Sirius and XM Plan A La Carte Services

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Where the satellite radio industry used to be a-buzz with releases, new products, news of exclusive content deals, and announcements that one company or another had a new partnership with one vehicle maker or another, since the two competing satellite operators Sirius and XM announced plans for a $13 billion merger back in February, the industry has mostly been holding its breath. Would the FCC approve the merger of the only two companies operating satellite radio franchises in the United States? On the face of it, it would seem that going from two satellite radio providers to one would be bad for consumer choice, but the companies themselves argue their competition isn’t in the satellite radio arena: it’s mobile phone operators, portable media, and the Internet.

Now the PR bandwagon seems to be rolling again, with Sirius and XM announcing that a merged company will for the first time offer a la carte programming options, letting customers pick and choose what programming they wan at rates lower than traditional subscription plans. The combined company plans to offer two plans: a $6.99 service would enable customers to choose 50 channels, with additional channels available for $0.25 each. A second a la carte plan would offer 100 channels, while also enabling Sirius and XM customers to select “some” programming from the formerly-rival service. (So, Sirius subscribers could opt for some XM channels, and vice versa.) XM and Sirius say the a la carte options would be available within one year of an approved merger—and there’s the rub: the companies’ merger has not been approved by the FCC. With no approval, presumably, no a la carte programming options will become available.

“We think this is going to be great for consumers and great for our business,” said Gary Parsons, Chairman of XM Satellite Radio, in a statement. “From the day this transaction was announced, we promised that the merger would enable us to deliver more choices and lower prices for consumers. In our filing tomorrow with the FCC, we will offer detailed plans regarding how we will achieve those goals. These plans will further demonstrate why this merger is overwhelmingly good for consumers and in the public interest.”

The companies are sticking to their previously stated goals of having the merger completed by late 2007.

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