FCC Chairman Pleased With A La Carte Plans
By Amy Gilroy -- TWICE, 8/20/2007
WASHINGTON — The Federal Communications Commission (FCC) chairman Kevin Martin told reporters he was pleased with the two satellite radio companies' proposals to let customers choose which channels they would like to receive if Sirius and XM are allowed to merge, according to an AP report.
The comments were made at a monthly FCC press meeting where Martin reportedly said he was "pleased any time companies come forward with proposals that would give consumers more control over what they pay for."
Martin would not say when the FCC might decide on the merger.
Analyst Stifel Nicolaus & Co. said Martin's comments were "a positive sign for the prospects of the XM-Sirius merger," but noted that it may be the Department of Justice that makes the "basic decision on whether to clear the proposed merger on antitrust grounds, and that remains a close call, though we believe the companies have made some progress in recent weeks."
Also, the National Association of Broadcasters (NAB) released an analysis of the new a la carte programming packages announced by Sirius and XM, claiming that although the new plans cost less per month (starting at $6.99), they cost more per channel than the current plan.
Under the NAB's analysis, the current XM package at $12.95 with 170 channels costs about 8 cents per channel. Current Sirius programming, with 130 channels, costs about 10 cents per channel. But under the new plans, the fees would jump to the equivalent of 14 cents to 25 cents per channel, although consumers may opt for an eighth choice, which is to keep their current programming.
XM and Sirius said jointly, "The NAB opposes the merger of XM and Sirius to protect AM/FM radio from competition, not to protect consumers ... It's no surprise that the NAB's misinformed and self-serving analysis fails to mention that Sirius and XM will reduce the price for entry level satellite radio service to $6.99 — a reduction of 46 percent — and that the proposed offering will not require existing subscribers to pay more for the broad selection of content they enjoy today."
Sirius and XM announced on July 23 they would offer new a la carte programming options if the companies merge starting with a plan that offers 50 channels of either XM or Sirius programs (customers must choose one or the other service) at $6.99 per month.
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