Counsel for both Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. met with top officials from the Federal Communications Commission on Wednesday, according to a recent filing with the agency.

The meeting was with FCC Chairman Kevin Martin; Daniel Gonzalez, Chairman Martin's Chief of Staff; and Michelle Carey, Chairman Martin's Senior Legal Advisor.

According to the filing, the meeting was held with the Commission to discuss action on the merger following the decision by the Department of Justice. In addition, the filing included the programming packages and proposed pricing seen here and here.

View the FCC filing after the jump...

A gaggle of state Attorneys General today urged the FCC to impose restrictions on the merger of Sirius Satellite Radio, Inc. and XM Satellite Radio Holdings Inc.

The AGs - coming from 11 states that include Connecticut, Ohio, Missouri, and Iowa - told the Commission that they were "disappointed" by DOJ's decision to let the deal proceed without conditions.

"The combination of these companies will result in a single corporation controlling access to all nationally available satellite radio," the attorneys general said.

And what do they want?

The states are saying that the FCC should consider requiring Sirius and XM to make interoperable radios available to customers (uhm, ok), offer different packages of channels on an a la carte basis (uh huh), and divest some radio spectrum that would allow another competitor into the business (it depends, how much?).

"Our offices stand ready to share with you our thoughts on the potential value of various remedial conditions available, such as mandatory publicly available interoperable receivers, a la carte pricing, and divestiture of spectrum."

I don't think there was ever a question of concessions. Mel Karmazin, during the many hearings on Capitol Hill, clearly stated the companies' willingness to provide concessions so that regulators would deem the merger in the public interest. I'm not exactly sure where these Attorneys General have been, but much of what they're asking for has already been baked into the merger. But that's politics for you...

[via Reuters, RadioInk]

UPDATE: I just want to point out that the AP story has been updated to be somewhat less misleading. Previously it read "More Choice in Satellite Radio Years Off" but now the article, written by Christopher S. Rugaber, reads: "'A La Carte' Satellite Radio a Year Away."

Also, there's a bit of confusion surrounding the timing. Understand that the "3 years" cited here is based off of Barrington Research's estimates for OEM radios (due to the lag time that automakers tend to require) that does not mean Retail radios will suffer the same slowness in getting to market. Sirius and XM have said, from the beginning, that the A La Carte receivers will be available to customers within one-year after the merger is complete. I just wanted to make sure this was clear.

Following the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., it could take up to three years before new cars would feature both services in "a la carte" packages.

That's the prediction of media analyst Jim Goss at Barrington Research, who told the Associated Press that automakers require lead times of several years to update dashboards with new products. As a result, cars with interoperable radios likely wouldn't be on dealer lots for up to three years.

That's not to say that both Sirius and XM won't be providing "best of" programming (see: will my radio still work?), which essentially is simulcasting of certain content from one service to another. We don't know exactly what big-name programming will be available yet - those content agreements all need to be worked out once the deal is finalized.

Still, analysts seem to think that few current subscribers will pony up for the new receivers.

Perhaps 5% to 10% of current subscribers "might go through the trouble" of buying new radios for the "a la carte" option, Stifel Nicolaus analyst Kit Spring wrote in a recent note to clients.

So here's a question:
Since most of you are current Sirius or XM subscribers - would you buy a new receiver when the "a la carte" enable radios come out?

I am questioned constantly (nearly everyday even) from satellite radio subscribers concerned about their existing radios. Since the DOJ approved the merger, these questions have bombarded my inbox even more: Will my Inno work after the merger? Do I need to buy a new Stiletto after Sirius and XM merge? I just bought a new car, will my new satellite radio still work? You get the idea.

Here's the facts:
From day one Sirius and XM have promised that no existing radio will be made obsolete by the merger. (Afterall, that would be silly from a business sense wouldn't it?) The reality is that you will be able to get the "best of both" Sirius and XM on any of today's satellite radio devices with one monthly subscription.

• If you're an XM subscriber:
  You'll continue to receive your existing XM service, and gain the ability to receive certain Sirius programming.
  
  
• If you're a Sirius subscriber:
  Sirius customers would continue to receive their existing Sirius service, and be able to obtain certain XM programming.

There are eight different packages that the companies have announced they will offer following the merger. Prices for each will range from $6.99/month to $16.99/month. If you don't want anything to change, it won't - the "Everything" packages will cost the same as what you currently pay.

• View the XM channel lineup after the merger
• View the Sirius channel lineup after the merger
  

Can I get MLB on my Sirius after the merger? Will I can get NFL on my XM?
The real answer? We don't know for sure. If you read through those post-merger channel lineups, you'll notice that there are "top selections" made available for both sides. Obviously, like anything else in this world, contracts will need to be negotiated to iron out all the details. We will find all that out after the merger is finalized.

First-ever A La Carte packages
Of those eight packages, two will be "a la carte" packages. These will be the first ever a la carte options in subscription media. Ever. You will have the choice of either a 50 channel package (starting at $6.99) or a 100 channel package ($14.99), and then choose from a selection of channels to your liking. "Premium" content will cost more, but this will be the first time that you can pick and choose what channels you want on your radio. (Hint: if you mostly want the commercial-free music, with a smattering of news/talk, then the a la carte packages will be perfect for you.)

There's one caveat: A la carte programming will only be available for subscribers using new radios.

These new a la carte capable radios are currently in development and will be brought to market following final approval of the merger. Sirius and XM originally estimated it would take one-year to bring them to market, but since the merger process has dragged on much longer than anyone expected, it's hard to know the exact timeline now.

If you have any questions, as always, feel free to email me at ryans@orbitcast.com and I'll help out as best as I can.

There's no doubt that there has been a roller-coaster of emotions the past 400 days, but no one could be happier waking up this morning than the future CEO of a soon merged Sirius-XM: Mel Karmazin.

"He's going to feel better about this than anything he's done in his career," said Tom Freston, former CEO of Viacom Inc. "It's a big triumph for Mr. Karmazin."

Freston and others credit Karmazin's relentless efforts with regulators, politicians and investors in pushing through approval of the deal.

"I think he is the most diplomatic, skilled negotiators that I know," said Joel Hollander, former CEO of CBS Radio. "Everyone knows he's a great salesman, but he knows how to leave a little bit on the table."

"He just grabbed onto this and ran through an endless amount of hurdles and made it seem more and more possible," Freston said. "This is probably the most difficult deal of his life."

But it's not over yet. Even after FCC approval, there's still realities that the merged company will need to face. Like turning a profit in a slowing economy.

"The bottom line is they'll be able to cut costs. but they'll have to figure out a way to increase the subscriber base," said Hollander. "It's not so easy today."

"If there's anyone that can do it, it's certainly Mel," Hollander added.

[Reuters via Orbitcast Forums]

Senator Byron Dorgan (D-ND) called the Justice Department's decision to approve the merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. "another disappointing example of this administration's blatant disregard for the public interest with regard to media ownership."

Dorgan, who seems to think that terrestrial radio "sprouted up" in 1997, cited the decade-old SDARS license as the main reason for being upset.

"There seems to be no limit to the mergers this administration will approve," said Dorgan. "These two companies were issued licenses a decade ago to provide competing national satellite radio service. Their license approval included a clause that prohibits them from merging into one company. Now the Justice Department has decided the contract they signed can't stand in the way of consolidation. That doesn't make any sense to me."

Dorgan said "the American consumer will pay the price."

Now that Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. have approval from the Justice Department, let's check in on the investment analysts' take on the road ahead...

• Benjamin Swinburne, Morgan Stanley:
  Following closing of the merger, both Sirius and XM "should benefit from some lift in demand from combined programming offerings." But a critical factor, from an investor's standpoint, will be the ability to renegotiate large OEM and programming contracts, in addition to creating new demand and increasing conversions.
  
  "The challenges facing the industry, however, will not go away as a result of the merger," writes Swinburne. Now the focus shifts to free cash-flow.
  
  
• Jeff Wlodarczak, Wachovia Capital Markets:
  "With the DOJ decision now out of the way, FCC approval would appear to be a foregone conclusion," writes Wlodarczak in a recent note, noting that there are likely to be conditions placed by the Commission.
  
  Wachovia doubts the merger will "materially reignite demand" for satellite radio, but "realistically as a combined entity they have a much greater chance for long-term survival," in their view.
  
  
• David Bank, RBC Capital Markets:
  RBC continues to "remain on the sidelines" from an investor's view, noting that "any 'bounce' from potential completion of the merger may largely factored into current valuation."
  
  But what of the FCC? Bank notes that the FCC tends to "follow in the DOJ's footsteps" so they're more confident in final approval.
  
  "In terms of timing, it's difficult to know, but some time in the next 2 weeks to 8 weeks would seem realistic given chatter we are hearing from our Industry sources," write the RBC analyst. The question now is the conditions that the FCC will impose.
  
  
• Blair Levin, Stifel Nicolaus:
  Aside from what was already posted, Stifel Nicolaus notes that there has been some significant negotiations regarding conditions at the FCC. And that there's one wildcard still out there: The NAB.
  
  "If the FCC clears the deal, it's possible the NAB could challenge the FCC decision in court," writes Levin. "But we would expect the broadcasters' legal prospects to be uphill."

Now that the Department of Justice has closed its review of the Sirius-XM merger - without any conditions - the focus now shifts to the Federal Communications Commission.

Will Sirius and XM gain the FCC's approval? Blair Levin, analyst at Stifel Nicolaus believes so.

"We believe the companies will likely be able to [win FCC clearance]," writes Levin in a recent note reflecting on the DOJ's announcement. "While there is always a risk that three commissioners could decide the merger is not in the public interest -- and in this case we suspect at least one and maybe two commissioners will vote that way -- we note the FCC has never, to our knowledge, rejected a merger approved by the DOJ. We don't believe this one is likely to be the first."

Those "one or two" commissioners are likely the Democratic commissioners Adelstein and Copps (pictured above, in order from the left, followed by Martin, Tate and McDowell), who have historically been opposed to media consolidation.

And what of timing?

The last we heard, the FCC might not reach an agreement by the end of this month (one can always hope though). Stifel Nicolaus thinks that the timing will depend on how the two Democratic commissioners will choose to rule: do they impose further conditions? or do they simply oppose the deal?

If it's the latter, the decision will likely be done in a matter of weeks.

The United States Department of Justice today approved the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., stating that the evidence does not establish that the combination of the two would "substantially reduce competition."

Official statement:

"After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers. The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers.

"The Division's investigation indicated that the parties are not likely to compete with respect to many segments of the satellite radio business even in the absence of the merger. Because customers must acquire equipment that is specialized to the satellite radio service to which they subscribe, and which cannot receive the other provider's signal, there has never been significant competition for customers who have already subscribed to one or the other service. For potential new subscribers, past competition has resulted in XM and Sirius entering long-term, sole-source contracts that provide incentives to all of the major auto manufacturers to install their radios in new vehicles. The car manufacturer channel accounts for a large and growing share of all satellite radio sales; yet, as a result of these contracts, there is not likely to be significant further competition between the parties for satellite radio equipment and service sold through this channel for many years. In the retail channel, where the parties likely would continue to compete to attract new subscribers absent the merger, the Division found that the evidence did not support defining a market limited to the two satellite radio firms that would exclude various alternative sources for audio entertainment, and similarly did not establish that the combined firm could profitably sustain an increased price to satellite radio consumers. Substantial cost savings likely to flow from the transaction also undermined any inference of competitive harm. Finally, the likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband Internet devices, made it even more unlikely that the transaction would harm consumers in the longer term. Accordingly, the Division has closed its investigation of the proposed merger."

More after the jump...

Remember when I said internet in your car may come sooner than you think? Well guess what, Chrysler is saying it will be the first car company to provide in-car Internet access - availability will come later this year.

The third-largest U.S. automaker will have the capability added to existing vehicles by dealers beginning this year, and later will be factory-installed on the assembly line.

The Washington Post is reporting that Chrysler will use a cellular signal and a mobile phone account to give passengers access to the web.

"We want to make the radio itself a WiFi port," said Frank Klegon, Chrysler's product development chief.

And this is just the beginning of Chrysler's connectivity plans. Hey DOJ, are you watching this?

[Washington Post via Autoblog, Engadget]