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XM-Sirius Merger: What it might mean for you

Consumer Reports News: April 04, 2008 06:45 PM

Last week, the Department of Justice granted rivals Sirius Satellite Radio and XM Satellite Radio permission to merge. If the Federal Communications Commission also grants permission in the coming months, as many expect, there could be a single, integrated satellite-radio company by 2009.

Consumers Union, our parent organization, and other industry stakeholders are continuing, however, to fight the merger. Such critics reject the companies' assertions that the merger would be in the consumer interest and say it violates anti-monopoly safeguards the FCC put in place about a decade ago as conditions for the satellite-radio operating licenses.

To help bolster support for the merger, both XM and Sirius have posted the fees and channel lineups they say would be in place after the merger is approved.

The new plans aim to deliver on the consumer benefits the companies promise will result from a merger. But our look at the proposals suggests the pluses generally come with tradeoffs or depend on some as-yet-unanswered questions.

Here's our take on what the new plans might mean for you, if in fact they're implemented:

  • Same service, same price. If you like your service as is, the plans suggest you'll be paying the same as you do now, at least when the transition begins (both services charge $12.95 a month for one radio, a bit less if you prepay for a year or more).
    But: It isn't yet clear that all channels on both services will survive, at least in the long run. That is, they will likely cull channels with similar programming from one or the other company, and offer both XM and Sirius customers, say, the same 1970s music channel. Since channels are merely similar, not identical in their programming, that might rankle some rabid fans.

  • There will be new, lower-cost options. For the first time, both Sirius and XM customers will be able to save a little cash by dropping programming they rarely tune; both carriers include a range of less-than-comprehensive plans in their proposed rosters.
    But: Unless you invest in a new receiver, savings will be a modest $3 a month, which you'll save by opting for the likes of mostly-music plans that omit most or all sports or talk or mostly-sports plans that omit most or all music channels. If you're willing to buy new equipment, the cost of which is as yet unclear, the proposals suggest you'll be able to cut your bill to as little $6.99 a month by picking 50 non-premium channels a la carte.

  • You'll be able to listen to listen to channels from both services. Two packages promise to add as many as 11 channels from the other service, for an additional $2 to $4 per month.
    But: It's not clear whether you'll be able to pick the 11 channels yourself or if they'll be pre-selected as a package. And both services are likely to keep some of their marquee exclusive programming to themselves. It at least appears that you won’t need new equipment to get the other services' channels.

But these proposals are just that for now. As the FCC considers the merger, there'll may likely be some horse-trading as if the Commission, under the advisement of Consumers Union and other merger challengers, heeds demands for further concessions from the happy couple as it decides whether their marriage should be blessed.

—Mike Gikas

   

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