The New York Times is reporting that FCC Chairman Kevin Martin has - in private conversations - questioned Mel Karmazin's statements about price increases, at last week's Congressional hearings.
In question is Karmazin's promise to not raise prices beyond what subscribers currently pay. What was not clear to the FCC Chair is whether Mel meant beyond the $12.95 pricepoint, or the combined cost of $25.90/month.
When the New York Times questioned Mel Karmazin, he stated that his testimony was not misleading and that he meant to say two things: subscribers wanting to keep their existing service would not face a price increase, and listeners who wanted the best of both services would pay less than the combined rate of $25.90.
Mr. Martin was also contacted by the New York Times and said that he was not questioning the motives or candor of Mr. Karmazin but that there was “a need for greater clarity” over what was being proposed for fees and programming. Mr. Martin added that the hearing left those issues unclear. “When they talk about freezing rates and lowering rates, are they talking about it in terms of the current rate of $12.95 for each service, or are they referring to the combined rate of $25.90?”
The two people who had the private conversation with Mr. Martin (and apparently leaked this information to the NY Times) said that Martin seemed skeptical about both the deal, and how it was being sold to Washington.
Karmazin told the New York Times that he thought he had been clear that to get the best of both XM and Sirius, consumers would have to pay more than the monthly rate of $12.95, but less than the combined rate of $25.90. Consumers who just want to stay with their existing lineup would be guaranteed the same price, he said.
“If the merger is approved there will be lower prices and more choice,” Mr. Karmazin said. “If the merger is not approved, there is no discussion on price and there is no discussion about more choices.”
Mel Karmazin is scheduled to appear before a second Congressional panel today.
