[Archive 2007-03-02] Sirius CEO visits congress

Historical archive — originally published 2007-03-02. This report records what was known on that date. It is not current news; subsequent events may have changed the situation. Wikinews closed in May 2026.

Sirius CEO Mel Karmazin appeared before a newly formed Antitrust Task Force, a sub-committee of the House Judiciary Committee, on Wednesday last week in Washington, D.C. to defend the proposed U.S. merger between XM and Sirius satellite radio services.

The hearing, carried live on C-SPAN, was attended by representatives from various competing broadcast companies. The representatives challenged the merger deal, and some speakers were openly hostile to Karmazin and to satellite radio in general, while other speakers were more civil.

Several times during the debate, the discussion centered on the failed merger deal between the two satellite television networks DirecTV and Echostar. The comparison between this proposed radio merger and the failed television merger was settled to some extent with an understanding that nearly all television viewers now use either cable or satellite to view available programming. Televised programming content is now delivered mainly in the form of a subscription, rather than airwave transmissions.

Unlike television programming, most radio listeners use over the air receivers to listen to free programming content supported advertisers.

At the heart of the debate is whether the two competing satellite services could drive each other to improve both of their services, or whether the proposed merger could result in end-user cost reductions by making more money available for Research & Development, new content, and subscription price reductions.

David Rehr, president of the National Association of Broadcasters, spoke first. In a speech riddled with loaded terms like "government sanctioned monopoly" and "government bailout", he laid out points:

This government sanctioned monopoly would violate FCC rules and precedent (DirectTV and Echostar), Congressional rules, and anti-trust principles.

Both companies have a pattern of violating the terms of the FCC licenses and can't be trusted.

Rerh accused Sirius and XM of breaking promises and asserted that neither company can be trusted. To trust the new, combined company would be stupid, he alleged.

Gigi Sohn of Public Knowledge presented a more balanced view. On one hand, consolidation will raise questions about price and choice. On the other hand, XM and Sirius have engaged in a spending war, harming both companies financially. She also proposed conditions to protect consumer choice, such as public radio and educational programming requirements. Touching on the Recording Industry Association of America lawsuit, she also stated that consumers should be allowed to record programming.

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