Karmazin vows to keep sat radio prices down

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Mel Karmazin is promising consumers a lot with his proposal to combine the nation's only satellite radio services, but he told lawmakers Wednesday not to take his word for it.

In testimony before the House Antitrust Task Force, the Sirius Satellite Radio chief said he was willing to abide by conditions in his proposed merger with XM Radio that would keep prices low and consumer choices high.

" 'Trust me' isn't going to work here," Karmazin said. "Not just today but in the longer term."

The executive told lawmakers, "We're saying we are not going to raise our prices, and we are going to offer to consumers something they have not had before."

Karmazin told the panel he would be willing to agree to regulation on prices, device interoperability and other fronts for some period of time that he defined in an exchange with Rep. Ric Keller, R-Fla., as from two weeks to four years.

Karmazin is attempting to fend off broadcasters and consumer advocates who are trying to convince authorities that the deal is anti-competitive and violates the spirit of the FCC order that set up a pair of competing national satellite radio services.

David Rehr, president and CEO of the National Association of Broadcasters, accused Karmazin of telling lawmakers what they want to hear.

"People who want a government-sanctioned monopoly will do or say anything to get their deal approved," Rehr said.

Lawmakers failed to carve out a clear-cut position on the $4.84 billion deal, with some opposing it, usually on the grounds that it would create a monopoly.

"We're not saying we're going to be a monopoly because we're not," Karmazin told Rep. F. James Sensenbrenner, R-Wis., during a testy exchange when the lawmaker accused the company of trying to corner the satellite radio market.

"But you are a monopoly," Sensenbrenner shot back.

Some lawmakers were more supportive.

Rep. Rick Boucher, D-Va., cited a string of data he said shows that people who listen to satellite radio also spend a great deal of time listening to both terrestrial radio and Internet-delivered services.

"I think these are very interesting statistics that clearly shows this is a unified market," he said.

The fractured political landscape could make it easier for Karmazin and the deal's supporters. While Congress probably couldn't stop the deal, it can apply pressure on the Justice Department and the FCC to block it. If the antitrust regulators and the FCC were faced with a united front from lawmakers opposing the deal, it could make it more difficult for them to allow it.

Karmazin's performance before the House task force is unlikely to be his last because the House Commerce Committee, which has jurisdiction over telecommunications industry, plans to examine the deal next week. The Senate Commerce and Judiciary committees also are likely to want to hear more about the deal.
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