Karmazin on mound in sat merger pitch


WASHINGTON -- Mel Karmazin will take his attempt to merge the nation's two satellite radio services before lawmakers Wednesday for the second time in a week, telling members of the House Energy and Commerce Committee that opponents of the merger are telling lawmakers one thing and regulators another.

Using some of the big broadcast companies' own filings with the U.S. Securities and Exchange Commission, the Sirius Satellite Radio CEO attempts to bolster his contention with the committee's telecommunications subcommittee that satellite radio competes with everything from traditional radio broadcasts to the iPod.

"Given the expansive market -- within which satellite radio is only one of many alternatives -- we are certain that an accelerating level of competition will exist post-merger," Karmazin said, according to a copy of his proposed testimony. "There is little doubt that satellite radio faces stiff competition from many of the technologies and entertainment platforms I have already described. In fact, I would like to note for the committee that in the SEC filings of traditional radio companies, they readily acknowledge that they compete with satellite radio in a a larger market for audio entertainment."

Karmazin mentions SEC filings from Clear Channel Communications and Cox Broadcasting that face competition from the same universe that he enumerates.

Broadcasters are fighting the merger, contending that Sirius and XM compete in a market defined as satellite radio, and that the companies exhibit a pattern of abuse often flaunting regulatory strictures.

"Government cannot and should not rely on any promises that a united XM and Sirius, as a government-sanctioned monopoly, will cause harm to consumers," said Greater Media president and CEO Peter H. Smyth, according to a copy of his prepared remarks. "Their past behavior in a number of instances shows otherwise."

While Congress can do little, if anything, to stop the deal the hearings are important because they give the parties on both sides an attempt to shape public opinion. The hearings also give policymakers and the FCC and the Justice Department guidance as to how they should act in deciding whether the merger is in the public interest and whether or not it is anti-competitve, respectively.