General News

In a press release this morning,  the companies expect to agree, among other things, to :

– adopt comprehensive compliance plans, and take steps to address any potentially non-compliant radios remaining in the hands of consumers. This could be a positive for me and a couple of my old radios which may be getting an upgrade!

– Xm will have 60 days to shut down 50 repeaters and shut down or bring into compliance an additional 50 and Sirius must bring into compliance or shut down up to 11 variant terrestrial repeaters that were already shut down in 2006 by Sirius.

Sirius and Xm will also be required to make a voluntary contribution to the United States Treasury of approximately $17 million in the case of XM, and approximately $2 million in the case of SIRIUS. (You gotta LOVE those voluntary requirements!)

This resolution is widely believed to be the final hurdle before the FCC grants the license transfer application of Sirius and Xm.  

Full press release

SiriusBuzz Radio airs each Thursday night. This weeks show is at 9:00 PM EST and will feature all of the news brought to you by Tyler, Charles, and Brandon. Callers are welcomed to join the show by calling 347-935-7995.

Updated news, chat room, and live callers discuss all of the information regarding the sector. Set aside an hour, and join in the show.

Catch up on all of this weeks SDARS action at SiriusBuzz Radio

In the last four trading days Mark Winkes, an analyst following the sector has come out with three reports, all of which were negative. The reaction by the street…..yawn

Wienkes has been a satellite radio bear for quite some time. About a month ago he took the price targets on Sirius an XM substantially. At that time the reaction was instant and dramatic. Sirius and XM, hampered by the lack of a decision on the merger, caved on the news.

Oh how the mighty have fallen. Perhaps it was a $5 price target on XM that the street simply viewed as going way over the edge, or perhaps it was that more recently there had been measurable activity on the merger. Either way, the words of Mr. Wienkes seem to no longer shine the way they did a month ago.

The merger news and the FCC seeming to arrive at the conclusion without additional delays seems to have arrested the opinion of Wienkes. Will we see yet another report tomorrow? Only time will tell.

Adelstein released a statement Wednesday.

“I was hoping to forge a bipartisan solution that would offer consumers more diversity in programming, better price protection, expanded choices among innovative devices and real competition with digital radio,” it read. “Instead, it appears they’re going to get a monopoly with window dressing. We really missed a great opportunity to reach a bipartisan agreement that would have benefited the American people.”

It appears that Adelstein has in fact tipped us off as to Commissioner Tates intent.

XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) today announced preliminary results for the second quarter of 2008. XM added 322,000 new net subscribers in the second quarter of 2008 for a total of 9,653,000 subscribers, a 17 percent increase in subscribers since the end of the second quarter of 2007. Total gross additions for the quarter were 1,081,000, including a record 857,000 OEM gross additions, the fifth consecutive quarter of record OEM gross additions, and 224,000 retail gross additions.

Second quarter 2008 churn improved to 1.67 percent, compared to both second quarter 2007 churn of 1.84 percent and to first quarter 2008 churn of 1.77 percent. XM also announced that subscription revenue for second quarter 2008 is expected to be in the range of $283 million to $288 million and that the second quarter 2008 adjusted operating loss is expected to be in the range of $32 million to $38 million (excluding the impact of any FCC settlement). Conversion rate for promotional subscribers is expected to be in the range of 52.7 percent to 53.4 percent.

XM announced its preliminary results in connection with XM and Sirius’s merger-related offering of senior notes, announced separately today. XM’s independent accountants have not completed their review of the second quarter financial information and XM is still in the process of completing its normal quarter-end closing process. Accordingly, actual results may vary from the above amounts and such variance could be material. The company expects to file its 10-Q report for the second quarter 2008 in the next few days.

I have been considering all that has happened in this circus merger process, and I have been reviewing some of my fellow posters articles, as well as my own. It has occurred to me that one of the things that has been criticized the most, could in fact be the turning point to this merger, and that is HD radio. What do we know about HD radio?

1. A slew of Attorney Generals have proposed it as a condition.
2. A ton of Congressmen have proposed it as a condition to merger.
3. iBiquity has proposed it as a condition to the merger.
4. Even Commissioner Addelstein has proposed it as a condition to merger.

So by agreeing to install HD into all future models of SatRads, Sirius/XM could potentially swing a large amount of support towards the side of approval. This would have to be done with some stipulations, of course.

1. All FUTURE models would be designed with HD radio. All current models are exempt from this requirement.
2. iBiquity or the HD alliance would have to provide the funding to pay for all of the HD chipsets that would be installed into the radios.
3. iBiquity or the HD alliance would have to assist with design costs for the inclusion of HD radio.
4. iBiquity or the HD alliance would have to share the cost of subsidies for the installation of Satellite/HD radio combos to manufactures. Sirius/XM would still be on their own regarding revshare, etc.
5. The agreement does not mandate Sirus/XM or any of their partners to provide any advertising or technical assistance in regards to HD radio, other than that guaranteed by the unit’s warranty.

This proposal would show that Sirius/XM are willing to help support HD radio, as long as they are willing to support themselves. To me, HD is not a deal breaker, as long as Sirius/XM do not have to foot the bill. Is the HD Alliance willing to put some money into the deal or are they simply looking for a free ride?

Feel free to comment here, or head on over to the Sirius Buzz Forums to discuss this further.

Position: Long Sirius, XM.

Another day, another outrage. The lines are forming down the street. There seems to be no end to the parade of groups looking to steal a piece of the previously bid, bought and paid for spectrum that belongs to the shareholders of Sirius and XM satellite radio. A subscription based, pay radio service.

Some recent opposition points to the increased value of the spectrum since it was bid, bought and paid for by the companies as unfair. I wonder if they would feel that way if their own homes appreciated in value. Perhaps they also feel that because my home has appreciated in value, I should be forced and willing to give up 25% of my land.

This utterly repulsive suggestion does not end there, however. These groups and individuals want to use this spectrum, to broadcast whatever the highest bidder pays them to broadcast. They claim to want a minority ownership interest which may not translate into minority directed broadcasting. They wish to assume total control of the spectrum, so in theory, they could broadcast things that would make Howard Stern cringe. The effect of such actions would be the destruction of satellite radio. They could sell their rights to terrestrial radio, and satellite radio would be inundated with 60 channels of commercial laden music channels or even worse, dead air.

They want to do this on radios that were subsidized, marketed and installed at shareholder expense. They want to accomplish this by using the equipment and satellites built, deployed and paid for by the shareholders. They want to profit from advances made from the research and development paid for by the shareholders of Xm and Sirius. Some even propose doing this at the expense of the shareholders, with few lease proposals hitting the table.

I have a suggestion to make this proposal reasonable. First. Let’s put a dollar value on the spectrum. Recent auctions would indicate a combined value of about 30-40 billion dollars. At 25%, Sirius/Xm should receive 7.5 - 10 billion dollars for the spectrum itself. The person who pays the 10 billion dollars can then go out and launch their own satellites and produce their own radios and broadcast whatever minority and public interest programming they choose. They can sell it to Clear Channel. I don’t care! They can have their very own satellite radio service, but in my opinion, the proposed theft of shareholder value must come to an abrupt end.

As has been pointed out dozens of times, Sirius and Xm currently offer a higher percentage of minority and public interest programming than all of terrestrial radio combined! And they do it without government intervention.

Position: Long Sirius, XM.

SiriusBuzz Radio will cover all of the hot topics surrounding the Sirius and XM merger at 10:00 PM EST, so don’t miss out on the show. Callers are welcomed at 347-945-7995.

• Is Adelseins proposal all for show?
• Is AlphaStar viable?
• Did C3SR really ask for free radios? And are they beginning to believe that the merger will pass?
• Are car sales having an impact on SDARS?
• What will commissioner Tate do?

All this and more tonight on SiriusBuzz Radio at 10:00 PM EST

Anyone following the Sirius / Xm merger process should be baffled. In a second year now of repeated opposition by terrestrial radio lobbyists and their congressional henchmen, it seems to be getting down again to one common thread. Hybrid Digital radio. Not high definition, although they’d like you to believe that. The reviews of hd radio clearly indicate that consumers are not at all happy with it.

It’s easy to forget past arguments regarding competition and consumer choice. How odd! The same people and groups who cried foul over consumer choice when the merger began, are now suggesting choice be stripped away. They propose to do this by means of a government mandate that will have the effect of forcing all Americans to listen to hybrid digital radio, whether we want to or not. And they’d like Sirius to pay for it!

This proposed mandate will guarantee every person the opportunity, to listen to up to 3 times the commercials than they are currently bombarded with on terrestrial radio stations. How about THAT for a consumer benefit?! Where may I ask does the competition lie in this?

It boggles the mind that the FCC would even consider such nonsense. A conspiracy theorist might question whether or not it somehow gives the government a way of tracking people, because there is no reasonable conclusion a normal thinking person could arrive at.

To see clearly the utter insanity of such a mandate is simple. This proposed mandate is the equivalent of ordering Coca-Cola to include a certain percentage of Pepsi in each bottle. It is equivalent to forcing every Apple computer to include a Microsoft operating platform. To top it off, Ibiquity would suggest that Apple should be forced to pay all costs incurred for including Microsoft XP in their computers! Why are these discussions even taking place?

The NAB has had a stranglehold on the American consumer for decades. We hear what they want us to hear and we buy what they want us to buy. We read what they want us to read….as long as the price is right. This merger represents a chance to level the playing field and actually hear, read and see a perspective that might not agree with a given political candidate or party’s view. Ironically, this merger will raise the overall intelligence of America. People will be MORE informed, with access to information and entertainment from many different perspectives.

Position: Long Sirius, Xm.

Sirius Buzz Radio will air our hour long weekly Thursday night segment this evening at 10:00 PM Eastern. Due to popular request, future Thursday shows will shift to the 9:00 PM time slot. Join Sirius Buzz Radio live, call in, express your thoughts and opinions, or ask questions. Callers can reach the show by dialing 347-945-7995.

Position: Long Sirius, XM.