By Andrew Noyes
(Tuesday, August 7) The powerful trade group that represents thousands of over-the-air radio and television stations slammed a proposal by satellite radio providers Sirius and XM to offer so-called a la carte programming if regulators approve the rivals' merger plans.
The National Association of Broadcasters, which has led the opposition to the estimated $13 billion pairing between XM and Sirius, planned to present its detailed analysis to FCC staff and forward the document to Justice Department antitrust officials.
Sirius Chief Executive Officer Mel Karmazin announced last month that the a la carte offering would give customers the power to select satellite radio packages, "channel by channel to suit their tastes and their budgets." Pricing would start at $6.99 a month, with the priciest plan at $16.99. The services' existing base subscription rate is $12.95.
But NAB's review shows that under every package within an a la carte scheme, subscribers would be charged more per-channel than they currently pay. The price-per-channel increases under a merged XM-Sirius would range from 40 percent to 188 percent, according to the analysis.
Additionally, the packages described by Karmazin during his July 23 keynote at the National Press Club would include "onerous restrictions and limitations preventing consumers from enjoying true a la carte choice," NAB said in a press release.
The so-called "best of both worlds" offer, a 100-channel a la carte plan for either Sirius or XM programming, would provide only a pre-selected sampling of the other service. That option would require subscribers to buy a new radio at an undetermined price, NAB said.
"If 'a la carte' is intended to mean more choice and lower prices, XM and Sirius fail the test," NAB spokesman Dennis Wharton said. "Only in a monopolist's world are 50-channel minimums, higher prices, interoperability restrictions and a required hardware upgrade considered a consumer benefit."
Representatives for Sirius and XM sent an e-mail to reporters criticizing broadcasters' merger-blocking attempts. They said NAB officials have contradicted their previous statements, "proving once again that the NAB will say anything and do anything to stifle competition with terrestrial radio."
"This is desperation on NAB's part," said Gigi Sohn -- president of the advocacy group Public Knowledge. "The point is that consumers would have the chance to pay less for channels they want."
Meanwhile, FCC Chairman Kevin Martin told reporters Tuesday that he is "always pleased" when companies give consumers "more control over the content that they're paying for."
Martin said the agency might complete its merger review in the third or fourth quarter, though the timeframe could change. "I have said that [the] merger has a high hurdle, and I think that makes it more difficult" for the FCC to complete its review in the 180-day timeframe that it always aims for, he said.
Technology Daily Senior Writer David Hatch contributed to this report.