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FCC says approval is unlikely, but the two satellite radio giants have struck an agreement

Today Sirius and XM announced that both companies have entered an agreement in which the two will merge to form the largest satellite radio service provider in the country. Under the terms of the merger, the single entity formed by Sirius and XM would amount to a total organization value of $13 billion USD. XM shareholders will also receive a fixed exchange ratio of 4.6 Sirius shares for each XM share they own. When the merger is complete, Sirius and XM shareholders will each own 50 percent of the combined company.

According to representatives from both companies, the new combined company will have 12 directors including the current CEOs from both Sirius and XM. Both companies will also continue to operate independently until the merger is complete. As of this writing, a name has not been determined for the new company as is where the new headquarters will be.

DailyTech last reported on rumors surrounding the merger of Sirius and XM. The FCC voiced its opinion early on in the talks between Sirius and XM, indicating that it did not approve of the two companies merging because it would create a satellite radio monopoly. FCC chairman Kevin Martin indicated that an approval of the merger would be unlikely. According to both Sirius and XM however:
The combined company will benefit from a highly experienced management team from both companies with extensive industry knowledge in radio, media, consumer electronics, OEM engineering and technology. Further management appointments will be announced prior to closing. The companies will continue to operate independently until the transaction is completed and will work together to determine the combined company's corporate name and headquarters location prior to closing.
Previous reports on both Sirius and XM indicated that both companies were suffering from losses, especially in 2005 going into 2006. Revenues were dropping and subscribers were leaving from both companies. A merger of the two companies would make sense from a corporate stand point but both companies have to pass grueling anti-trust regulations before the two combine.

Gary Parsons, Chairman of XM Satellite Radio and Hugh Panero, does not seem deterred by the FCC's statements.  "We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers. The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago."


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RE: Good news...
By Moishe on 2/20/2007 7:58:46 AM , Rating: 2
I've never heard Sat radio, I thought it was supposed to be like the difference between cable and over-the-air broadcast tv? (in other words, very clean compared to regular radio)

Those satellites have got to cost a fortune. I don't know how they've managed to stay in business this long. Maybe it's just me, but I don't see much real benefit in satellite radio. I know there is more of what you want... but I rarely listen to the radio anyways. With the price and ease-of-use of mp3 players, I can drive across the country and rarely listen to the same song twice. If I get bored I can tune into a local station and see what's on.


RE: Good news...
By h0kiez on 2/20/2007 8:34:28 AM , Rating: 2
I've never heard Sat radio

Maybe it's just me, but I don't see much real benefit in satellite radio.

Well...at least you advertised yourself as clueless. I have Sirius and wouldn't be without it...much like the majority of people who have tried it.

I also use an MP3 player in my car sometimes, but it's sort of hard to discover new music from your mp3 player. And as for tuning into a local radio station while driving across the country, are you kidding? In a handful of major metro areas, you might have a chance of finding a station that plays some decent music (that's low quality and full of commericals)...in the other 90% of the country you're gonna hear country tunes and static.


RE: Good news...
By SmokeRngs on 2/20/2007 1:19:21 PM , Rating: 1
quote:
Well...at least you advertised yourself as clueless. I have Sirius and wouldn't be without it...much like the majority of people who have tried it.


If you're going to call that guy clueless, I'll have to call you deaf. A friend of mine has Sirius in his car. We were driving around one day when he changed from the radio to Sirius due to the Christmas music that came on. After about a minute I wanted to plug up my ears with something. The sound was extremely flat and sounded like a low quality, joint stereo mp3. I couldn't stand it and it did cause me discomfort. As it was his car, I didn't say anything but I was very relieved when he changed it back to the FM radio. Without a MAJOR quality improvement there is no way I'll go near satellite radio.

quote:
I also use an MP3 player in my car sometimes, but it's sort of hard to discover new music from your mp3 player. And as for tuning into a local radio station while driving across the country, are you kidding? In a handful of major metro areas, you might have a chance of finding a station that plays some decent music (that's low quality and full of commericals)...in the other 90% of the country you're gonna hear country tunes and static.


Yes, it is hard to discover new music when listening to an mp3 player. However, many would argue that there isn't much in the way of good new music out there anyway. Not to mention I can find new music on the FM radio. Also, your personal taste in music has little to do with the variety of music in areas other than your own. It's not much of a point to argue in your favor. I already addressed the quality issue.

I normally don't listen to commercials all that much while in my car. However, I do find some of them entertaining and informative. It's also interesting to listen to the commercials in other areas. The variety in local commercials from area to area can be a source of amusement. The difference in local personalities for DJs is also nice. Also, radio allows me to hear location specific news/events/weather. I can't get this with satellite radio.

Satellite radio does not fit my needs or the needs of many others. It's entails extra equipment costs (not a big deal to me since I replace the stereo system in every car I own anyway) and monthly fees. Those are turnoffs to a lot of people.


RE: Good news...
By sprockkets on 2/20/2007 11:14:50 PM , Rating: 2
It used to sound good, but XM added more channels, but they still had the same amount of bandwidth, so they reduced the bitrate of the music. They use AAC, which sucks even at around 128kbps. In fact, in some tests, the latest LAME encodes sound better. So now, even normal radio sounds better. Even peoples voices on XM sound metallic.

AAC is also what HD radio uses. Basically, they traded high frequency response for pre echo artifacts.


RE: Good news...
By masher2 (blog) on 2/20/2007 8:48:04 AM , Rating: 3
> "Those satellites have got to cost a fortune. I don't know how they've managed to stay in business this long..."

Massive infusions of cash, primarily. And they're spending more on buying content at the moment than they are on their satellite constellations.


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