Is monopoly best served whole or a la carte?


Satellite audio services XM and Sirius floated the notion of offering a la carte channel services to kick off a new week of media warfare over whether or not the proposed merger should be allowed to go through. In response, NAB said relevant government authorities "should not be hoodwinked" by the announcement.

The DARS companies said they would offer channel options, one of which would allow a subscriber to select 50 channels for 6.99 per month, 46% less than the current 12.95 monthly fare. Another package will allow up to 100 channels to be selected, including cross-offerings (XM subscribers could pick Sirius channels and vice versa). A la carte prices would max out at 16.99 per month, with eight different a la carte options being made available.

NAB of EVP Dennis Wharton responded, "Policymakers should not be hoodwinked by today's announcement, since nothing is stopping either XM or Sirius from individually offering consumers a more affordable choice in limited program packages. Moreover, after reading the fine print, one discovers that XM and Sirius customers have to buy a new radio for an undisclosed fee to reap the alleged rewards from today's announcement. The history of antitrust law demonstrates that two hotly-competitive companies will promise anything to become a monopoly. That, coupled with the brazen lack of candor displayed by both XM and Sirius in breaking FCC interference and terrestrial repeater rules, illustrates convincingly that this anti-consumer merger ought to be summarily rejected."