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XM-Sirius Merger: Will It Be A Hit On Anyone's Dial?

Wednesday, 7 Mar 2007 | 3:01 PM ET

This afternoon-- Sirius Satellite Radio CEO Mel Karmazin will be on Capitol Hill pushing for a merger with rival XM. Should the government approve the proposed merger between Sirius and XM or would it kill any competition? Skeptics say it is unlikely to benefit consumers or investors but the biggest obstacle will be antitrust regulations.

Bill Wycoff, Partner and Chairman of the Commercial & Corporate Litigation group at Thorp Reed & Armstrong and Steve Axinn, senior partner and antitrust lawyer at Axinn, Veltrop & Harkrider joined Sue Herera on "Power Lunch" this afternoon to debate the proposed merger.

“I think you can have one company competing against the others and still have competition”, said Wycoff. Karmazin shook hands on the deal with XM Chair Gary Parsons, but the proposed merger has not yet been submitted for government approval. “The merger would create more access and better programming. The consumer would benefit”, said Wycoff.

Neither XM or Sirius has ever made a profit. “Why would anyone pay $12.95 each month if it would be competing against a free product?” said Axinn. He also believes that prices would rise, “today both channels charge the same rate of $12.95 each month because they currently check each other competitively”. XM currently has 170 channels and 7.6 million subscribers, while Sirius has 130 channels and 6 million subscribers.

XM/Sirius Update
Honchos from XM and Sirius are on Capitol Hill, lobbying for regulators to approve their merger, with Stephen Axinn, Axinn Veltrop & Harkrider senior partner and antitrust attorney; Bill Wycoff, Thorp, Reed & Armstrong and CNBC's Sue Herera
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  • Sue Herera is a founding member of CNBC, helping to launch the network in 1989. She is co-anchor of "Power Lunch."

  • Tyler Mathisen co-anchors CNBC's "Power Lunch." Mathisen also co-anchors "Nightly Business Report produced by CNBC."

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Kenny Polcari