AfterDawn: News

Sirius CEO talks about XM merger with senators

Sirius Satellite Radio CEO Mel Karmazin testified to a Senate committee this week to attempt to convince the committee the proposed merger with XM Satellite Radio should not be considered an antitrust issues. Both satellite radio companies have proposed a $13 billion merger but the FCC is reluctant to play along. Karmazin made some promises and let his opinions known to the committee.

"I should point out that XM has the largest digital radio facility of its kind in the country and is headquartered right here in Washington where the combined company will continue to have a significant presence," he said at the beginning of his testimony, reminding the senators of the jobs that the companies have created. He also said he didn't believe this was an anti-trust issue because the combined company would still face a lot of competition.



He listed AM/FM analog radio, Internet Radio, HD Radio, streaming music to mobile phone and even equipment to use MP3 players in cars as competition. It was his belief that the market here is for digital audio and that how it is delivered doesn't really matter; its not just "Satellite Radio" to think about anymore.

The company's 1997 license with the FCC forbids a merger with XM, but Karmazin addressed the issue by saying, "the 1997 market should not guide policy decisions in 2007". He also promised that prices would stay the same so that customers who want the same or similar services from the combined company would pay the same price. Karmazin also revealed plans to provide packages for less than the current offerings.

Also, a very important promise made is that the new company will broadcast in both the XM and Sirius formats for the foreseeable future, making no receivers obsolete.

Source:
Ars Technica

Written by: James Delahunty @ 23 Mar 2007 0:21

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• 5 comments

• georgeluv

  Quote:to attempt to convince the committee the proposed merger with XM Satellite Radio should not be considered an antitrust issueim pretty sure i havent seen an antitrust issue so clearly defined in a long time.
  
  Quote:headquartered right here in Washington where the combined company will continue to have a significant presencevieled threat that theyll just keep on beating at the senate untill they give in?
  
  Quote:He also promised that prices would stay the same so that customers who want the same or similar services from the combined company would pay the same price.my bullshit meter nearly fucking exploded when i read that.
  
  Quote:Also, a very important promise made is that the new company will broadcast in both the XM and Sirius formats for the foreseeable future, making no receivers obsoletelove how un-defined the term "forseeable future" is. its as forseeable as our stock holders will permit, wich will be very short seeing as how broadcasting on two technologies is twice as expensive and broadcasting is thier biggest expence after music licesning. ill give it a year and half, then all the serius people get to buy xm recievers! yay!

  23.3.2007 06:32 #1

• Unfocused

  "ill give it a year and half, then all the serius people get to buy xm recievers! yay!"
  
  No, no no. You have it all wrong. They will need to buy a "new and improved" receiver. That way they make the money from all existing customers.

  23.3.2007 17:47 #2

• ripxrush

  Remember when Net Zero was FREE & they had comercials saying they will ALWAYSE be free, Well u used to be able to be online as long as u wanted now there i a max of 10 hours but it is still FREE!!! so they may keep the same prices for even 10 years but dwindling down the service that u get for that $ untill u loose that 1 program u want & have to pay more!!! It may be good in the end i am thinkign better quality of sound, More channels to choose from hopefully te consumer will be the winner in thsi one but who knows?!

  23.3.2007 20:53 #3

• jb2453

  if these companies merge, i dont really think its going to increase subscription prices. look at it this way: now instead of 2 competing pay services, you have 1 pay service competing with free- radio, P2P, etc. if they were to raise prices to say, 18, maybe 20 dollars a month, they would be shooting themselves in the foot because no ones gonna pay that much. all their subscribers would go back to radio and downloading.

  23.3.2007 22:29 #4

• maxxjulie

  What are you guys talking about? They already said if the merger is approved all existing xm and sirius radios will be compatible and you won't be required to buy a "new and improved" radio. Subscription costs won't go up either cuz the merger will save them a lot of money. They spend a lot on advertising fighting each other and will drop some of the redundant stations. Also, this is satellite radio here. This is a luxury service, not something people have to have. I don't know about you people, but I've never lived anywhere where more that one cable company was available to me. If this merger doesn't go through, it'll be because the fcc was bribed by the clear channels of the radio industry . Everyone that has heard satellite radio knows how great it is to listen to commercial free music instead of the same ten songs all day long broken up by long commercial breaks.

  25.3.2007 15:47 #5