GET SIRIUS OR GO XM - IGNITING A RADIO REVOLUTION 04/14/02
You must have seen the XM Radio ads on television — musical instruments raining down from the heavens ... even a grand piano that falls right in the path of a big rig, forcing the bewildered trucker to screech to a halt. An impressive, high-impact ad for satellite radio, which promises to change the way we look at the humble radio. XM’s competitor is Sirius Radio. It offers 100 channels, with 60 channels of commercial-free music in 9 different genres. Also on offer are Sirius’ 40 channels of news, sports and entertainment programming from CNBC, ESPN, ABC, NPR, Speedvision and CNN. It’s larger rival, XM, also has 100 no-commercial digital channels, which includes original programming. At the moment, there’s not much to separate the two. And since they are both entering a freshly created niche, there’s enough market volume for both to rack up a sizeable customer base. It’s state-of-the-art stuff. XM boasts 82 futuristic broadcast studios. A network of fiber optics links each studio to a mammoth library of digital recordings. Based in Washington, D.C., XM has 20 production suites and 310 audio workstations (in addition to 82 studios). But all is not hunky-dory with satellite radio. They are not too happy rubbing bandwidth shoulders with Wi-Fi. For the uninitiated, Wi-Fi stands for “wireless fidelity,” predicated on the technical standard 802.11. By the end of 2002, more than 10 million computers will have 802.11b hardware installed. It’s surprising, not to mention annoying, that wireless Internet access has not yet become available in a mainstream sort of way. While a few startups are still afloat, such as EarthLink founder Sky Dayton’s Boingo, there have been some major failures. San Jose-based Metricom’s Ricochet network is a grim example of a company that provided a connection speed of 128K bit/sec and occasionally delivered speeds up to 460K bit/sec, according to some users — cutting-edge technology — but went bankrupt barely nine months ago. The wireless mess has less to do with technology and more with slipping into a financial quicksand. Wireless Internet, unlike DSL or cable, will probably be built from the ground up, by a number of players who will form a mosaic. Quite like the gradual meshing of cellular roaming service in the ’90s, but in this case — thousands of antenna owners rather than 10 giant carriers. It’ll be the entrepreneurs’ game thereon. Coming back to satellite radio vs. Wi-Fi, the two wireless industries broadcast their signals on radio waves separated by only a small buffer. Till now, that buffer has kept the millions of Wi-Fi networks from interfering with Sirius and XM radio broadcasts. But it’s only a matter of time before the satellite radio experience transforms from mellifluous music to a hideous cacophony. With that worry in mind, the two radio companies are asking the Federal Communications Commission to step in. Within a few years, it’s anticipated that interference from the huge number of people using Wi-Fi’s signal will permeate through that buffer and warp satradio signals. To keep that from happening, Sirius and XM have asked the FCC to impose more regulations on Wi-Fi makers — like incorporating controls in Wi-Fi that will check wayward signals. Some Wi-Fi proponents have outright pooh-poohed the request that XM and Sirius have presented before the FCC. One irate retort was that the request is equivalent to asking them (FCC) to “break the laws of physics,” since it engenders keeping the stray emissions at a level equal to the amount of radiation emitted when water evaporates in sunlight. Wi-Fi requires installation of a small radio tower connected to the Internet via a high-speed phone line or digital subscriber line connection. The radio, about the size of a beer can, extends the wire line and connects with any mobile device equipped with mini-radios in PC cards. Setting up a network is relatively inexpensive, costing $500 to $1,000 to set up a system that allows wireless access in a 300-foot radius. It’s already in 1.4 million U.S. homes. By 2005, Wi-Fi will exist in 27 million homes and 28 million offices, using these networks. If the FCC agrees with XM and Sirius, that Wi-Fi can indeed snarl up satellite radio signals — makers of Wi-Fi chips would have to bear the cost of incorporating the safeguard technology. Which explains their grumpiness over the issue. But as far as the consumer is concerned, I’m sure he would like to have his cake and eat it too — XM on the road ... Wi-Fi everywhere.
WOULD IT BE RUDE TO ASK FOR CHEAPER CRUDE? 04/07/02
Asking the SUV devotee to drive a smaller, fuel-efficient car is like telling a 6-year-old to stop sucking candy. It just won’t do. But with gas prices rising steadily, fuel efficiency has become a hard-to-ignore criterion. The past month has seen a 20-cent rise in gasoline prices, affecting thousands of High Desert locals driving down the hill to work. Considering the fact that local motorists were finding prices under $1 in January, the present rise pinches all the more. The economics of oil production and supply have once again been overshadowed by the intrigues of using oil as a weapon of international politics. The threat of an Arab oil embargo looms in the air — and it’s hard to rule out a spike in oil prices. The causative factors contributing to this flux are many ... and complex. While it is anybody’s guess how far Israel will go in what it calls “right to exercise self-defense,” the Arab world on Wednesday made it known that they are not about to let a policy disagreement get in the way of a win-win oil trade. Crude oil prices dropped on Friday as much as 2.1 percent, or 56 cents a barrel. This biggest decline in six weeks is in anticipation of Secretary of State Colin Powell having a successful mediation trip, which begins tonight. But the downswing is unlikely to translate into lower prices at the gas pump as there are other factors that influence the price of gasoline. The most potent one likely to push up prices is the annual transition from winter to summer fuel blends. By environmental law, higher density of traffic and the summer heat necessitate the use of cleaner fuels (than those used during winter), and those blends cost more. Emerging from one of the warmest winters the country has ever experienced, there are more than adequate reserves of heating oil and natural gas to slow a price increase in those fuels, in case the supply of crude oil gets truncated. But the market reaction does not depend upon an actual shortage taking place — an embargo by the oil-producing nations of the Middle East is sure to push the futures through the roof. And that alone would impact the industry tremendously. Till now, the escalating violence has added between $5 and $6 to the price of crude oil in the past few weeks. The government’s efforts seem to be having some effect on the price of crude — crude oil fell for a third day on Friday, as President Bush asked Israel to withdraw from the Palestinian-controlled area. Crude oil for May delivery fell 37 cents, or 1.4 percent, to $26.21 a barrel on the New York Mercantile Exchange. While oil may be used as a weapon of mass obstruction — it’s also the Arab world’s golden goose. Rest assured, the $50-a-barrel scenario shall remain just a Wall Street fantasy, or nightmare, if you please.