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FCC Chairman Pleased With Proposed Satellite Radio Pricing Plans

8/07/2007 01:58:00 PM Eastern

Washington — Federal Communications Commission (FCC) chairman Kevin Martin told reporters today he was pleased with the XM and Sirius decision to let customers choose which channels they wish to receive if the two satellite companies 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 Dept. 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 today, 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. Under the seven newly proposed programming packages that would be offered if Sirius and XM were to merge, the cost per channel would go up to between 14 cents and 25 cents per channel, said the NAB. 

“The NAB opposes the merger of XM and SIRIUS to protect AM/FM radio from competition, not to protect consumers.  As more and more consumers voice their support for the merger, the more fearful of increased competition the NAB becomes and the more desperate their actions in response.   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% -- and that the proposed offering will not require existing subscribers to pay more for the broad selection of content they enjoy today."

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