US senator skeptical on Sirius-XM competition claims

The chairman of a US Senate antitrust panel expressed skepticism regarding claims by two satellite radio companies that their merger would not eliminate competition or lead to higher prices, an Associated Press report said.

The Associated Press report said during a hearing on the proposed combination of Sirius Satellite and XM Satellite, Democratic Senator Herb Kohl questioned assertions by Sirius's chief executive that the combined company would still face significant competition with land-based radio, iPods and Internet radio.

'We must view these claims with a healthy degree of skepticism,' Kohl was quoted by the report as saying. 'Over-the-air radio does not come close to duplicating the impressive array of program offerings of satellite radio.'

Mel Karmazin, chief executive of Sirius, nevertheless stuck to his argument that a combined Sirius-XM would face heavy competition from other sources, the report said.

Karmazin testified before the Senate Judiciary subcommittee on antitrust, competition policy and consumer rights, which Kohl chairs, the report said.

The proposed merger still faces what observers say could be challenging antitrust reviews by the Federal Communications Commission and the Justice Department. When the FCC created the satellite radio industry in 1997, it did so on the condition that the two licensees would not merge, the report said.

The report further said Kohl's subcommittee is the third congressional panel in recent weeks to consider the competitive impact of the planned merger, although so far there are no congressional plans to prevent the merger. Sirius offered to pay $4.7 billion in stock for XM when the transaction was announced February 19.