Karmazin: Prices Won’t Rise

WASHINGTON Sirius Satellite Radio CEO Mel Karmazin on Wednesday attempted to clear up confusion over the price customers would have to pay if his company and XM Satellite Radio are allowed to merge.

Karmazin told lawmakers on the House Commerce Committee’s telecommunications panel that the most customers would have to pay is $25.95 if they chose to receive all of the programming available on both services.

“Prices will not go up,” Karmazin told Rep. Ed Markey, D-Mass. “The only increase in pricing would be if you take content from both companies and their price comparison is $25.95, and the price will drop significantly from that.”

Karmazin last week had left the House Judiciary Committee with the impression that the combined service would cost no more than the current $12.95 customers pay for one service.

While Karmazin said $25.95 would be the maximum for the immediate future, he said some customers could pay less than the subscription price for a single-service package that doesn’t include all the programming. For example, a music fan who didn’t want any sports could opt for a package that would cost less than $12.95, he told lawmakers.

He told lawmakers that they did not have to take him on his word alone, and that there were methods to enforce the price controls.

“You can come up with a way of holding our feet to the fire,” he said.

Karmazin is attempting to convince lawmakers, the Justice Department, the FCC and consumers that allowing the two satellite services to combine is a good idea.

There was no firm consensus among lawmakers about the proposed $13 billion deal.

Broadcasters and some consumer groups are fighting the plan. They contend that the services are a discrete market and should not be allowed to combine, as a single satellite service would have undue monopoly power.

Karmazin contends the two services compete with everything from terrestrial radio to MP3 players.

In a related development, the Senate Judiciary Committee’s antitrust panel said Wednesday that it would hold a hearing on the proposed Sirius-XM combination on March 20.