Is Sirius XM About To Raise Rates On Its Customers?

UPDATE: Confirmed: Sirius Radio Raising Rates March 11

Ryan pointed us to an article on Orbitcast about a rumored fee hike by Sirius XM. The increases appear to be for services that aren’t strictly protected by the FCC agreement, which is why they would legally be able to do this despite promises that they wouldn’t raise rates for 36 months after the merger.

Remember, this is all rumor at this point, but here’s what Orbitcast says is the most likely scenario:

  • multiple receive radio fee will increase from $6.99 to $8.99/month
  • online listening will increase from free to $8.99/month for Mostly Music and Family Pack subscribers, and $2.99/month for most everyone else

Less likely, because these are blatant FCC violations, are the following rumors:

  • Mostly Music/News subscription jumping to $12.95/month
  • A La Carte package increasing an unspecified amount

Current subscribers will be given a chance to lock-in their rates, according to these people. You can choose to lock in the Online Listening or $6.99 multiple radio price. Notifications to subscribers are said to start going out on January 26th, and subscribers are rumored to have a chance to lock in their rates by March 11th.

Just for fun, here’s what Sirius CEO Mel Karmazin said two years ago during hearings for the proposed merger (as pointed out by a commenter on the Orbitcast thread).

“We are absolutely not a monopoly,” Karmazin said heatedly at one point. “We are absolutely convinced this merger will be in the best interest of consumers,” he maintained. “This merger will give consumers more choice at a lower price and more importantly, less confusion.”

Some of the most pointed exchanges occurred not with the members but at the long witness table between Karmazin and Mark Cooper, research director of the Consumer Federation of America, an advocacy group. Cooper held that, “The argument that consumers will be better off with a benevolent monopolist than competition is absurd. Cost savings will not be passed to consumers. It is competition that is the driver of innovation in this economy, and competition is the best form of protection for consumers.”

Karmazin said his people had told him not to get excited and to keep his hands folded at the table. But Cooper, he felt, had gone too far. The monopoly charge, he said, “is the most bizarre thing I’ve ever heard… We are not looking to bankrupt our companies. We are not doing anything that stupid. And we’ll give back some of that saving” to customers.

“Rumor: Price increases to come for Sirius XM” [Orbitcast]
“Satellite Radio Merger Partners Pledge Not to Raise Prices” [Politico]
(Photo: janeyhenning)

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