There will be no price hike this year by Sirius XM after all.
The satcaster revealed a settlement with a number of subscribers over subscription rates; to settle the legal action, it pledged not to raise its basic subscription rate this year.
Sirius XM agreed to settle “because we believe it was in the best interest of our stockholders to avoid further legal expense and inconvenience and eliminate the distraction of this protracted litigation,” the company said in an SEC filing.
Subscriber Carl Blessing and a number of other paying customers sued Sirius XM in federal court for imposing a music royalty fee and ending its free Internet service. They claimed its actions after the merger were monopolistic and violated antitrust laws.
As part of its merger approval from regulators, Sirius XM had promised not to raise its basic subscription rates for three years. The company recently asked the FCC not to renew the condition when it expired July 28 and it had signaled to financial analysts it intended to raise its rates.
Now however, the company states: “We will not: raise the price of our basic satellite radio service, our other programming packages or our Internet streaming services; increase our U.S. music royalty fee; or decrease our multi-radio discount.”
Existing subscribers can renew their current subscription plans at current rates prior to Dec. 31, 2011. Former customers who dropped their subscriptions after July 29, 2009 and go to the Sirius XM website will be able to receive either one month of basic satellite radio service or one month of Internet streaming, for free.
Sirius XM will also pay up to $13 million of the legal expenses of the subscribers who brought the suit. It does not admit wrongdoing in this settlement, which must still be approved by a federal court.
— Leslie Stimson