do you not know what "falls through" means.

it means if the merger does not happen(falls through) rates will go up.
thats my point!

((so yes,i agree with you))

Thanks, I get it. Your post looked as to say if the merger happens, the rates will go up. Falls through...meaning merger happening. That's how I understood.

I do. I can't stand baseball & love football.

Since you love football, don't you watch it on TV? I don't understand why anyone gives a crap about football games on the radio. As someone who loves football, I got the NFL Sunday Ticket, so I could WATCH any football game that I wanted to. Even without Sunday ticket, I can't imagine wanting to listen to one game, when I could be watching another one.

The thing that would kill it for me is taking the advantage of having no commercial free competition to add commercials to the programming. I know some of the XM channels have commercials but most don't. The merger statement about still having competition in terrestrial broadcasting was specious in this regard. OTA radio rendered themselves pretty much useless to me years ago when they adopted their limited playlist, incessant DJ babble and ceaseless commercial business model. If XM-Sirius were to adopt this they will lose at least one subscriber as I can listen to babbling DJ's and commercials for free.

On a slightly different topic maybe lovswr is in the office, jobsite or driving when the game is on. Makes the TV a little difficult.

Since you love football, don't you watch it on TV? I don't understand why anyone gives a crap about football games on the radio. As someone who loves football, I got the NFL Sunday Ticket, so I could WATCH any football game that I wanted to. Even without Sunday ticket, I can't imagine wanting to listen to one game, when I could be watching another one.

Here's a for instance:

I live in Nashville, I'm a Titans season ticket holder, I go to games 8 weeks a year. I'm also a Raiders fan. I get back to my car after a Titans game and fire up the Sirius to listen to the Raiders broadcast on my way home.

I love football but can't allways be in front of my TV.

Here's a for instance:

I live in Nashville, I'm a Titans season ticket holder, I go to games 8 weeks a year. I'm also a Raiders fan. I get back to my car after a Titans game and fire up the Sirius to listen to the Raiders broadcast on my way home.

I love football but can't allways be in front of my TV.

Here's the problem with your argument. Before 3 years ago you couldn't listen to Raider games on the radio anyway. What did you do then?

I've had XM for 5 years now, and I love it. But when the government considers this merger I doubt they are going to weigh each and every issue like if a small percentage of people can't pick up their favorite football team on OTA radio, or the fact that since FM has commercials it's not direct competition to XM/Sirius's commercial free selections.

I think the gov will just look at the general overall issue of can the consumer get news, sports, talk and music on other medias like AM/FM, Ipods, the internet, and maybe in the near future wireless.

Here's the problem with your argument. Before 3 years ago you couldn't listen to Raider games on the radio anyway. What did you do then?


That's not a problem with his argument. You're right that he couldn't do that more than 3 years ago. But it probably something that he would have liked to be able to do. Now he can. However, in that situation I would think that a better solution would be to Tivo the Raider game on DirecTV Sunday ticket and watch it when I got home.

I still see baseball as being a much better sport for radio. There are 162 games per they all occur on different days of the week at different times and the "consistency" (for lack of a better word) of the sport makes is easier to more accurately imagine what is happening on the field. For example, we all know that when someone hits the ball, they are going to run to first base. When listening to a baseball game, and the announcer is talking about what the fielder is doing, you still know what the runner is doing.

With football, what you imagine is happening when listening on radio, always ends up being completely different than what actually happened.

There's no doubt baseball is by far the best sport for the radio, but as far as a monopoly discussion is concerned that should be factor either.

My point is I doubt the FCC is going to care that a guy in NYC can't listen to his Raiders if this merger occurs and the guy feels he's priced out of the sat radio market. Nor will they worry if that same guy is a A's fan. There's other ways to watch or listen to the games or get the scores and high lites.

Even the government can't make everybody happy.

Here's the problem with your argument. Before 3 years ago you couldn't listen to Raider games on the radio anyway. What did you do then?

I've had XM for 5 years now, and I love it. But when the government considers this merger I doubt they are going to weigh each and every issue like if a small percentage of people can't pick up their favorite football team on OTA radio, or the fact that since FM has commercials it's not direct competition to XM/Sirius's commercial free selections.

I think the gov will just look at the general overall issue of can the consumer get news, sports, talk and music on other medias like AM/FM, Ipods, the internet, and maybe in the near future wireless.

It is something I would very much liked to have been able to do three + years ago.

I don't even subscribe to Sunday ticket, for a few reasons:

A) As a Titans season ticket holder I'm out the door at 8:30 - 9:30 AM to go to the games on Sundays (Sometimes earlier if I'm gonna hang with friends and tailgate). The games here start at noon. After the games, with stadium traffic I'm not home til near halftime of the late games (Later if I tailgate). Sat radio offers me a low cost, mobile alternitive to keep up with my west coast team. :)

B) Between the $$$ I lay out for the season tickets and the amount of time I'm not home on Sundays. It doesn't make real financial sense to pay for something I'd rarely get to watch. I'm one of those weirdos that actually prefers to see the games live anyway.

C) I'm a Comcast subscriber so it's not even availible on my TV provider. :(

The FCC won't allow it. I say it's the exact same scenario as you had when Direct TV and Dish tried to merge. It's a monopoly. It won't happen. I'd bet a grand on it, no problem.

What about the content argument? Most of XM and Sirus is their own content. Dtv and Dish are nothing but content distributors not providors.

It's not the same of the failed Dish/DirecTV merger. Not even close.

There's MUCH more competition now,and because of wireless technology in the near future in the audio field then there was in the video field in 2002.

And as far as content goes there's nothing on satellite radio beside Stern you can't get elsewhere.

The FCC won't allow it. I say it's the exact same scenario as you had when Direct TV and Dish tried to merge. It's a monopoly. It won't happen. I'd bet a grand on it, no problem.
Times were different back then. The Internet was not such a big threat. People were not able to download videos to their computers. FiOS TV did not exist.

You also had two profitable companies who wanted to be more profitable, not two companies losing money fighting for their long-term existence.

The FCC made a mistake not allowing that merger. The competition is not between Dish and Echo, it's between Satellite TV and Cable TV, and increasingly, Internet TV.

They shouldn't make the same mistake again.

Times were different back then...you also [didn't have] two companies losing money fighting for their long-term existence.

There are many differences between the two proposals; I believe you've hit on the key one. Here's a letter to the members of this panel I crafted after listening (over XM) to the full hearing.

Feel free to post a comment - or, better yet, write them directly yourselves.

=========
The Honorable Representative John Conyers
Chairman, Anti-Trust Task Force
Chairman, House Committee on the Judiciary
Washington, D.C. 20515


Re: Comments on proposed XM-Sirius merger


March 2, 2007


Dear Representative Conyers:


Let me say it was on satellite radio that I learned of and listened to the Judiciary Committee's Antitrust Task Force's hearing on this proposed merger. (I am an XM subscriber.)

I'm confident I would not have learned of the hearing --nor would I have been able to listen to it-- through any other medium readily available to me: not by newspaper, not by terrestrial radio and not by broadcast television. Nor by the internet, despite my habit of browsing ten major newspapers daily.

In short, I was able to follow the committee's hearing in full only because of satellite radio, specifically XM and its C-SPAN channel. I am extremely grateful that satellite radio was able to fill this niche.

The following morning's reports in the NY Times, LA Times and Washington Post failed to provide the fine-grain resolution that satellite radio afforded me. On satellite radio, the invited panelists and the concerns raised by committee members were not parsed by a reporter nor trimmed by an editor. Not even National Public Radio could have fully exposed me to this hearing because they simply can't devote that much bandwidth to any one topic. But satellite radio can.

Accordingly I ask members of Congress keep foremost in mind that no existing traditional media outlet, commercial or non-commercial, has the capabilities --some still undeployed-- offered by new-technology services like satellite radio.


My purpose in writing, though, is not to laud XM radio and C-SPAN, but to offer my personal observations on a number of dimensions related to the current state of affairs in satellite radio touched upon, however briefly, during the committee's hearing.

Please allow me the following essay that I believe appropriately frames this issue. I hope you will find these thoughts to be of value to you.

First, I would issue a caution to lawmakers and regulatory agencies that they not fall into a complacent view of media services. Specifically, they should not deem services --particularly terrestrial broadcast radio-- to be 'competitive' simply because it exists across America's landscape in large numbers. The fact that commonplace programming is replicated in one market after another from coast to coast, doesn't make it competitive (except perhaps solely in the sale of commercial advertising.) Despite 10,000 or so radio stations in the U.S., there is a paucity of truly distinctive broadcast services --and exceedingly few national programs-- available over terrestrial radio.

Second, just as the number of participants alone cannot evidence genuine competition, effective competition cannot be realistically defined without reference to the sensibility and expectations of consumers. If a normal person finds that a product or service poses a risk that erodes the perceived value of that product, it's highly doubtful that the product or service can genuinely be considered competitive in today's consumer markets. Yet today, prospective purchasers of satellite radio face just such a risk -- a risk that can dissuade a consumer from purchasing the service.


This latter consumer dilemna has now migrated well upstream, landing in the laps of the nation's automakers who now find themselves facing the same quandary that perplexed early-adopter satellite radio consumers. The auto industry must now choose between offering XM or Sirius receivers in their new car models because, for all practical effect, satellite radio is either XM or Sirius under the constraints currently imposed by law and regulation.

I'm confident automakers don't like being forced into making that choice for their customers. It's a no-win situation, because whichever satellite radio service they install in their vehicles, it can't meet all their consumers' expectations. (And automakers aren't in the business of not meeting consumer expectations.) While one satellite radio service can satisfy baseball fans, the other can satisfy football fans. But neither satisfies the many who are fans of both.

In the eyes of the auto manufacturers, installing both services is simply not practical. This presents a serious limitation impinging on consumer choice in the purchase of an automobile, a large-ticket, highly-personalized purchase if ever there was one. Potential buyers aren't enthusiastic to learn that the installed satellite radio can only deliver one -not both- of their favorite sports. They rightly consider this confusing.

I suspect this automaker quandary has propelled much of the desire for XM and Sirius to seek a merger. (Of course, slower-than-anticipated market penetration and continuing financial loses has provided additional impetus.) No more so than consumers, the nation's automakers shouldn't be needlessly forced into choosing between a rock and a hard spot.


A 'win-win' situation would make satellite radio its own radio band, enabling every satellite receiver to tune into all available programming on the band. This would avoid any requirement that automakers install a too-expensive, needlessly complex dual-band receiver so that their customers can tune into both baseball and football (and all other currently exclusive programming).

Forcing an overly-complex, functionally redundant and needlessly expensive, over-engineered "dual-band" receiver1 into the dashboards of new cars is neither necessary nor appropriate to ensure vibrant competition in the satellite radio band. That instead would be a clumsy regulatory 'solution' serving only to entrench the inherently-flawed initial duopoly industry-structure2 imposed by regulators. It won't promise to stem the flow of red-ink into XM's and Sirius' ledgers nor will it accelerate the pace of consumer acceptance.

A single-band receiver is fully capable of pulling in all programming --XM, Sirius or any other-- in the satellite band. And auto manufacturers will be happy to install and make available to customers a single-band satellite radio receiver within the millions of new cars manufactured and sold every year. So too will after-market electronics manufacturers. Treating satellite radio as a distinct frequency band is the only way that successful levels of consumer uptake of this new national broadcast service will occur.

There's no compelling reason or need to continue requiring that consumers desiring to listen to both baseball and football (or any other heretofore exclusive XM or Sirius programming) must pay twice as much as necessary than if a single ubiquitous, nationwide satellite radio service were available in the U.S.. Yet this Hobson's choice (one inherently rooted in the current duopoly2 structure imposed by regulation upon satellite radio service) is the inevitable result if XM and Sirius are required to maintain a regulatory fantasy that they are competing services rather than a new radio band -- a single band that potentially can be populated by a variety of competing programming, just as how the FM and AM radio bands have evolved.

Unless lawmakers and regulators alike recognize that satellite radio is, essentially, an entirely new radio band, they will consign satellite technology's great promise to an excruciating continued economic limbo characterized by slow consumer uptake, needlessly high monthly subscription rates and an unresolved, perplexing irritation to both consumers and the auto industry. This would only endanger the economic viability of the remarkable capacity of these satellite bands and prematurely bring to a halt the noteworthy innovation these two companies and their supporting electronics manufacturers have brought to America's languishing, rather undistinguished --and now ever more concentrated and increasingly homogeneous-- radio industry. That would constitute a gross regulatory failure.

The artificially-created separation of and forced competition between two services that share the satellite-band has created the untoward consequences which have brought satellite radio back to its birthplace, the corridors of Washington, D.C. Maintaining an artifice first crafted in 1997 only promises to prolong and exacerbate these consequences. If appropriate conditions can be devised, the merger of these two service providers need not threaten consumer interest in accessing a wide variety of national programming and need not preclude other services from entering the satellite-band.


Sincerely,


Thomas A. Heller
Columbus, Indiana


Footnote 1: Such a "dual-band" receiver would require duplicate circuitry for signal decoding, demodulation, de-encryption and error-correction.

Footnote 2: The imposed duopoly market structures initially created for other nascent communication services have not displayed as detrimental an effect on consumer acceptance and industry growth as it has to date in satellite radio. While this principally was due to a uniquely fortuitous technical factor (briefly discussed herein), the ordinarily undesirable characteristics of duopoly markets was also masked by consumers' demonstrated low price elasticity for mobile telephone service.

In the instance of mobile telephony, the network segregation/fragmentation outcome (i.e. the proliferation of technologically non-compatible wireless systems like TDMA, CDMA and GSM that naturally resulted from a regulatory-imposed duopoly market structure) was overcome only by each system's ability to interconnect with the pre-existing and ubiquitous public switched telephone network (PSTN). Without this interconnection, a customer of one wireless carrier wouldn't be able to talk wirelessly with a customer of a competing wireless carrier, even if they lived across the street from each other.

Absent the availability of PSTN as an interconnecting intermediary, the technological incompatibilities between the various wireless telephone systems would have dramatically impaired the market acceptance and economic health of mobile telephony which once, like satellite radio, was a nascent communications industry.

As a direct satellite-to-receiver broadcast medium, however, satellite radio has no possibility of a nation-girdling interconnecting intermediary offering the same sort of 'saving grace' PSTN did for mobile telephony. The incompatible, competing and financially struggling satellite radio services that resulted from satellite radio's imposed duopoly can't be 'stitched together' other than by unifying their respective frequency bands.

F.C.C. Chief Questioning Radio Deal


By STEPHEN LABATON
Published: March 7, 2007
WASHINGTON, March 6 — 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.

As he sought to sell the proposed merger of Sirius Satellite Radio and XM Satellite Radio to Congress, and by extension to regulators like Mr. Martin, 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 Mr. Karmazin’s testimony to a House committee, Mr. Martin said that 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).

Mr. Karmazin, reached on Tuesday, said his testimony was not misleading and that he meant to say two things: subscribers wanting to keep their existing service would not face a price increase, and listeners who wanted the best of both services would pay less than the combined rate of $25.90.

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

“The commission will need to determine the benefits to consumers of this deal, and in doing that, we will need to carefully look at what price will be frozen and what consumers will be getting for that price,” Mr. Martin said, adding that the hearing left those issues unclear. “When they talk about freezing rates and lowering rates, are they talking about it in terms of the current rate of $12.95 for each service, or are they referring to the combined rate of $25.90?”

The two people who talked to Mr. Martin — one working to get the deal done and the other a critic — said they understood his comments to reflect his skepticism about both the deal and the way it was being sold in Washington as more beneficial to consumers than it might actually be. The two did not want to be identified because they said these were private conversations.

Mr. Martin said that the proposed deal had “not even been filed with the commission yet,” and that he would carefully consider the arguments of both the supporters and the opponents before reaching a decision.

The $13 billion proposed deal cannot be completed without the permission of antitrust lawyers at the Justice Department and a majority of the five commissioners at the F.C.C.

The commission gave the two companies spectrum licenses for the satellite radio services in the 1990s on the condition that they not merge, and it would have to waive that condition for the deal to go forward.

Mr. Martin has said that the companies have a high hurdle to conquer in persuading the commission that the deal would be in the public interest.

At last week’s hearing before the antitrust task force of the House Judiciary Committee, Mr. Karmazin insisted that subscribers could count on a significantly greater offering of programs and no increase in prices. That juxtaposition led some lawmakers to conclude that consumers who pay the same monthly fee for one service would be getting the benefits of the other.

“This merger will give people more choice than they have before and lower prices and, very importantly, less confusion,” Mr. Karmazin testified. “Our vision of the way it works is that if you are an XM subscriber, you have the Major League Baseball, you have whatever number of channels available to you now. But what we contemplate is that we would take some other content, and again we have to work with our content partners. But the hope would be that we would get Nascar to agree to be on XM as well. We’ll get the N.F.L. to agree to be on XM as well.”

At another point in the hearing, he said, “We are saying we are not going to raise our price, and we’re going to offer the consumer something that they have not had before.”

Critics said that the companies had not been candid about their intentions to offer more services for more than $12.95.

“It’s a sleight of hand going on here,” said Gene Kimmelman, vice president for federal affairs at Consumers Union, which opposes the merger. “They highlight the price freeze for the old package. They’re leaving the consumer with the impression of a price freeze. They say you will get the best of both services. But they never tell you what the rate will be for that.

“Regardless of what Mr. Karmazin intended,” Mr. Kimmelman went on, “he has left many consumers with the impression they will receive a combined package of Sirius and XM channels for $12.95, when in reality the price will probably be much higher.”

Mr. Karmazin is scheduled to appear before a second Congressional panel on Wednesday.

In the interview on Tuesday afternoon, he said he thought he had been clear that to get the best of both XM and Sirius, consumers would have to pay more than the monthly rate of $12.95, but less than the combined rate of $25.90. Consumers who just want to stay with their existing lineup would be guaranteed the same price, he said.

“If the merger is approved there will be lower prices and more choice,” Mr. Karmazin said. “If the merger is not approved, there is no discussion on price and there is no discussion about more choices.”


From N.Y Times http://www.nytimes.com/2007/03/07/business/media/07radio.html?ex=1330923600&en=7ab5b913d47fface&ei=5089&partner=rssyahoo&emc=rss

F.C.C. Chief Questioning Radio Deal

That's a good piece, Gary; thanks for posting (tho' this forum seems more concerned with Howard Stern and Opie & Anthony).

The NYTimes story raises some pertinent questions and will help the discussion proceed. I'll be interested to listen to/watch the upcoming hearing.

Thankfully the FCC has no say on this merger.

Thankfully the FCC has no say on this merger.

huh? time to get your facts straight:

The $13 billion proposed deal cannot be completed without the permission of antitrust lawyers at the Justice Department and a majority of the five commissioners at the F.C.C.

yeah... its a tough call for mel.... but in the end... he has to be clear of what he wants from the deal and what it entitles the consumer

F.C.C. Chief Questioning Radio Deal

In the interview on Tuesday afternoon, he said he thought he had been clear that to get the best of both XM and Sirius, consumers would have to pay more than the monthly rate of $12.95, but less than the combined rate of $25.90. Consumers who just want to stay with their existing lineup would be guaranteed the same price, he said.



Thus ends my interest in this merger. I'm not paying extra for Sirius content.

Thus ends my interest in this merger. I'm not paying extra for Sirius content.

Consumers who just want to stay with their existing lineup would be guaranteed the same price, he said.

Consumers who just want to stay with their existing lineup would be guaranteed the same price, he said.

Right, I got that. In other words, I have no interest in buying extra Sirius channels on an a la carte basis over and above my standard XM subscription price. Mel’s previous comments made it sound like content would be combined and offered at no additional charge.

I guessing, because so far all this pricing crab is confusing. But anyway..

After the merger if you want XM's existing line-up it's what it is now. $13. And there will probably be a deal if you want both full line-ups combined, maybe $24.. Whatever...

Same with Sirius..

But with the ala carte pricing lets say I want XM's music package, maybe 7.99.. Plus I want Sirius's NFL, maybe $3.99, and Stern, maybe another $3.99.. So I'd be paying about $16 a month..And vise versa if you have Sirius's basic package but want the MLB, etc.

Thats the way I have taken all of Mel's talk so far..

I guessing, because so far all this pricing crab is confusing. But anyway..

After the merger if you want XM's existing line-up it's what it is now. $13. And there will probably be a deal if you want both full line-ups combined, maybe $24.. Whatever...

Same with Sirius..

But with the ala carte pricing lets say I want XM's music package, maybe 7.99.. Plus I want Sirius's NFL, maybe $3.99, and Stern, maybe another $3.99.. So I'd be paying about $16 a month..And vise versa if you have Sirius's basic package but want the MLB, etc.

Thats the way I have taken all of Mel's talk so far..


I new barbie845 wanted Stern;)

Mel Karmazin was in front of congress again yesterday answering questions about the Sat. radio merger. I found a couple articles on the merger that I still found a bit vague on the pricing issue.

From the Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2007/03/07/AR2007030702243.html):

XM, Sirius Pitch Merger to Hill

By Charles Babington
Washington Post Staff Writer
Thursday, March 8, 2007; Page D04

The price of satellite radio service has become a sensitive topic in the debate over whether the nation's two space-based radio companies should be allowed to merge, and lawmakers zeroed in on it yesterday.

XM Satellite Radio Holdings of the District and Sirius Satellite Radio have charged customers $12.95 a month for all-or-nothing access to their many channels for several years. If federal regulators permit the companies to merge, listeners may have more options, at prices above and below that figure, executives told a House panel yesterday.

The Federal Communications Commission licensed the companies in 1997 on the condition they stay separate to encourage competition. But their executives say the audio-entertainment field has become so fiercely competitive that they should be allowed to join forces.

Sirius chief executive Mel Karmazin tried to reassure House members yesterday that customers would not be gouged if the FCC approves the merger. To receive all of XM's and all of Sirius's content now, a customer must have two receivers and pay $25.90 a month, Karmazin told the telecommunications subcommittee of the House Energy and Commerce Committee. Under a merger, he said, "prices will drop significantly from that." The discount, he said, probably would be "closer to 10 [dollars] than to 2."

Customers seeking fewer channels would be able to order such service at a yet-to-be-determined amount less than $12.95 a month, said Karmazin, who would be chief executive of the merged company.

Karmazin's earlier testimony to House members left some with the impression that a merged XM-Sirius company would not raise monthly subscription rates above $12.95, even if content from the two companies were combined.

The confusion led to an indirect rebuke of Sirius this week by FCC Chairman Kevin J. Martin, a Republican. Martin told the New York Times that some consumers may be surprised to learn a combined XM-Sirius package might cost more than $12.95 a month. Martin's office said yesterday he had no further comment on the matter.

Groups representing broadcasters and consumers denounced the proposed merger at yesterday's House hearing. The plan has "very severe anti-competitive" implications, said Gene Kimmelman of Consumers Union.

Peter H. Smyth, president and chief executive of Boston-based Greater Media, which owns 20 radio stations in four states, said a Sirius-XM merger would lead to less competition, higher subscription fees and losses of jobs and innovations.

Karmazin said consumers would benefit from more choices, such as having the National Football League and Major League Baseball on one satellite network. The NFL is now on Sirius only and baseball is on XM.

____________________________________________________________ _____
And this article from Reuters (http://news.yahoo.com/s/nm/20070308/media_nm/xm_sirius_congress_dc_3):

Sirius to charge less than $26/month post merger
By Rachelle Younglai
Wed Mar 7, 10:14 PM ET



WASHINGTON (Reuters) - Sirius Satellite Radio Inc. on Wednesday tried to clear up confusion over the cost of its service after buying rival XM Satellite Radio Inc. by telling lawmakers that it would be less than $25.90, the price of two services combined.

"If our merger is approved, we will offer consumers a much more attractive choice -- the best of each service on one radio at a price well below the cost of the two services today," Sirius Chief Executive Mel Karmazin told a House telecommunications subcommittee hearing.

Karmazin did not say specifically what the new price would be, except that there will be a "significant discount." XM and Sirius each charge subscribers $12.95 monthly.

When asked if the discount would be around $10 or $2, Karmazin said it "looks closer to 10 than to two."

Last week, Karmazin told a House Judiciary antitrust committee hearing that Sirius was ready to make concessions in order to get the deal approved, such as capping prices.

During the hearing on Wednesday, Karmazin tried to clarify what the price of the combined services would be over what the price of the separate services would be after the merger.

"There was some confusion on what we said about pricing," he said, pointing out that an XM or Sirius subscriber paying the $12.95 fee per month would not pay more for the same service after the merger.

"There is an opportunity to pay less" than $12.95, Karmazin said. "If you like the idea of having some content from Sirius and some content from XM, where today you have to buy (both services) and pay $12.95 each ... we will make an offering for less than the combined cost."

Sirius offers channels that include shock jock Howard Stern and Nascar auto racing while XM has programing like Major League Baseball and talk show host Oprah Winfrey.

The proposed deal needs to be approved by the Justice Department's antitrust office as well as the Federal Communications Commission, which issued the satellite radio licenses in 1997 on the condition that the two companies would never merge.

The FCC has said it would consider waiving that rule if asked. The deal does not need approval from lawmakers, but they could pressure the regulators.

Consumer groups have criticized the proposed deal, saying it could mean higher prices and obsolete equipment for some subscribers.

However, the companies say the merger will not hurt consumers because satellite radio faces competition from other forms of audio like traditional AM/FM radio and personal audio players -- an assertion the Consumers Union derides.

"While AM/FM radio, iPods and other music recording and listening devices can offer similar prepackaged music or local signals similar to what satellite radio offers, none of them can offer immediate national programing, including live professional sports games from across the country to listeners across the nation," Consumers Union Vice President Gene Kimmelman said.

Here's another article that could have a direct bearing on the merger deal:

Will Web Radio Get Turned Off?
Louis Hau, 03.07.07, 6:00 AM ET

Traditional radio may be losing its audience, but Internet radio stations--or more accurately, Web sites that stream music over the Web--are growing in popularity. But their commercial prospects could worsen under new rules that will raise their costs dramatically.

Last week the U.S. Copyright Royalty Board, an obscure arm of the Library of Congress, voted to more than double the fees Web sites that stream music must pay record companies.The higher rates will affect all Internet radio businesses, from mom-and-pop commercial Webcasters to big portal destinations such as Time Warner's (nyse: TWX - news - people ) AOL and Yahoo! (nasdaq: YHOO - news - people ); it will also affect traditional and satellite radio companies that provide online feeds of their broadcasts.

Under the decision, Internet radio businesses will have to increase the royalty they pay for each song they stream from .08 cents in 2006 to .19 cents in 2010. That doesn't sound like much, but given the large number of songs that they stream, Web music companies say the cost could be enough to hobble their industry.

"If we do not come up with a way to avoid paying these royalties, we're going to have to go out of business,'' said Bill Goldsmith, who runs Internet radio station RadioParadise.com in Paradise, Calif. "There's absolutely no way we could survive under this rate structure.''

Goldsmith said his company has been profitable since 2003, but predicted the new royalty rates would quickly put it in the red. While he wouldn't disclose specific numbers, he said his station's annual royalty fees would eclipse its annual revenue.

Andy Lipset, managing director of Ronning Lipset Radio, a New York company that sells online radio advertising, said the new rates will hinder the development of an emerging industry that is finally gaining traction with advertisers.

"What these royalty rates do is cripple a business just getting its start,'' Lipset said. "It's really just learning how to walk."

SoundExchange, a former subsidiary of the Recording Industry Association of America, collects the royalties and distributes half of the fees to the performers on the recordings and the other half to the recordings' copyright owners, which are usually record labels.

SoundExchange Executive Director John Simson said the new royalty rates for Internet radio were balanced and fair, particularly given the growing influx of advertising money into the market.

Bridge Ratings estimates that Internet radio stations and online simulcasts of terrestrial radio broadcasts had about 68 million weekly listeners in 2006, up 31% from 2005, and more than seven times the audience for satellite radio. By 2010, Bridge expects that audience to grow to about 196 million weekly listeners.

Advertisers have been taking notice of this growing listener base. Internet radio stations generated about $500 million in ad revenue in 2006, J.P. Morgan estimated in a report on the industry in January. That figure was dwarfed by the $20 billion traditional radio advertising market, but was 10 times larger than the estimated $50 million that online radio generated in 2003.

Internet radio ad rates are also climbing. J.P. Morgan estimated that the cost of reaching 1,000 listeners, or CPM, via music Web sites rose from $1 in 2003 to $5.59 in 2006. But even larger Internet radio companies, who have been the chief beneficaries of the growing ad market, may have a hard time with the new fees. David Oxenford, a Washington, D.C., attorney who is representing small Webcasters, said the higher rates raise the question of whether big Web portals, such as Yahoo! and AOL, will continue to offer free Internet radio stations.

Representatives for AOL and Yahoo! declined to comment on the new rates, referring all queries to the Digital Media Association, a trade group that represents online audio and video companies. In a statement, Jonathan Potter, the association's executive director, warned that the association's members will have to reevaluate "the viability of the Internet radio business.''

Another key provision of the Copyright Royalty Board's rate decision stipulates that Internet radio stations must pay an annual fee of $500 for every music channel they operate. Both SoundExchange and Internet radio stations are awaiting clarification on what the board deems to be a "channel" because it could have significant ramifications for music services like Pandora that provide customized audio streams for listeners based on their music preferences.

In addition to streaming music on its own Web site, Pandora also powers the Internet radio service on Microsoft (nasdaq: MSFT - news - people )'s MSN portal.

"The rates are disastrous,'' Pandora Chief Executive Joe Kennedy said in a statement. "I'm not aware of any Internet radio service that believes they can sustain a business at the rates set by this decision. The only reason the services are not shutting down today is the belief that rationality will ultimately prevail here, either through appeal or Congressional intervention."

Because the total audience for Internet radio far exceeds that of satellite radio, Oxenford said the impact of the new royalty rates could become an issue in the Federal Communications Commission's deliberations regarding the proposed merger between XM Satellite Radio (nasdaq: XMSR - news - people ) and Sirius Satellite Radio (nasdaq: SIRI - news - people ).

XM and Sirius, which are eager to play down antitrust concerns surrounding their planned merger, regularly cite Internet radio as one of the competitive challenges they face.

The new Internet radio royalty rates "could potentially impact all sorts of government decisions where they're considering market power in the audio delivery marketplace,'' Oxenford said.

As it happens, the Copyright Royalty Board is also expected by the end of the year to set performance royalty rates for music broadcast via satellite by XM and Sirius.

Andy Lipset of Ronning Lipset Radio said his company has been able to persuade increasing numbers of traditional radio advertisers to buy online radio ads. One of the key hurdles has been the fact that the vast majority of traditional radio advertising is aimed at a local market, whereas Internet radio has a national, and even international, reach.

"The market was really starting to take hold,'' Lipset said."You're going to have guys go away,'' he said. "They're going to look at the numbers, and they're going to say, 'There's no way this is going to happen.' "

From Forbes: http://www.forbes.com/technology/2007/03/06/radio-internet-ruling-tech-cx_lh_0307radio.html?partner=rss

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Both XM & Sirius stream large chunks of their content on line. Who would benifit from driving their costs up?

If Sat radio does compete with internet radio what does that do to the anti -trust arguments?