NAB on Sirius-XM a la Carte Proposal: Thumbs Down

Trade Group Claims Subscribers Would Pay More per Channel

By John Eggerton -- Broadcasting & Cable, 8/7/2007 5:30:00 PM

The National Association of Broadcasters analyzed the a la carte proposal of Sirius Satellite Radio and XM Satellite Radio and found it wanting.

No surprise there: The NAB has been fighting the merger as a monopoly and a government bailout of companies that overpaid for programming.

Sirius and XM said they would simply be a stronger competitor in a market with terrestrial radio, cable radio and audio downloads, and they had to pony up for strong programming since they are a pay service competing against free radio.

In its analysis, the NAB said customers would pay more per channel than they do now, adding that the offering has enough limitations that make them "not a true a la carte choice."

The trade group said it was pitching the staff analysis to the Federal Communications Commission and the Justice Department Tuesday, both of which have to sign off on the deal. "If ‘a la carte’ is intended to mean more choice and lower prices, XM and Sirius fail the test," NAB executive vice president Dennis Wharton said.

In a joint statement, XM and Sirius responded to the criticisms.

“The NAB opposes the merger of XM and Sirius to protect AM/FM radio from competition, not to protect consumers," they said. “As more and more consumers voice their support for the merger, the more fearful of increased competition the NAB becomes and the more desperate their actions in response."

The two companies added that the NAB's analysis "fails to mention that Sirius and XM will reduce the price for entry-level satellite-radio service to $6.99 [per month] -- a reduction of 46% -- and that the proposed offering will not require existing subscribers to pay more for the broad selection of content they enjoy today."

FCC chairman Kevin Martin is a big fan of a la carte.