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Sirius and XM Pimp Congress for Merger, Say Prices Won't Be Raised

Illustration for article titled Sirius and XM Pimp Congress for Merger, Say Prices Wont Be Raised

As the Sirius and XM satellite radio services continue to seek U.S. government approval for that much-discussed merger, the companies tossed out a few details of the proposed marriage in a document filed with the feds. As Sirius CEO Mel Karmazin (pictured in car above) told a House judiciary committee antitrust task force a few weeks ago, subscribers would have a choice of tiers of service, but not the ability to pick and choose exactly which stations they'd like included in their subscription. In the document, Sirius wrote,

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"After the merger, customers may elect to receive fewer channels at a monthly price lower than $12.95; substantially similar programming at the existing $12.95 price; or more channels ... at a modest premium to the cost of one service, and considerably less than the cost of subscribing to both services."

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When challenged about pricing, Karmazin made a promise to the suits in the Senate:

Those antitrust hearings are still going on, where Wisconsin Senator Herb Kohl called out the Sirius CEO, saying the merger would result in "a fabulous monopoly" and "a real bad deal for consumers."

Karmazin tried to put out that fire by assuring the senator and his colleagues that the combined company's not going to raise prices. Sure, he says that now. Just like the kid says to daddy when he's begging for the Corvette keys, "I promise not to speed, really."

Sirius, XM to offer reduced price plan after deal [Reuters, via Yahoo News]

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DISCUSSION

ted-s-famous-kickin-chicken-old
Ted's Famous Kickin Chicken

@maier_m: Cinemagic on XM isn't good enough? (I'm not being a smartass, just genuinely curious.)

There's lots of downward price pressure on the sat. radio providers. The very first question any potential customer asks is, "Why should I pay for something I'm used to getting for free?" That's when one introduces the idea of paying for sound quality and channel diversity, funding content directly rather than via advertisers' products, and above all cost.

And as others have said, it's not a monopoly if there's competition from terrestrial radio, internet radio, iPods, etc. Saying it is would be like saying Netflix was a monopoly in its early days because it was the only company delivering DVDs by mail.