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Karmazin Agrees To Concessions For Merger

3/01/2007 11:38:00 AM Eastern

Washington — Sirius CEO Mel Karmazin told regulators yesterday he would not raise subscription prices for a merged XM-Sirius company and would be willing to work with regulators in restricting price and other satellite radio features.

When pressed at a House Judiciary Committee yesterday, Karmazin said, “We would be willing to agree on restrictions on pricing for a given period of time. We need to show you and others that this merger is in the public interest.”

When asked if he would agree not to compete with local news and weather broadcasting and Karmazin said, “We think we’d be open to lots of things.”

Detractors on the committee however, implied that Karmazin would be willing to promise anything to “get his merger.”

Karmazin also promised regulators that any current radio would not be obsolete and would work with the new service.

One public interest group recommended that any merged satellite radio company not be allowed to raise prices for three years after the merger, allow some à la carte choice of programming by subscribers and that 5 percent of its capacity be set aside for educational and non-commercial programming, as stated by Gigi Sohn president of Public Knowledge, a public interest group.

Republican Rick Boucher said that if Karmazin was willing to accept Sohn’s proposal, the merger might have a good chance of passing.

Chairman of the House Judiciary Committee John Conyers (D-Mich.) said the key to approval of the merger rests on defining the overall market where satellite radio competes.

It must determine “whether the relevant market for satellite radio includes all forms of digital music or just satellite radio companies. The full digital audio market is estimated at $12 billion and it includes more than 230 million radio listeners and 15 million Internet radio listeners, more than 100 million iPods and 14 million satellite radio listeners.”