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The Merger Between XM Radio and Sirius July 26, 2008

Now, 17 months after the initial announcement by managements of the two satellite radio companies that they were seeking to merge into one operation … the U-S government has finally give a “green light” to the request …  with the Commissioners of the Federal Communications Commission on Friday evening July 25th voting in favor of the action … based on the managements of the two companies having agreed to meeting certain conditions.

We’ve taken responses and comments by enLighten 34 Program Director Marlin Taylor which have previously appeared on this page, have included a few updates to provide the most current information … and are reprinting here:

First of all, the question every listener wants answered … what will happen to enLighten, is it likely to go away?

Absolutely not! I am pleased to report that in listenership, enLighten ranks in the top one-fifth of all of XM’s 170 channels … with more than a half-million persons tuning in every week … and the latest data reports that an average of 40,000 dear listeners are tuned in at any given time! And, many in our “family” are listening for long hours most every day.

This makes the enLighten body of listeners a serious segment of the total XM subscribership … and management recognizes that a goodly number of you listen to little else in the XM lineup. Add to this the fact that Sirius has no counterpart to enLighten34 or anything remotely close to Southern Gospel.

Can we expect to hear changes occurring on enLighten or other XM channels in the near future?

No. Even if you do listen to multiple XM channels, the likelihood of you hearing any changes in the near term are virtually nil.

Down the road, will I need to purchase a new radio?

If your interest is only in enLighten and, possibly, a few other channels already on XM, it’ll likely be years before you’ll need to take any action. Once the merger is completed and new “combination” radios are available, if you have a desire to hear specialized programming which is heard on Sirius but has not been added to the XM lineup, you then can choose to acquire that new receiver.

When the two companies become one and there’s no more competition between them, can I expect the subscription price to go up or for commercials to be added to XM music channels such as enLighten?

Both managements have publicly stated … acknowledging the competitive environment which now exists  in audio entertainment … that they have no plans to increase subscription fees or add commercials to any music channels. In fact, as a stipulation in the FCC agreement permitting the merger to go forward, the companies are restricted from raising subscription rates for at least the next three years. Plus, they are expected to introduce a la carte plans, which should allow anyone who cares to listen only to enLighten34 and a small group of other channels, to do so and pay $9.99 or less per month.

While I cannot speak for corporate management, it is my confirmed belief that the biggest change you, the enLighten listener, might encounter sometime in the years down the road is a change in channel number, which could occur at the point when the two channel lineups are melded into one.

After reading the above statements, David Bruce Murray of www.musicscribe.com posed a question to Marlin as a means of further clarifying statements he made:

DBM: A couple of your statements seemed to contradict each other. At one point you mention that customers might need new receivers in order to get the full combined services of both XM and Sirius. At another point you mention XM and Sirius merging their channel lineups.

Will XM and Sirius merge their channel lineup, and if so, why would a new receiver be necessary?

I’ll attempt to answer this without getting too technical or overly detailed. There are two limiting factors right off in any combining of the two companies’ systems: First, they operate with two very different transmission systems, which complicates the design of a receiver which can pick up both, let alone having current radios for either service receive the other’s programming. Secondly, both systems are max’d out from a technical aspect, so they cannot be expanded to include channels from the other company’s lineup.

For instance, for the merged company to deliver Sirius’ NFL broadcasts, something will need to be bumped, the same will be the case if enLighten34 were to be made available to Sirius subscribers. This limited availability of “bandwidth” allocated to each company by the FCC is what caused so much time to pass before Southern Gospel was added to XM’s satellite lineup – another format had to bumped.

Existing receivers will not be made obsolete … they still will be able to receive the channels which their present service continues to deliver. At some point, when the companies’ decide to merge their lineup – meaning that where programming is presently duplicated by both parties … mostly in the Country and rock arenas and some news/talk channels like Fox News, CNN (examples only, nothing been determined) … is eliminated, a person’s favorite channel may land on the “other side” of the combined service.

Repeating the question that’s most asked … will the merger have a negative impact on enLighten34. While I am in no position to say anything with 100% certainty, here is how things look: The merger proposal calls for continued diversity in programming, and that long-range … only channels on which the programming is duplicated on the two systems will be dropped. And, this is only to happen when new radios capable of receiving both XM and Sirius channels are dominant in the marketplace.

In reality, when the merger process is completed, a small group of channels – ones with very low listenership – on both sides likely will be eliminated so that a select group of channels can be added on each side … such as baseball on Sirius and NFL football to the XM lineup.

Bottom line:

As stated previously … enLighten34 is one of XM’s most-listened-to channels with tens of thousands of regular listeners, many of whom are known to listen to little else. And that’s what will keep enLighten34 firmly in the lineup … if there’s no good Southern Gospel programming being offered, tens of thousands of XM subscribers will have no reason to retain their subscriptions! Therefore, it’s hard to see how management would consider an action which carries such a negative economic impact as being a sensible move.

If you have additional questions or comments, please send them along to Marlin.

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