a significant obstacle remains; namely, the exclusivity provisions found in talent 
contracts prevent the merged entity from offering certain channels, potentially the most popular channels,
on both systems.  As adopted, the Order notes that the Applicants have pledged to seek third party 
consent to such arrangements and willingly permits the merged entity to pass the cost of such consent 
directly on to the consumer.
A la carte makes its appearance here without any empirical analysis or any discussion reflective 
of the controversy surrounding the Commissions own a la carte inquiries.16 Nor is there any 
  
14 See e.g., Thomas W. Hazlett, Shedding Tiers for A La Carte? An Economic Analysis of Cable TV Pricing, 5 J. 
Telecomm. & High Tech. L. 253, 258 (Fall 2006) (The complexities of the video marketplace rendered price 
regulation unworkable; when rates were capped by authorities, cable operators and cable networks responded to 
these constraints by altering the nature, packaging, and quality of video programming services.).
15 Applicants June 13, 2008 Ex Parte at 5.
16 See Media Bureau, Report On the Packaging and Sale of Video Programming Services To the Public (Med. Bur., 
Nov. 18, 2004); see also Media Bureau, Further Report on the Packaging and Sale of Video Programming Services 
(continued.)
Federal Communications Commission FCC 08-178
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acknowledgment of the effects of a la carte policies on the public interest concern of diversity of 
programming.  Without further analysis, this voluntary commitment is, at best, inconsequential to our 
merger review.  
Noncommercial and Qualified Entity Channels.  The Applicants commitment to set aside four 
percent of full-time audio channels for noncommercial educational and informational programming as 
well as four percent for qualified entity programming is small step in the right direction.  There is no 
explanation, however, as to why these commitments are significant enough to offset the potential public 
interest harms created by a merger to monopoly.  
In terms of noncommercial educational and informational programming, the acquiescence in the 
Applicants voluntary commitment merely enshrines the status quo.  The Applicants currently already 
offer an equivalent amount of such programming on their combined systems. The voluntary commitment 
adds nothing to offset the effects of the merger.  We should have required substantially more spectrum to 
be set aside for such public interest programming.  
In terms of diverse programming by qualified entities, it is far from clear that a paltry four percent 
set-aside will be commercially viable.  Several commenters have expressed that there is no business case 
for such a small offering.  The decision today rejects the guidance of members of Congress, state 
Attorneys General, and public interest organizations that have called for a larger spectrum set-aside to 
ensure competition and diversity in satellite radio service to offset the massive concentration that is being 
permitted.  And, it is left entirely unclear how the qualified entities will be selected, leaving the entire 
provision unintelligible and unpredictable. We will determine the implementation details for use of these 
channels [for qualified entities] at a latter date,17 is a clear indication of the Commissions historic 
pattern of neglecting minority access to the communications industry.  Once again, rather than taking a 
decisive step forward to improve the plight of women and people of color in media, the Commission has 
taken a step to the side.
Interoperable Receiver. The Order characterizes the Applicants interpretation of the 
Commissions interoperability requirement as not unreasonable to excuse their earlier failure to develop 
and market interoperable receivers.  The Applicants noncompliance created switching costs for 
consumers and, thus, limited pre-merger competition between the Applicants.  Adding this condition 
today is virtually meaningless, because the merged entity will have every incentive to offer interoperable 
devices anyway.  The point was to enforce the requirement before, not after, the merger.  Doing it now is 
clearly a case of closing the barn door after the cows got out.  At least the Order recognizes that this 
claimed benefit simply cannot be deemed merger-specific.
Open Access. The Order uncritically embraces the Applicants proffered open access scheme,18
concluding that commercially reasonable, non-discriminatory licensing will effectively mitigate any 
potential vertical harm from the satellite radio monopoly.  However, there is no effective mechanism to 
deliver a truly open, competitive market.  The open access provision should function to ensure 
(Continued from previous page)    
to the Public, (Med. Bur., Feb. 9, 2006) available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-
263740A1.pdf.
17 Order at  135.
18 Letter from Richard E. Wiley, Wiley Rein LLC, Counsel for Sirius Satellite Radio Inc., and Gary M. Epstein, 
Latham & Watkins LLP, Counsel for XM Satellite Radio Holdings Inc., to Kevin J. Martin, Chairman; Michael 
Copps, Commissioner; Jonathan Adelstein, Commissioner; Deborah Tate, Commissioner; and Robert McDowell, 
Commissioner, FCC at 2 (July 25, 2008); Applicants June 13, 2008 Ex Parte at 4-5.
Federal Communications Commission FCC 08-178
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competition, innovation, and the delivery of advanced technologies in the satellite radio receiver, and to 
some extent, the broader audio equipment manufacturing market.  By shortsightedly permitting the 
merged entity to retain control of the design, manufacture and distribution of satellite radio receivers, it 
allows the merged company to maintain gatekeeper authority over the market.  This is letting the fox 
guard the henhouse.  We should have, as I proposed, required an independent laboratory to certify 
compliance with the technological specifications and quality standards.    
HD Radio. One of the mechanisms the merged company will use to maintain its lock on the 
equipment market will be through product subsidies.  While many consumers will find these beneficial, 
we should have guarded against the use of them for anticompetitive purposes.  While some proposed that 
we require HD radio technology be incorporated into all new satellite receiver models capable of 
receiving analog terrestrial radio, I proposed we require it only in subsidized models.  That way, if there 
were truly an open market for devices, as an independent process for certification would have ensured, the 
market would determine whether to integrate HD radio into the devices.  Where the merged company 
sought to alter market dynamics through subsidies or other mechanisms, it would be prevented from 
discriminating against competing HD radio technology.  Instead, the Order allows the merged company 
to avoid subsidizing models that include HD radio, thus using their market power to thwart the very 
competition the Applicants cited as justifying the merger.  
While I am pleased that the Order is explicitly conditioned on compliance with the voluntary 
commitments, we should have instituted an independent monitor to assist the Commission in reviewing 
complaints and enforcing even these meager conditions.  This is particularly necessary in light of the fact 
that the Applicants just paid record fines for widespread and flagrant violations of Commission rules over 
a number of years.  
In looking back over the torturous and excessively long period during which this merger was 
under consideration, one commentator has criticized the commitments as mere crumbs that have fallen 
off the table.19 It is remarkable that the Commission took so long to do so little.  
While the Order repeats a public interest incantation over and over again, it does little to explain 
why each particular condition has gone far enough to protect the public interest.  With unchecked 
optimism, the Order concludes that the public interest is precisely satisfied by the proffered voluntary 
commitments and other nominal conditions.  Because the proposed transaction, as structured, has not 
been shown to serve the public interest, the merger application should be designated for hearing.  
For the foregoing reasons, I dissent.
  
19 See Jeffrey H. Birnbaum, Radio Merger Under Fire From Black Lawmakers, WASH. POST, June 17, 2008, at D01 
(quoting Representative Elijah E. Cummings).
Federal Communications Commission FCC 08-178
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STATEMENT OF 
COMMISSIONER DEBORAH TAYLOR TATE
Re:  Applications for Consent to the Transfer of Control of Licenses, XM Satellite Radio Holdings Inc., 
Transferor, to Sirius Satellite Radio Inc., Transferee, MB Docket No. 07-57.
In my two years at the Commission, few decisions have been more difficult than the one before 
us today.  As a strong supporter of free-markets and limited government regulation, I am predisposed to 
allow private companies the autonomy to make business decisions without the heavy hand of government 
regulation.  By law, we are required to review this merger application because it involves the transfer of a 
radio license, and more specifically, the Commissions rule against one SDARS licensee holding both 
SDARS licenses.  Our consideration necessarily presents unique and complex challenges because of the 
infancy of the satellite radio market, the past actions of the two companies, and the potential public 
interest benefits that would accrue from the merger.  In approaching this analysis, I thought it more 
prudent to first address the multiple violations committed by the Applicants over the past five years, and 
then consider the merger application.  The forfeitures imposed against these companies, in combination 
with the strict compliance plan they will submit to, convince me that it is now reasonable to consider and 
approve the merger application.  With the sluggish economic outlook and the Dow Jones Industrial 
Average closing down almost 100 points in mid-July, compounding this environment with a negative 
regulatory decision could greatly harm both companies and, more importantly, their subscribers.  While 
the FCC is only a tiny piece of the economic puzzle, I believe it is our responsibility to contribute to a 
vibrant, healthy marketplace within those sectors under our purview.  
In order to fulfill my statutory obligations, and appropriate due diligence, I met repeatedly with 
both SDARS companies, their top management, consumer groups, members of Congress, minority 
broadcasters, terrestrial broadcasters from all across the country, religious, noncommercial, and public 
interest broadcasters, automobile manufacturers, previous SDARS bidders, investors, public citizens, 
mayors, local community leaders, state attorneys general-- and then there were the nearly 15,000 formal 
and informal comments the Commission received.  My personal office received hundreds of phone calls 
from individual citizens and organizations in at least 30 states.  It seems that every segment of society has 
an interest in this mergerI even hear about it at the grocery store and when I open my local newspaper.  
I believe that everyone involved knows that I have listened to all sides openly and equally, and weighed 
their arguments thoughtfully.
In the end, I voted to approve this merger because I believe that the free terrestrial broadcast radio 
industry that has been part of the fabric of our country will not only survive, but flourish in this new 
digital age, and competition from satellite radio will continue to challenge local broadcasters to deliver 
the type of high-quality, local product they have delivered for the last hundred years.  If you dont believe 
me, look at those who have staked their businesses on the future of terrestrial radio and its reach to 95% 
of the radio-listening market, like Rush Limbaugh who recently signed an eight-year, $400 million deal 
with Clear Channel.
Section 310(d) of the Communications Act requires parties seeking to transfer a license to 
demonstrate that the proposed transaction will serve the public interest, convenience, and necessity.  
The Commission weighs the potential public interest benefits against the potential harms.  The Applicants 
have the burden of proving that the proposed transaction, on balance, serves the public interest by a 
preponderance of the evidence.  While my remaining concerns are many, I find that the Applicants have 
shown that this merger, with the voluntary conditions and concessions, and the previously agreed upon 
consent decree for their violations, on balance, will serve the public interest.
I.  ENFORCEMENT
Federal Communications Commission FCC 08-178
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From the beginning, it was imperative to me that before I could review the merger application, 
the Commission must take enforcement action, either by entering into a consent decree or otherwise 
resolving the pending violations.  I believe that the agreement that was reached appropriately penalizes 
the companies, with minimal impact on their subscribers.  The almost $20 million these parties will pay is 
a reflection of the seriousness of the violations.  Thus, the forfeitures and the compliance plans the parties 
will be subjected to are an appropriate form of retribution, rehabilitation, and reconciliation.  
The parties before the Commission today have knowingly violated a number of Commission rules 
and guidelines.  For this reason, I felt it was necessary to resolve the issues through enforcement action 
first, and then proceed to consider the merger application.  XM has agreed to pay $17,394,375 and Sirius 
has agreed to pay $2,200,000 million for violating modulator and terrestrial repeater rules.  In addition, 
both companies have entered into consent decrees that mandate strict compliance with certifications, 
reporting requirements, and penalties associated with future violations.  Specifically, they have agreed to 
hire compliance officers whose primary responsibility will be to ensure compliance with FCC rules.  They 
will adopt a Procedural Guide for satellite radio receivers, establishing step-by-step procedures that 
employees must follow in connection with testing and obtaining FCC certification for new receivers.  
They will adopt a Repeater Change Guide, which will establish procedures to be followed before any
changes can be made to the terrestrial repeater network.  They will shut down, or bring into compliance, 
100 repeaters and all others will be processed according to standard FCC guidelines.  I find this 
compliance plan, in conjunction with the monetary forfeitures, sufficient to allow me to consider the 
merger application.
II.  PRO-CONSUMER
With daily rumblings about a possible recession - and nearly universal consensus that we are in a 
pattern of economic slowdown - good economic policy from our government is more important than ever.  
It is not the job of the FCC to prop up failing companies.  However, it is our job to support efficient and 
affordable radio communications.  Section 7(a) of the Telecommunications Act says, "[i]t shall be the 
policy of the United States to encourage the provision of new technologies and services to the public."
The Commission aims to ensure audio options that provide lower prices, and unique choices such as 
family friendly programming tiers.  Through this Order we ensure that for at least three years 
consumers will see a price cap on every price tier and package that the merged entity offers.  The FCC 
will revisit the need for this price cap six months prior to its expiration. 
III.  CONCENTRATION OF SPECTRUM/SET-ASIDES
Since this merger was first proposed, I have continued to voice concern regarding the 
concentration of 25MHz of spectrum in the hands of a single entity.  Divestiture, which I initially 
proposed to both parties, is impractical, if not impossible, and would result in almost certain disruption of 
service to millions of subscribers.  It could have resulted in disruption of service possibly lasting several 
years as the Commission attempted to create rules and consumers migrated from one SDARS system to 
the other.  Therefore I recognize the practical necessity of reversing the Commissions 1997 rule barring 
either party from holding both SDARS licenses.  
Thus, the purposes of spectrum divestitures are to at least some degree accomplished by the set-
aside requirements we adopted.  Four percent of all channels on both systems must be set aside for non-
commercial educational programming, and four percent must be set aside for use by qualified entities 
such as minority broadcasters.  Only one programming channel per programmer will count towards the 
set-aside.  This will promote a greater diversity of voices, and grant complete editorial control to other 
programmers and owners.  Public interest groups, while pushing for an even greater number of set-aside 
channels, have applauded this condition.  The FCC will determine the appropriate process for selecting 
programmers to occupy set-aside channels.  The Applicants will not be part of this process.
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IV. PRICE CAP
Because SDARS is a relatively new service, and prices have remained constant, it is difficult to 
anticipate how a merger will affect future prices.  The parties have agreed to a three year price cap on the 
services they currently offer.  This is not a sufficient fix to prevent the anticompetitive pricing schemes 
that could arise as a result of this merger. Thus, the Order imposes a review by the Commission before 
the lifting of the price cap in three years.  At that time the merged entity will have the burden of 
demonstrating to the Commission that lifting the price cap will not result in the merged entity raising and 
holding prices at a level they could not otherwise maintain, but for the lack of competition in the satellite 
radio market.
V.  HD CHIP
As a lifelong champion of the music industry and local broadcasters, I am sympathetic to the 
needs of the HD radio industry and promises it holds as another audio choice for consumers.  However, 
many commenters, particularly those in the automobile industry oppose a government mandate requiring 
inclusion of HD chips in all radios, and the resulting increase in cost.  HD radio is already in cars 
manufactured by BMW, Mercedes, Land Rover, Mini Cooper, Hyundai, Rolls Royce, and Jaguar.  In 
2009, it will also be available from Volvo and Ford.  I do not believe the record of performance by this 
nascent technology supports a mandate for inclusion of the HD chip in every satellite radio.  I do, 
however, support the Orders prohibition on any attempts by the Applicants to bar, by agreement or 
otherwise, a car manufacturer or other third party from including HD radio chips, iPod compatibility, or 
other audio technology.  The merged entity must provide open access.  In fact, I demanded that the 
technical specifications be available immediately, rather than in a year, as originally proposed.
In considering this difficult issue, I consulted the auto industry, where satellite radio has 
established a strong foothold.  Without exception, the auto manufacturers I spoke with urged the 
Commission to forbear from imposing an HD chip requirement.  Their estimate of the cost per car was, on 
average, two, three, or four times the cost suggested by iBiquity.  With this level of disparity in 
information, it is impossible to do a proper cost-benefit analysis.  Additionally, at a time when the auto 
industry is struggling, it would be unreasonable to require them to assume a cost, or, even worse, pass a 
cost on to their consumers, for a technology that has not yet proven the strength of consumer demand.  
Thus, I believe the proper path for the Commission to take is to review the issue, along with the 
price cap, in three years.  In addition, we will launch a Notice of Inquiry to examine what the resulting 
costs would be and whether HD should be mandated.  In the interim, I encourage the HD radio industry to 
find new and innovative incentives to offer car manufacturers to include their technology in automobiles, 
just as other technologies have done, to increase their uptake and adoption, perhaps including an 
innovative revenue-sharing model.
VI.  RIAA
Of the many concerns that were brought to my attention throughout this process, one of the most 
disturbing to me, as a life-long resident of Nashville- Music City- was the potential threat to the music 
industry.  XM and Sirius, unlike terrestrial broadcasters, pay million of dollars in royalties to the record 
labels whose music they play.  This is an important source of income for labels and musicians.  With the 
adoption of new non-music tiers, concerns were raised about a potential reduction in revenue to the music 
industry.  However, even the News, Sports and Talk tier includes music channels, such as Radio 
Disney, which will result in royalty payments.  In addition, I requested, and XM and Sirius have 
provided, assurances that it is not their intent to do anything to decrease royalties through gamesmanship 
of these new programming tiers.  Their primary business has been, and will continue to be, musicnot 
news and sports.  In fact, the impetus for these decisions is just the oppositeincreasing revenues is 
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mutually beneficial for both parties. I will continue to monitor the effects of this transaction on the music 
industry and anticipate the parties will work with the Commission to protect this important source of 
revenue for Americas music industry.
VII. TIERED CHOICES
As a long-time supporter of family-friendly media choices, I shared the concern of many 
commenters regarding the level of coarse programming on satellite radio.  I associated myself with the 
comments of Senator Brownback who said, Both XM and Sirius prominently feature sexually explicit 
programming that is highly inappropriate and contributes to the increasing coarseness of American 
society. (Letter of June 28, 2007).  With this in mind, I was pleased to see the parties offer to provide a 
Family-Friendly tier of programming, a less expensive alternative to their full lineup of channels that 
will not include any indecent or profane content.  I was also pleased to see that they have a tier available 
that allows consumers to choose any 50 or 100 channels they wish to receive from the entire 
programming lineup.  This, too, will allow parents the option of removing those channels they find 
offensive or inappropriate for their family.  Finally, the News, Sports, and Talk tier will be free from 
much of the content parents may not wish their children to hear.  Just as in the video industry, I believe 
that keeping inappropriate content on subscription services that consumers must invite into their homes, 
and pay for, such as satellite radio and cable television, serves the public interest.  
VIII. LOCAL PROGRAMMING/ADS
Many broadcasters contacted the Commission regarding the merged entitys threat to local 
programming and advertising.  Because local advertising revenue traditionally accounts for over 70% of 
radio revenues, it is critical to local broadcasters business model.  The original licenses, and this Order, 
unambiguously prohibit local programming- including local advertising.  Likewise, the parties have 
agreed that they do not now, nor do they intend to, air local programming.  This Order specifically finds 
that they must refrain from airing any local programming or advertising whatsoever over terrestrial 
repeaters or future technologies.  All programming aired by the merged entity will be available strictly on 
a nationwide basis.  This is yet another area where the FCC will be carefully monitoring the compliance 
of the companies.  Parties that feel a violation of this prohibition has occurred are encouraged to contact 
the Commission and file a complaint.
IX. OPEN ACCESS
At my request, the parties agreed to make the technical specifications for their equipment 
available immediately, rather than in a year, as originally proposed.  Third parties will be able to access 
the technology necessary to produce satellite radio receivers for sale at retail and to automobile 
manufacturers sooner.  Thus, competition in the satellite radio equipment market should begin to emerge 
in upcoming months.  
X. COMPLIANCE PLAN
As part of the consent decree the parties have agreed to a strict compliance plan, which includes 
the following:
 Hire FCC Compliance Officer responsible for ensuring future compliance with Act and 
Commission rules;
 Adopt Procedural Guide establishing procedures for testing, certifying and making modifications 
to satellite radio receivers and Repeater Change Guide establishing procedures for making any 
changes to terrestrial repeater network;
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 Conduct audits of randomly selected satellite radio receivers to ensure compliance with FCC 
requirements;
 Establish an FCC Compliance Training Program for all employees who engage in activities 
subject to FCC regulation;
 Provide notices to subscribers offering various technical fixes to non-compliant radio receivers at 
no cost to subscriber via its website, subscriber newsletter and automated telephone response;
 Broadcast on-air notices to subscribers regarding non-compliant radio receivers;
 Turn off or bring into compliance 100 terrestrial repeaters, and send the others to FCCs 
International Bureau for processing;
 Replace non-compliant radio receivers returned by consumers for repair or warranty claims with 
compliant devices; and 
 Submit periodic compliance reports to FCC.
In addition, the parties will be subject to a combined forfeiture of approximately $20 million.  All 
future violations will be subject to the maximum monetary penalties, and will be considered in light 
of these past violations.  
CONCLUSION
In conclusion, I voted to approve this merger in light of the many public interest benefits, such as 
the three year price cap, lower-priced tiers, the family-friendly programming tier, the set-aside for 
diversity, the set-aside for non-commercial, educational programming, the ban on agreements to prevent 
HD radio or other audio technologies from being integrated into satellite radios, the prohibition on 
intentionally reducing revenues paid to musicians and record labels, and the prohibition on exclusive 
contracts for sports programming.  
I will continue to encourage the merged entity to work with the WCS licensees toward resolution 
of the rules regarding interference issues in the WCS band.  In the absence of an industry agreement, I 
will encourage my colleagues to adopt rules in the near future.  I hope we can soon resolve this issue 
which has been outstanding for ten years.
The FCC will oversee the compliance of these two companies, and I personally intend to follow 
up with the merged entity, and the FCCs Enforcement Bureau, to assure they are fulfilling the terms of 
the enforcement and merger agreements.  The Commission will seek to ensure that the merged entity uses 
the spectrum it has been allocated efficiently, as one of our countrys most important public resources.  
The Commission will also ensure that the spectrum is used in a way that serves the public interest by 
enhancing diversity and giving voice to minority and noncommercial broadcasters.
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STATEMENT OF
COMMISSIONER ROBERT M. McDOWELL
Re:  Applications for Consent to the Transfer of Control of Licenses, XM Satellite Radio Holdings Inc., 
Transferor, to Sirius Satellite Radio Inc., Transferee, MB Docket No. 07-57.
I am pleased to support this merger and look forward to the consumer benefits that will result 
from the combination of XM and Sirius.
Competition in the audio market has grown substantially in the past few years.  Barely one 
generation removed from AM and FM radio and vinyl albums, we now have a still vibrant AM/FM dial, 
full of music, news and talk radio of all stripes, HD radio with its multicast streams of content, mp3 
players, Internet radio and much more.  When discussing this merger, it is important to keep in mind that 
satellite radio  both XM and Sirius combined  comprises only five percent of that audio marketplace.  
Despite these highly-competitive market realities, this merger order is one of the most heavily-
conditioned in FCC history.  With the obligations we have imposed, and those that the companies have 
voluntarily undertaken, the combined company, post-merger, will offer several new, attractively priced 
programming packages for consumers, will open up opportunities for noncommercial educational 
programmers and minority-owned programmers to gain carriage on the satellite radio platform, and will 
create opportunities for competition in the satellite radio equipment market, so that consumers can enjoy 
more choices.
I am also pleased that we have resolved the enforcement issues regarding terrestrial repeater and 
radio equipment violations admitted by XM and Sirius.  As the consent decrees demonstrate, the 
Commission takes such rule violations seriously and will carefully examine the ongoing compliance of 
the combined company with our regulations.