RSSCongress to Study XM, Sirius Merger
By Ed Oswald | Published February 22, 2007, 2:46 PM
Congress plans to hold hearings into the merger of satellite radio providers XM and Sirius next Wednesday, with the House Judiciary Committee slated to ask CEO designate Mel Karmazin and others how the merger benefits consumers.
Most analysts agree that much of the political opposition will come from Democrats, and say that now is the best time to push through any merger. If Democrats take over the executive branch in next year's elections, such a merger may be near impossible.
Even with a Republican-controlled FCC though, it still appears as if it will be difficult for the two satellite radio companies to make their case. Current language within the spectrum agreements with XM and Sirius require that there be two satellite radio operators.
"It's a very high hurdle that they would have to meet to demonstrate if it's in the consumer's best interest," FCC Chairman Kevin Martin said. Any merger would require a change in those agreements.
The newly created House Antitrust Task Force will hold the hearings. Created by Rep. John Conyers (D-MI) to address antitrust and competition policy issues, the XM-Sirius merger would be the first item on the panel's agenda, and would include both Republicans and Democrats.
"Digital music is at the cutting edge of technology and innovation," Conyers said in a statement. "We are holding this hearing to allow Members to probe whether this merger will enhance or diminish competition in the digital music distribution industry."
Ranking member Rep. Lamar Smith (R-TX) added that the panel would also look into the two companies' claims that satellite radio competes against terrestrial radio, the Internet, or other emerging technologies as part of the overall hearing.
"Consumer's interests should remain our top priority," he added.
I'm sure there will be certain conditions to letting the merger go through, like a moratorium on price hikes for a certain amount of time. Price will eventually have to go up a some point, even if they're merged. Inflation demands that there can't be the same price rate forever. It should also be pointed out that subscribers really worried about price hikes have the option of buying a lifetime subscription for a flat fee.
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The merger is going to bring an end to Satrad.......We, the consumer, will have to pay more for less. Don't forget that Mel K. has ruined everything he's touched. Keep them separate and let the better company survive.
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It is in my opinion that a merger will hurt simply because there will be less choices to make for a satellite radio company.
Fewer choices means higher subscription prices, more choice means lower subscription prices.
Simple business math, at least in my point of view.
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There are choices. Satrad competes with HD radio, terrestrial radio, and for that matter, your cd player. That's plenty of competition.
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Pass it. It's in the general customer's interest to have options beyond terrestrial and hd radio. This seems to be the first one that Congress gets to practice on.
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