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Monday, January 24, 2011

Sirius XM wants the freedom to raise its rates this Summer

Sirius XM Mel Karmazin's agreement with the FCC in mid-2008 was that basic rates wouldn't rise for three years after the merger of the only two satellite radio licensees, and now Bloomberg reports the New York-based satcaster wants "the ability to raise the subscription rate" after July 28. Last Thursday, it asked the Commission to let the freeze expire (to take "no steps" to extend or modify it). Sirius XM was allowed to pass along music royalty increases on the two-year anniversary of the deal last year, and it did so. But the so-called basic rate remains at $12.95 a month. Sirius XM's argument is that market forces are sufficient to protect the consumer. It says its service exists in a "robustly competitive" market for audio entertainment, including Pandora's recent deals with carmakers such as Ford and Toyota. The FCC tells Bloomberg that it's reviewing the situation. See the discussion about potentially higher subscription rates on the Seattle Board of Radio-Info.com, here.

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