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Thursday, July 20, 2006

Widely Traded 48 Hour Clock: Sirius Has A Product Problem

Stocks: (SIRI)(XMSR)

Sirius Satellite filed notice with the SEC that some of its products are out of compliance with FCC regulations. The products are under ongoing review. XM Satellite Radio has run into the same problem.

The issue opens a door to a factor in the growth of Sirius and its larger rival. Both company's stocks have fallen sharply on high costs and the perception that subscription growth may be slowing. But, both companies are now also demonstrating to investors that government regulation could take a larger hand in the fate of the products they need to market to keep up with consumer demand.

Product availability is becoming an issue for both companies, but a year ago, not one would have guessed that the problem could be exacerbated by the federal government.

Douglas A. McIntyre can be reached at He does not own securities in any of the companies he writes about.

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