UPDATE 1-Sirius CEO says would cap prices to seal XM deal

Wed Feb 28, 2007 4:35pm EST

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WASHINGTON, Feb 28 (Reuters) - The head of Sirius Satellite Radio Inc. (SIRI.O) told lawmakers on Wednesday he was ready to make concessions, such as capping prices, to win federal approval of its proposed purchase of XM Satellite Radio Holdings Inc. XMSR.O

Sirius' plan to buy XM Satellite must win approval from both the U.S. Federal Communications Commission and the Justice Department's antitrust division.

"We're prepared to make concessions, and we're willing to work with the FCC on doing it," Sirius Chief Executive Mel Karmazin testified at a hearing held by the House Judiciary Committee's new antitrust task force.

Karmazin did not say what concessions he might offer. However, when he was asked by Rep. Ric Keller if he would agree to price restrictions for a period of time, Karmazin responded "yes." Keller, a Florida Republican, is a task force member.

"We believe that we need to show you and others that this is in the public interest," Karmazin told lawmakers.

The XM Satellite/Sirius deal would bring entertainers such as TV personality Oprah Winfrey and shock-jock Howard Stern under one roof.

To get approval, the companies will have to convince the FCC to waive a key regulation and persuade the Justice Department that any price increases would be constrained by competition from free, over-the-air radio and new technologies.

Consumer advocates are concerned the deal could lead to higher prices, less diversity in programming, and could leave customers stuck with incompatible equipment.

((Reporting by Peter Kaplan, editing by J.S. Benkoe; julie.vorman@reuters.com, +1 202 898 8467))

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