Sat radio hearing tunes in content

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WASHINGTON -- The debate over the threat of anti-competitive damage that an XM-Sirius merger could cause quickly devolved into an argument over racy content Tuesday as a Senate panel began its examination of the $4.7 billion deal.

Sen. Sam Brownback, R-Kansas, and Sen. Orrin Hatch, R-Utah, both grilled Sirius CEO Mel Karmazin over content that is aired on the satellite radio services.

Brownback, who is also seeking the Republican presidential nomination, was the driving force in the Senate behind legislation that raised fines broadcasters face for indecent content to $325,000 per incident.

"I'm sure you don't categorize it as such, but some would call it pornographic," Brownback said.

Reading off a litany of racy programming that features pornographic film stars and is sponsored by businesses like Playboy, Brownback asked Karmazin if he would submit to the same regulations that broadcasters face.

"It's an easy yes for me, but I don't know what the standard would be so the answer is no," Karmazin said. "I can't give you that commitment."

Karmazin told the members of the Senate Judiciary Committee's antitrust panel that in its recent license renewal request to the FCC, that the company promised to block programming that parents found offensive. In addition to blocking the programming, subscribers could request a rebate for the channels they blocked.

"We do believe that we are entitled to airing content adults want to hear," Karmazin said. "They can restrict it and not pay for that service."

While Hatch questioned Karmazin about the content aired on satellite radio, he admitted that there was little the government could do.

"I think we have too much on our radio airwaves and TV sets," Hatch said. "But unless we have the guts to define it, you can't really say what we can put on in a free-speech situation. Anyway, I don't think it has much to do with this merger."

Hatch's main concern seemed to be that Christian content was not given the short shrift in the combined entity.

Karmazin told the lawmaker he doubted that would happen because of the popularity of the programming.

While content fights marked most of the hearing, Sen. Herb Kohl, D-Wisc., focused on the possibility of competitive harm saying that the combination could create a monopoly that could be "virtually unrivaled and unchallenged in this area."

It's a notion Karmazin sought to dispel as he told the panel, just as he told a pair of House committees, that a merger wouldn't give them monopoly power as the service competes against everything from the iPod to traditional radio broadcasters.

"We believe that the combination of Sirius and XM will be good for consumers as it will intensify this competition, expand the choices for consumers and reduce prices," he testified.
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