• Associated Press via Yahoo, Wednesday, April 18, 2007 10 AM

A Senate committee chairman says Sirius has "a steep hill to climb" to prove its proposed takeover of XM Satellite Radio won't hurt competition in the market. "Given the public interest in promoting competition and maximizing a diversity of media outlets, we should be skeptical of claims that new technologies necessarily 'change the equation' and provide competition sufficient to restrain monopoly power," says Daniel Inouye, a Hawaii Democrat who runs the Commerce, Science and Transportation Committee.

He expressed his doubts in response to an argument posited by Sirius chief Mel Kramazin that the merger could benefit consumers by letting them get both services for a lower price. Both have subscription fees of $12.95, but Karmazin claims a new entity would provide programming on one radio for less than the $25.90 it would currently cost for the pair, adding the combined company might offer regulators guarantees not to boost prices to get the merger approved.

The FCC licensed the pair in part on the proviso they would never merge. But Karmazin claims technology has evolved to the point where there is already a lot of competition. "The audio entertainment market is robust, competitive and teaming with innovation and will remain so after our merger."

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