Satellite Radio Merger Means Some Head-Scratching

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The announced merger of two struggling companies has made waves across the radio world. Sirius and XM have agreed to combine their satellite radio companies, though the FCC still must approve it. It all comes as many in the industry say the merger amounts to a monopoly.

For Ben Downs, the head of Bryan Broadcasting, satellite radio has been something to be aware of, but not afraid of.

"Right now, XM is spending $135 per person that signs up for their service, and that's a lot of money," Downs said. "At $7 million subscribers, you can see why they would want to remove the competitive side to this."

Reports have Sirius and XM at a combined value of $13 billion, but that includes $1.6 billion in debt. The companies' stocks each dropped 40 percent last year. So while a combined 14 million people subscribe to the would-be partners, Downs says people still recognize the value of terrestrial radio.

"For one thing, you'll never hear weather forecast for Bryan/College Station on any of the XM or Sirius channels," Downs said. "You're never going to hear about a school closing. You're never going to find out what the siren was last night. It's not going to be there.

"I think that it does say that terrestrial radio has a niche and it fills that niche," he added.

Downs' stations have run promos and quick jabs at satellite radio. It's recognition of new technology, he says, and something they'd be foolish not to do. But this new deal, he says, is something to be skeptical about.

"I can't be the only person who knows that the FCC authorized satellite radio by saying there had to be two people in the business, and each could not own the other," Downs said.

An FCC ruling could come soon, and it's one all in the industry will stay tuned for.