Quoting Space News Staff Writer Peter B. de Selding, I wrote:
> 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 Anderson <klay@klay.com.remove> wrote:
> Yeah, but the FCC Chairman Kevin Martin says not according
> to US laws...
Jim Haynes <haynes@alumni.uark.edu> 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.
References:
- FindLaw Library: Satellite DARS Auction to Commence
http://library.findlaw.com/1997/Mar/1/129996.html
- FCC: Auction 15: Digital Audio Radio Service (DARS)
http://tinyurl.com/2gpf9d
- Geostationary orbit:
http://en.wikipedia.org/wiki/Geostationary
http://www.sbe24.org/techdocs/Geosat/satgeomt.asp
- Molniya orbit:
http://en.wikipedia.org/wiki/Molniya_orbit
http://www.heavens-above.com/orbitdisplay.asp?satid=26626
Neal McLain
Neal McLain (nmclain@annsgarden.com)