• by Erik Sass  @eriksass1, August 8, 2007

The battle over the proposed merger between satellite radio broadcasters Sirius and XM saw more volleys delivered on Tuesday. In a positive piece of news for the satellite companies, Federal Communications Commission chairman Kevin Martin said he approved of their recent proposal, presented by Sirius CEO Mel Karmazin, to allow customers to pick and choose the channels they want. But that idea was immediately blasted by the National Association of Broadcasters, a lobbying group for terrestrial radio, which fiercely opposes the merger.

Martin, who has also voiced support for a la carte cable TV offerings, said he was "pleased any time companies come forward with proposals that would give consumers more control over what they pay for." Although the merger must be approved by a majority vote of the five-member commission, the favorable words from Martin, who leads the commission as chairperson, are an encouraging sign.

The merger's opponents were quick to counterattack, however, with the NAB issuing a scathing dismissal of the a la carte proposal as a "sham" that would actually lead to higher prices for less content.

According to the NAB's analysis, "under every programming packaging offered through an a la carte scheme, consumers will be charged higher prices-per-channel than they currently pay." It added: "The price-per-channel increases under a merged XM-Sirius would range from 40 percent to 188 percent."

The NAB also pointed to "onerous restrictions and limitations preventing consumers from enjoying true a la carte choice." Here, the advocacy group seems to be referring to the requirement to sign up for a set number of channels, rather than as few or as many as one likes.

Under the terms of the plan, subscribers to both services would be able to choose from two basic a la carte options. The first allows subscribers to one service to choose 50 satellite channels from that service for $6.99 a month, about half the current rate of $12.95; consumers can also add additional channels beyond the basic 50 for $.25 apiece. Under the second plan, for $14.99, subscribers can choose up to 100 channels--including premium programming from the other service.

A new option, billed as "family friendly," would also allow subscribers to block adult programming and receive a credit for the canceled channel. Finally, the companies are also offering two new "mostly music" and "mostly talk/news" subscription plans, also at discounted rates.