FCC chief questioning XM-Sirius deal: paper

Reuters ^ | Wed Mar 7, 2007 4:33AM EST

[It Aint Easy]

NEW YORK (Reuters) - Kevin J. Martin, the chairman of the Federal Communications Commission, has privately questioned recent congressional testimony by the architect of a proposed merger of the nation's two satellite radio companies that subscribers would both pay the same monthly rate and receive significantly more programming, The New York Times reported.

As he sought to sell the proposed merger of Sirius Satellite Radio (SIRI.O: Quote, Profile, Research) and XM Satellite Radio (XMSR.O: Quote, Profile, Research) to Congress, Mel Karmazin, the chief executive of Sirius, vowed last Wednesday that prices would not be raised and that listeners would benefit enormously by getting the best programming from both companies.

But in separate conversations with two people after Karmazin's testimony to a House committee, Martin said subscribers may be surprised to learn they may actually have to pay more than the current monthly rate of $12.95 if, for example, they want to receive all the games of Major League Baseball (now available only on XM) as well as all the professional football games (now only on Sirius), the Times reported.

Martin, in an interview on Tuesday, suggested that the details had not been clear from the testimony, the Times said. He emphasized that he was not questioning the motives or candor of Karmazin but that there was "a need for greater clarity" over what was being proposed for fees and programming, the Times reported.

Representatives from XM, Sirius and the FCC were immediately unavailable for comment.

[It Aint Easy]

Satellite Radio (Sirius/XM) Ping List
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[Yo-Yo]

The merger ain't gonna happen. Period.

I hope Howard Stern sold a big chunk of Sirius stock up front.

[dfwgator]

Why not? What business is it of the gubmint?

[BurbankKarl]

WIth that ruling on online radio royalties, the satellite radio companies should be rolling in the cash.

[TheBattman]

Ummm.... people actually PAY for radio....????

Seriously - if someone feels that they need to pay for radio (yes, I understand the convenience of never having to scan stations for programming, but goodness...).

[mutley]

"The merger ain't gonna happen. Period."

That was my initial thought too. But after really considering all the facets, I changed my mind. Also, I can't imagine that someone like Karmazin, would not have fleshed this out completely with an army of lawyers who are experts in the area of mergers, prior to the announcement. I hope it goes off, my shares of SIRI are currently screaming for a lifesaver.

[Yo-Yo]

Public Airwaves and all that. Even the satellites use public airwaves.

[Yo-Yo]

Oh, I think the merger should go through. I also thought the DirecTV-Dish merger should have gone through as well. I'm basing my opinion on the rejection of the DirecTV-Dish merger.

[mutley]

"Public Airwaves and all that. Even the satellites use public airwaves."

I don't think so. Public airwaves are free. If you pay, it's not public airwaves anymore.

[AVNevis]

I have satellite radio mainly for the cable news channels. I agree, most anything else isn't worth the money.

[mutley]

"Oh, I think the merger should go through. I also thought the DirecTV-Dish merger should have gone through as well. I'm basing my opinion on the rejection of the DirecTV-Dish merger."

Me too. But I think the arguments that resulted in that conclusion, can be much more easily defeated now, especially after that result and it's efforts are scrutinized.

[Yo-Yo]

TV stations need a license from the FCC to broadcast. Radio stations need a license from the FCC to broadcast. Satellite radio, Satellite television, and cell phone operators all need licenses to operate.

The FCC is mandated to carry out the will of Congress in the use of our public airwaves.

Congress has auctioned off billions in spectrum in recent years to cell phone operators.

You pay to use the public airwaves.

[mutley]

Would I be wrong to say that satellite radio does not fall under the same amount of authority, which governs free radio? And ultimately, the FCC has less to say here, as far as a merger?

[M. Dodge Thomas]

All I know is this: I subscribed to Sirius because it had 1) a chamber music channel and 2) a good "folk" channel (deep playlist, lots of unusual, quirky stuff). Both were gone after the first year. Meanwhile, their "Pure Jazz" channel - the only one I'm still interested in - has a playlist about 200 tunes deep.

I realize that this is what the market wants, but still...

[GAB-1955]

You'd be wrong. The FCC ultimately provides the licenses for the satellite services, which are on a different band (c. 2200 MHz) than most digital radio (c. 1400 MHz) around the world. This was because the U.S. military uses the 1400 MHz band in the Americas and doesn't want to give it up.

The problem is that the FCC licensed TWO services, not one. It isn't the FCC's fault that the licensees lost more money than they expected. However, with only one service, satellite radio starts to resemble your friendly cable television provider.

[kingu]

Seriously - if someone feels that they need to pay for radio (yes, I understand the convenience of never having to scan stations for programming, but goodness...).

When I'm driving 1200 miles at a time, I enjoy the same station throughout the trip. If I'm going to get on the freeway in a few minutes in an urban area, I can pop on the traffic for that region.

But, all that being said, XM should tell Sirius to take a flying leap. Glad I'm not invested in either company - XM has worked hard to pay off their debt, rather than Sirius working hard to create more.