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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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RE: Stock
By theways on 1/24/2007 1:02:40 AM , Rating: 2
Hah, thats rich.

I drive cars for a living, and about half the vehicles I drive have satellite radio, (mostly XM, bout a 2 to 1 ratio). However, just about anyone who uses their vehicle for hauling (hotshotting) or business travel always have satellite radio.

you're not gonna get Wifi internet radio on a 5 hr drive from Dallas to Houston, let alone more rural areas. And even thou hundreds of thousands of people may live in a big metropolitan area, doesn't mean they also work there, and that half-hour, hour drive to/from work each day would be pretty boring listening to static because you can't pickup your internet radio station after the first 10 minutes.

And if you think that only a small portion of the population fits into these categories, you are sorely mistaken. Wifi internet radio would be cool, but until they can spread it literally to ever square inch of the map, it will never be able to beat satellite radio.

Personally I listen to XM about 5-6hrs a day when playing EQ2, and I have yet to hear a "promotion" from one of their music channels (broadcast through directv). Squizz/Liquid Metal FTW.

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