Appearing before the Senate Antitrust Subcommittee on Tuesday, Sirius CEO Mel Karmazin again spelled out the public interest benefits of his company’s proposed merger with rival XM Satellite Radio, as key Republican members of the committee focused on the airing of adult content on the companies’ combined platform. Karmazin offered his testimony as XM and Sirius filed an application seeking FCC approval of the $13 billion transaction on Tuesday. Although subcommittee chairman Herb Kohl (D-WI) told Karmazin “we have real worries that what may be a fabulous monopoly for you will be a real bad deal for consumers,” Karmazin stressed that XM’s and Sirius’s combined subscriber base of 14 million “[translates] into about 3.4% of national radio listeners,” as he challenged lawmakers to “compare that to 237 million vehicles equipped with AM/FM radios, approximately 220 million weekly AM and FM listeners, or even the 230 million PCs that can access Internet-delivered programming.” Repeating that subscription costs charged by the merged entity will be lower than the $26 it would now cost to purchase each company’s service separately, Karmazin pledged: “those who want to take advantage of new services, like the best of both program line-ups, will be able to do so for less than this would cost today—all with their current radios.” With respect to the services and content that the merged entity would offer, Senators Sam Brownback (R-KS) and Orrin Hatch (RUT) voiced concern with the availability of adult only or indecent content on the combined companies’ platform. Answering Brownback, who asked if the merged entity would agree to submit to broadcast-style indecency regulation, Karmazin said he would not consider doing so unless the government were to provide a clear definition of what constitutes indecent content. Karmazin also told lawmakers that customers who choose to block channels with adult content would receive a price break, as spelled out in a recent filing with the FCC.
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