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A monopoly in satellite radio is a big no says FCC

According to several reports, FCC chairman Kevin Martin said that it is very unlikely the FCC will allow Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. to merge. Both companies represent the two leading satellite radio entities currently in business in the U.S. and unfortunately, a merger in the eyes of the FCC is an obvious road to anti-competitive grounds.

Both Sirius and XM have been battling it out for the last several years, and in 2006 both companies saw their revenues drop as well as subscriber numbers drop. This peaked a notion in the industry that it was very possible that the two companies were in negotiations to go through a merger.

Share prices from both companies had dropped significantly in 2006, with Sirius shares dropping roughly 38-percent and XM shares dropping a whopping 46-percent of their value. Despite the shares dropping, the two companies continue to operate on speculation of a merger, which was also fueled by remarks made by XM CEO Mel Karmazin and chairman Gary Parsons. With their remarks, shares of both companies jumped last month but have since declined.

It is very unlikely, less than 50-percent chance, that Sirius and XM will receive FCC approval for merger, according to Martin.  Even so, both companies will have to pass anti-trust regulations and audits. "There is a prohibition on one entity owning both of these businesses," said Martin.

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By dryloch on 1/23/2007 11:36:40 PM , Rating: 2
Sirius is gaining a ton of customers and if anyone is "hurting" it is XM. Within 6 months to a year at most I can pretty much guarantee XM will be number 2 behind Sirius. Then watch what happens to the price of Sirius stock. I am getting my bonus in March and I am dumping the whole thing into Sirius stock. I hear the numbers frequently of how Sirius is doing vs XM on the Stern show. Howard is counting down the days till they take the lead over. He is so sick of people saying Sirius is a failure because they only went from 600,000 to 6 million in one year. They also went from being outsold 3 to 1 to being the one who is outselling XM by that same margin. This is even more impressive because they have barely any advertising and what they do have is not very good. I walk into a bunch of stores and the XM system is hooked up but the Sirius is not. Imagine what would happen if they really got it together.

By Dmitheon on 1/24/2007 9:19:41 AM , Rating: 2
I am getting my bonus in March and I am dumping the whole thing into Sirius stock.

Ok, this is a really bad idea. You're source for info is a completely biased, and if you are wrong, you are really hurting. Remember the stock price isn't about how the company is doing, it's about how it's doing compared to expectations and even then the corralation is loose at best. By all means, put some in sirius, but invest in some other things as well to help balance your risk.

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