Two companies battle over satellite radio

By Ashlee Vance, InfoWorld |  Tech & society, Tech & society

Sirius Satellite Radio and XM Satellite Radio Holdings made quite a stir during this year's Consumer Electronics Show (CES) held here. Both companies set mid-year timetables for delivery of their rival satellite radio systems and displayed the first audio equipment that will allow consumers in the United States to receive their broadcasts.

Satellite radio will allow users to receive signals nationwide from the broadcasts delivered by New York-based Sirius and Washington-based XM. Unlike traditional radio, where signals fade when users move outside of a fixed coverage area, the content delivered by satellite radio should be accessible regardless of a user's location in the United States. Sirius and XM built their own broadcast studios and will deliver a mixture of original and licensed content.

In 1997 the U.S. Federal Communications Commission (FCC) completed the auction for the so-called "S-band," a portion of spectrum allocated to satellite radio. While a number of companies participated in the auction, only Sirius and XM eventually won permission to occupy the S-band portion of U.S. airwaves. Paying around $90 million apiece, the victors are now each ready to broadcast 100 channels of satellite radio content to users across the nation.

Sirius has already put three satellites into orbit over North America. The company will use the satellites and a broadcast studio in New York to transmit 50 commercial-free music stations along with 50 channels of news, sports, talk, comedy, and children's programming. The company has announced partnerships with Ford Motor, DaimlerChrysler, and BMW, who expect to put satellite radios in some of their automobiles by the middle of this year.

Motorists will be able to pick up the service for a monthly fee of $9.95, and may also get it bundled when buying or leasing a new car. Content providers such as CNBC, BBC Worldwide, and A&E Television Networks will broadcast programs on some of the 50 non-music channels that will be offered by Sirius.

XM, meanwhile, is set to launch the first of its two satellites on Monday. While behind in the satellite race, XM unveiled 24 different models of satellite-ready radios here at CES made by Sony, Pioneer, Alpine Electronics, and others. One unit from Sony can be used both in the car and at home. The Sony device connects to a user's cassette player, is about the size of a car radar detector, and fits into a sleeve mounted on the user's dashboard. The radios from Pioneer and Alpine, meanwhile, will be priced on average $150 more than their standard radios and will go directly into the car's audio slot.

"We are going to do to the radio what cable has done to the television industry," Hugh Panero, president and chief executive officer of XM, said in an interview here.

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