Re: XM and Sirius Consider Merger

PARIS -- The two big U.S. satellite-radio companies,

> XM and Sirius ... agree that a merger would result in > substantial cost savings and might even pass muster > with U.S. regulators.

Klay Anders> Yeah, but the FCC Chairman Kevin Martin says not according

to US laws...

Jim Haynes wrote:

I can understand how a merger of the two companies results in a > monopoly, and will probably result in higher charges and less > consumer choice. Yet what if only one company had entered the market > in the first place? Would the FCC have demanded that they go out and > find a competitor before allowing them a license?

Actually, four companies participated in the auction for the two satellite DARS (digital audio radio service) licenses. Each winning bidder got half of the available spectrum, or 12.5 MHz.

The bidders:

- American Mobile Radio Corporation (XM) won with a bid of $89,888,888.

- Digital Satellite Broadcasting Corp. dropped out of the auction.

- Primosphere dropped out of the auction.

- Satellite CD Radio, Inc. (Sirius) won with a bid of $83,346,000.

My guess is that if only one company had entered the market, the FCC wouldn't have issued any DARS licenses. Among other reasons, the fact that several potential licensees petitioned the FCC for DARS licenses led the FCC to allocate the spectrum space in the first place.

Parenthetically, if XM and Sirius do merge, I'm curious about which satellite fleet they'll use. Their current fleets are not compatible: XM uses two satellites in geostationary orbit, while Sirius uses three satellites in Molniya orbit.


- FindLaw Library: Satellite DARS Auction to Commence

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FCC: Auction 15: Digital Audio Radio Service (DARS)
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Geostationary orbit:
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Molniya orbit:
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Neal McLain

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Neal McLain
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