Gadget Bloggers

Competition is a wonderful thing.  I shudder to think how expensive DirecTV or Dish Network would be, if one of them didn’t exist and there was only one satellite TV provider.  (That merger almost happened.)

But in the wake of more bad news for satellite radio, the talk about a possible merger is getting louder. 

The latest bad news comes from the FCC, which says XM’s RoadyXT and MyFi fail to pass interference tests.  These models, like many satellite radios, retransmit the audio over FM frequencies in order to play on your car radio or boom box.  Apparently the signals put out by these models are strong enough that people in surrounding cars can pick them up.  And ordinary broadcast FM signals are getting drowned out.  (Broadcasters are furious about this.)

As a result, Wall Street analysts grumble, and satellite radio stock prices tumble.  If XM and Sirius can’t keep their products on the shelves because of FCC concerns, especially going into the holiday buying season, the consequences could be disastrous.

That’s where the merger talk comes in:  ordinarily, antitrust regulators would scream about creating a monopoly in the satellite radio business.  But if bankruptcy becomes the alternative, the regulators would back off.

Satellite radio’s made huge expenditures for sports rights and talent fees, including the $500 million paid to Howard Stern by Sirius, making him the second highest paid entertainer in any medium in the world.  If satellite radio can’t get its act together, Howard may be wondering where his next paycheck is coming from.

[via Hollywood Reporter, Blogging Stocks]