Karmazin testifying at House subcommittee today at 2:30pm ET
Mel Karmazin is back in Washington again today to testify about the proposed Sirius-XM merger. The House Subcommittee on Telecommunications and the Internet will be hearing testimony from Karmazin and others today at 2:30pm. The “The Digital Future of the United States: Part II– The Future of Radio” hearing also includes testimony from Peter Smyth of Greater Media and Robert Kimball of RealNetworks.
You can watch a live video webcast of this hearing (Windows Media Player is required).
Watch this post for highlights from the hearing as it happens.
The topics that this committee will address may seem broad or boring, but the outcome of this and other House committee hearings will play a key role in the future of the merger between Sirius and XM. Maybe by the time this is all over, the committee members will be able to correctly pronounce Sirius and Karmazin.
Highlights
3:30pm: Opening statements by committee members are still being made. It seems there will be quite a few topics addressed by this committee. Some of the topics addressed include: increasing the cap on the number of stations owned by a licensee in large markets, broadcaster licensees should better reflect the population by including more women and minorities, the sampling of music to create mash-ups should not be held to the same copyright standards as a song-writer that duplicates another artist’s bass line, local radio provides to the markets they serve local content which satellite does not, technology is out pacing pacing laws that are currently in place and has changed they way consumers gain access to information, will the merger of Sirius and XM result in increased costs, less innovation, and other drawbacks found if there is only one player in the satellite radio market?
3:35pm: We finally finish with the opening statements by the committee members and move to the guest witnesses.
3:45pm: Peter Smyth of Greater Media, Inc and representing the NAB spoke in opposition to the merger claiming that terrestrial radio does not compete in the national market of satellite radio and there would be a monopoly in that market after the merger. Smyth cited FCC violations of the repeaters for XM and SIRIUS and the lack of a device that is able to receive a signal from both services.
3:55pm: Robert Kimball representing RealNetworks and other internet broadcasters spoke in favor of a delay to the merger between Sirius and XM all of the players in the digital audio market can be placed on a level playing field.
4:00pm: Mel Karmazin was allowed to make an opening statment. He made a number of statements about the merger that we’ve heard before and said that he hoped to be asked a lot of questions.
4:05pm: Gene Kimmelman spoke on behalf of the Consumers Union. He stated there are distinct differences between mobile digital audio devices and terrestrial radio.
House Panel Told To Reject Sirius’ Competition Argument
By Corey Boles
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–The satellite radio market is easily distinguishable from other forms of audio media and its participants are therefore distinct, a leading consumer advocate told a panel of House lawmakers Wednesday.
Testifying before the House Commerce Committee’s telecommunications subcommittee into the future radio, Gene Kimmelman, a vice president with the Consumers Union, said that the argument put forth by the two satellite radio companies didn’t hold water.
“The product and geographic market characteristics of satellite radio are easily identifiable and quite distinct from other mobile and stationary audio products,” said Kimmelman in his opening remarks.
As part of their proposed merger, Sirius Satellite Radio Inc. (SIRI) and XM Satellite Radio Holdings Inc. (XMSR), the companies have said they are not competing just against each other but against traditional, HD and Internet-based radio stations as well as technologies such as Apple Inc.’s (AAPL) Ipod.
Executives at the company need to convince regulators at the Department of Justice’s antitrust unit and the Federal Communications Commission that theirs is more than a market of two players.
Also testifying at the hearing, Robert Kimball, senior vice president at Internet media software developer RealNetworks Inc. (RNWK), said the committee should reject the argument that satellite radio competes with online radio broadcasters.
He said that laws such as the Copyright Act hamper the ability of Internet radio to compete effectively.
“I suggest to you that any XM-Sirius merger that relies upon Internet radio as the justifying competition should be rejected until Congress corrects the Copyright Act’s bias against the internet,” said Kimball.
In his opening statement to the hearing, Sirius Chief Executive Mel Karmazin repeated his mantra that the two companies compete against the range of audio media.
He also said the company would be willing to enter into binding guarantees over price levels post-merger.
“We are prepared at the appropriate time to discuss each of these issues with regulators and to guarantee these benefits as a condition of our merger approval,” said Karmazin. “From our standpoint, these guarantees are not only good for consumers, they are also essential to the long term success of the combined company.”
Rep. Edward Markey, D-Mass., the chairman of the subcommittee, said the merger affected a wide range of issues such as consumer prices and equipment, radio content and the ability of content providers to compete.
Republican Texas lawmaker and ranking member of the overall House Commerce Committee, Joe Barton, acknowledged in his opening comments that it was difficult to define the market in which Sirius and XM operate.
Sirius, XM To Use Separate Networks Until 2016-CEO
By Corey Boles
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–Sirius Satellite Radio (SIRI) Chief Executive Mel Karmazin said Wednesday that his company and XM Satellite Radio Holdings (XMSR) would continue to operate on separate networks for at least 10 years after a successful merger.
Testifying before a House telecommunications subcommittee hearing into the proposed merger between the two companies, Karmazin said that the earliest the two companies could merge their networks would be in 10 to 12 years’ time.
He said that Sirius was planning to soon launch three new satellites into orbit, which would be operable until between 2016 to 2018.
Karmazin was responding to questioning from Edward Markey, D-Mass., the subcommittee chairman, about whether or not the merger between the two companies couldn’t result in spectrum being freed up for other purposes.
He said that while the two companies would make programming from each others’ networks available to subscribers, they had pledged to ensure that no existing customers’ radios were rendered obsolete by the merger.
Sirius had previously announced the launch of the three satellites. So far it has said the first will be in the air in the second half of 2008.
Earlier in the hearing, Republican lawmaker Lee Turner, of Nebraska, said that he was skeptical of the benefits to consumers of the merger going forward.
Rep. Rick Boucher, D-Va., repeated his statement of last week that he supported the merger as long as there were sufficient attachments to ensure consumer protection.
Separately, the Senate Judiciary Committee’s antitrust subcommittee announced earlier Wednesday that it would hold its own hearing into the proposed merger, the third congressional panel to do so since the deal was announced three weeks’ ago.
Merged Satellite Radio Co Would Pay Artists For Music
By Corey Boles
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–A merged satellite radio company would continue to pay artists for the right to broadcast their music, Sirius Satellite Radio (SIRI) Chief Executive Mel Karmazin said Wednesday.
Karmazin told lawmakers on the House Telecommunications subcommittee that he was in favor of remunerating artists to allow satellite radio subscribers to record music from their radio.
“We’re implementing my viewpoint at Sirius. We have made an accommodation with the various music labels,” said Karmazin. “After the merger, I will be the CEO, and all I can say is you know my views on the subject.”
Sirius has reached an agreement with the music industry to pay them while rival XM Satellite Radio Holdings (XMSR), which plans to merge with Sirius, has resisted doing so and is currently locked in a court battle with the music industry.
Karmazin said he couldn’t comment on XM’s legal case, nor did he know whether the matter would be resolved by the time the merger, if approved, would be completed.