Karmazin Commits To Merger Conditions

By John Eggerton -- Broadcasting & Cable, 4/17/2007 2:34:00 PM

Sirius CEO Mel Karmazin told regulators Tuesday that satellite companies XM and Sirius are prepared to agree to make lower prices, more choice and rebates for blocked adult content conditions on approval of their proposed merger.

We are prepared at the appropriate time to discuss each of the issues with regulators and to guarantee these benefits as a condition of our merger approval, he told the Senate Commerce Committee according to prepared testimony.

"These commitments are more than just words offered to appease regulators," he said. "We view each of these benefits as a "win-win" that will make good business sense."

Karmazin has made regular trips to the hill in the past several weeks, pitching the merger as good for consumers and the satellite radio business.

Karmazin made the argument that the merger would still leave a competitive audio market and said that terrestrial radio, a business he was in for almost 40 years, is still the dominant audio deliver system. He also pointed out that "much of the content available over terrestrial radio mirroring that provided by satellite radio."

At about the same time Karmazin was testifying Tuesday in Washington, broadcasters in Las Vegas for their annual convention were arguing that the merger would be a monopoly. In an interview with FCC Commissioner Michael Copps, NAB President David Rehr asked Copps' what he thought of the merger's prospects. Copps said he would not prejudge the merger since it was currently before the commission, but he did point out that FCC Chairman Kevin Martin had said the merger was "a significant climb" for him, and that it was a "pretty steep climb" for Copps as well.

That was music to Rehr's ears. He has been hammering hard on the merger, saying at an NAB opening session Monday that it would be a government-sanctioned monopoly that "lined the pockets of financiers and corporate executives." Copps said that there seemed to be some disconnect between NAB's argument that broadcasters did not compete with satellite radio when it came to this merger, and the argument that it was "one big happy competitive family" when it came to seeking media ownership rule changes.

Rehr pointed out that the NAB's stance on the merger competition issue was that while satellite radio competed with local radio, it was not a two-way street, with the local station unable to compete with a national, bundled service.