Press Release
Consumers Beware: Don’t Expect Combined XM and Sirius Radio for $12.95 a month
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- The satellite radio companies are not coming clean with American consumers about their pricing plans under a combined company, according to the testimony of Consumers Union, Consumer Federation of America and Free Press before today's House Telecommunications Subcommittee hearing.
"The heads of XM and Sirius want consumers to believe that prices won't rise after a merger, but that's probably not the case. By highlighting a price freeze for the old package of services, they leave the impression that's what consumers will pay for the new, combined offerings. But they haven't really said what the new prices will be," said Gene Kimmelman, Vice President of International and Federal Affairs at Consumers Union.
In addition to urging careful scrutiny of the impact the merger could have on consumer prices and choices, the organizations called upon Congress and federal regulators to address the lack of competition, lack of local content, and lack of diversity in ownership in the current radio marketplace.
"The XM-Sirius merger simply cannot be considered in a vacuum, independent of the deplorable state of competition in radio, the needs of radio listeners and communities for sources of diverse local news and information, and the significant barriers facing independent artists and commentators and would-be minority station owners," Kimmelman said.
"It is time to take advantage of digital technological breakthroughs and devise incentives to expand local and minority ownership opportunities in radio and other media and to hold the line against the greatest threat to a competitive and diverse media: mergers that concentrate ownership in too few hands."
"Offers of conditions on the mergers should be taken with a grain of salt," said Mark Cooper, Director of Research for the Consumer Federation of America. "The recent track record of conditions has been abysmal and the satellite radio industry has already proven that it cannot be trusted to live up to conditions imposed on it."
The satellite radio licenses were issued in 1997 subject to the condition that the licensees never merge. The licensees promised to offer the public interoperable radios that would work with both systems. Ten years have passed and there is no such interoperability. "In short, from day one the satellite radio companies have failed to meet the conditions of their licenses and the public has suffered as a result," added Cooper.
The groups called on Congress, the Federal Communications Commission and antitrust authorities to put the brakes on the merger unless and until significant questions on competition, and consumer impacts are fully addressed and satisfactorily answered.
"The heads of XM and Sirius want consumers to believe that prices won't rise after a merger, but that's probably not the case. By highlighting a price freeze for the old package of services, they leave the impression that's what consumers will pay for the new, combined offerings. But they haven't really said what the new prices will be," said Gene Kimmelman, Vice President of International and Federal Affairs at Consumers Union.
In addition to urging careful scrutiny of the impact the merger could have on consumer prices and choices, the organizations called upon Congress and federal regulators to address the lack of competition, lack of local content, and lack of diversity in ownership in the current radio marketplace.
"The XM-Sirius merger simply cannot be considered in a vacuum, independent of the deplorable state of competition in radio, the needs of radio listeners and communities for sources of diverse local news and information, and the significant barriers facing independent artists and commentators and would-be minority station owners," Kimmelman said.
"It is time to take advantage of digital technological breakthroughs and devise incentives to expand local and minority ownership opportunities in radio and other media and to hold the line against the greatest threat to a competitive and diverse media: mergers that concentrate ownership in too few hands."
"Offers of conditions on the mergers should be taken with a grain of salt," said Mark Cooper, Director of Research for the Consumer Federation of America. "The recent track record of conditions has been abysmal and the satellite radio industry has already proven that it cannot be trusted to live up to conditions imposed on it."
The satellite radio licenses were issued in 1997 subject to the condition that the licensees never merge. The licensees promised to offer the public interoperable radios that would work with both systems. Ten years have passed and there is no such interoperability. "In short, from day one the satellite radio companies have failed to meet the conditions of their licenses and the public has suffered as a result," added Cooper.
The groups called on Congress, the Federal Communications Commission and antitrust authorities to put the brakes on the merger unless and until significant questions on competition, and consumer impacts are fully addressed and satisfactorily answered.
