iBiquity Digital Corporation met with the FCC on December 19, 2007, to discuss the merger of XM and Sirius. Although iBiquity does not take a position on the merger, it is concerned that the combined entity will hinder its ability to introduce HD Radio in the marketplace. It is concerned over the exclusive arrangements that XM and Sirius have with the automobile manufacturers. It says XM and Sirius may have used subsidies and incentives with the OEMs to discourage the proliferation of HD Radio. A merged entity will have a "stronger economic position and more cash to fund subsidies and incentives".
As a remedy to the merger, iBiquity recommends that the Commission imposed the following two conditions:
1. Require that HD Radio be included in all satellite radio receivers.
2. Require tha tthe merged entity terminate all exclusive agreeements and to prohibit all such agreements with suppliers, retailers, and the OEMs.
iBiquity has generously agreed to license it patents on reasonable and nondiscriminatory terms and to make its technology available for inclusion in dual use receivers.
Satellite radio paid a small fortune to have the OEMs include satellite radio in automobiles. iBiquity appears to want a free ride. It would seem to be unfair to make this a requirement for satellite radio and would undermine satellite radio.
The satellite radio providers might welcome the second requirement.
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