Xm and Sirius Still Facing Uphill Battle

As an XM subscriber myself, I have argued the fact that I really don’t need 3 comedy channels and 4 hip-hop stations, so why I am being charged for these. I would rather reduce my rate and pick only the stations I like to listen to. Apparently I am not alone as other consumers think the same way, and so the satellite companies are now offering up a plan to its customers, but more importantly a plan that will make it easier for the merger of XM and Sirius to go through.

Dream no more. In a recent article by Harry Stoffer in Automotive news he says, Satellite radio providers Sirius Satellite Radio Inc. and XM Satellite Radio Inc. will offer eight programming packages to give more choices to listeners in the U.S. The plan enables subscribers to choose 50 channels for 25 cents each per month. Some service packages would comprise news and talk channels. Among the proponents of the merger proposal between the two firms is the National Association of Broadcasters and Consumers Union of the United States Inc.

This “a-la-carte” pricing plan will allow consumers to pick and choose the stations they want. An offer satellite companies have presented to allow their merger to go through.

However not all are happy with the satellite merger between the companies, saying it would be a monopoly. Brooks Boliek reported in the July issue of Hollywood Reporter that reports on the debate over the proposed Sirius-XM deal which would reduce the satellite radio industry to one provider. The National Association of Broadcasters (NAB) argues that the merger would harm consumers by creating a government-sanctioned monopoly. Also, the Consumer Federation of America, Consumers Union, Common Cause and Free Press have asked the U.S. Federal Communications Commission to reject the companies` proposal to define the market.

Herb Kohl, chairman of the Judiciary Antitrust Subcommittee is urging the Justice Department and the Federal Communications Commission to reject the merger of XM and Sirius satellite radio services in the U.S. Kohl said that there is a need to reject the $13 billion merger due to the insufficient viable competitive alternative to satellite radio.

The satellite radio stations of course are not going down without a fight. With the impending challenges they face in regards to their merger, XM and Sirius have hired lobbyists and advisers to plead their case on Capitol Hill. "We continue to believe we will ultimately receive the necessary approvals," Hugh Panero, chief executive officer of XM, said during a conference call on Apr. 26 with Olga Kharif of Business Week Online.

Supporters and critics of the proposed merger of satellite radio providers Sirius and XM will testify before the U.S. Senate Commerce Committee. Sirius CEO Mel Karmazin said that the merger, which was prohibited when the U.S. Federal Communications Commission approved the companies` licenses, would help satellite radio survive. Critics claim that the companies are asking for a government-blessed monopoly.

With the opposition by the U.S. Federal Communications Commission to the proposed merger and declining stock prices Wall Street doesn’t agree with Panero’s sentiments.

By: Michael C. Podlesny