Sirius CEO Pledges Subscription Price Cap if XM Merger Approved

Authored by Mark Hefflinger on March 1, 2007 - 1:30pm.

Washington - In a hearing before the House Judiciary Committee's antitrust task force, Sirius Satellite Radio CEO Mel Karmazin on Wednesday told lawmakers that his company would be willing to cap -- and possibly lower -- subscription prices if regulators approve its $13 billion merger with XM Satellite Radio, according to published reports.

Subscribers of both services currently pay $12.95 a month.

Attempting to allay fears that the merger would lead to higher prices, Karmazin called the idea of raising rates to compete with free radio "bizarre."

"We are committed to not raising prices and, in fact, are committed to lowering prices," said Karmazin, who would be CEO of the combined company.

Some members of the committee, however, still have their doubts.

"We don't have too good a record of satellite companies keeping their promises," said Rep. John Conyers (D-Mich.). "'Trust me' isn't going to work here."

The merger must be approved by both the Justin Department and Federal Communications Commission -- the latter of which currently has a rule in place prohibiting a single company from owning two satellite radio licenses.

http://online.wsj.com/article/SB117269465701522421.html (subscription required)

http://tinyurl.com/23lhzb (Reuters)

http://tinyurl.com/37no96 (CNET)

Published in DMW Daily, March 1, 2007

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Comments

Satellite Merger - Owning Multiple Satellite Radio Licenses

Submitted by James (not verified) on March 1, 2007 - 3:27pm.

The only reason that rule is there was because the FCC split up the satellite radio technology at it's inception to protect the terrestrial radio industry and its few majority owners. If the technology were allowed to develop naturally, the public would have better and more entertainment options available to them. That was a mistake that should be corrected now.

I am a satellite radio owner and I applaud this entity that directly competes with the stale, overgrown and commercial-ridden terrestrial radio system. Maybe this will push Infinity, Viacom and the rest to provide better listening content with fewer commercials.

Bad Idea

Submitted by david (not verified) on July 30, 2007 - 6:25am.

I am a Sirius subscriber, a fan of Stern, but despite his support of the merger, I am against it. If they merge, the customer service will not be the same. Even now, I have had to have my Sirius Stiletto 100 replaced 3 times due to overheating etc. Sirius also has a bunch of charges that are hidden, ie: change a radio- they get you for a $75 admin fee. If they merge, existing subscribers will be hostages. I have already spent about a $1000 on equipment etc. I don't want to go back to terrestrial, just want the competition to be there, so Sirius & XM don't get together to shaft us all, and make more money for rich investors. The whole lower price thing Karmazin suggests is dishonest. Sure you can pay a lower price-for LESS service. Big deal. When I initially signed up for Sirius, it was for Stern. he never mentioned before he started his show, that it would only be a 4 day a week show. He never mentioned a 12 week vacation schedule. So we were not told everything from the get go, let's avoid getting scammed again. Thanks, David