FCC Frees SiriusXM Of Subscription Caps

When Are Price Increases Coming?

From Demian Russian, satelliteradioplayground.com:

With the Federal Communications Commission Memorandum Opinion and Order filed last week, Sirius XM Radio has now been given the all clear by the FCC to raise its subscription prices and is no longer bound by the three-year pricing condition contained in the Commission’s 2008 decision approving the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. into a single Satellite Radio service provider.

Along with its decision, the FCC noted how the audio entertainment marketplace had changed in the three years following the Sirius and XM merger, noting that “new audio services have emerged as viable consumer alternatives, including smartphone Internet streaming applications that can be used in mobile environments such as automobiles equipped with user-friendly interfaces.”

It noted that Internet radio service provider Pandora Media Inc. has demonstrated “remarkable growth” in the three years following the merger. Rhapsody, Slacker, Last.fm and iHeartradio were also mentioned as audio entertainment alternatives.

In addition, the Commission reported that automakers Ford, Toyota, MINI, GM, Mercedes-Benz, and Hyundai were in the process of introducing Internet-based streaming services in their vehicles. Furthermore, the Commission also noted that “data suggests HD radio has increased since the merger.”

While Sirius XM is now free from the voluntary commitment it made to implement price caps on certain subscription packages for a period of three years after the consummation of the merger, Sirius XM also made another voluntary commitment on May 12th, 2011 as part of a proposed settlement in the Carl Blessing et al. v. Sirius XM Radio Inc. class action lawsuit to not raise its prices through the end of the year.

As part of the proposed agreement, Sirius XM commited to not raise the price of their basic Satellite Radio service, other programming packages or  internet streaming services. In addition, Sirius XM agreed to not increase the U.S. Music Royalty Fee or decrease their multi-radio discount. Furthermore, Sirius XM said that its existing subscribers will be allowed to renew their current subscription plans at current rates prior to December 31st, 2011.

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