Following in the mold of the cooperative Grand Alliance that set the standard for digital television, Lucent Digital Radio Inc. and USA Digital Radio will work together on a standard for digital terrestrial radio.
The previously competing companies announced their merger last Wednesday. With their working separately, "the ability to get that great [digital-radio] technology to market was compromised," USADR President Robert Struble said during a conference call.
Struble will become president of the new company, to be called iBiquity Digital, and he and Lucent Digital Radio President Suren Pai will serve as co-chairmen of the board. The company will maintain two headquarters, one in Columbia, Md., where USADR is currently based, and the other at Lucent's home in Warren, N.J.
Executives declined to disclose the value of the merger.
By agreeing to set the nation's digital terrestrial standard together, Lucent and USADR have accelerated the already decade-long process by about a year-and basically ensured FCC approval of the final product. The merger will "expedite both the development and commercialization" of the CD-quality service, Pai said.
But first the companies must agree on the technology to be used. The companies, the only two digital terrestrial radio contenders in the United States, have been working on fairly different technologies. However, both were aiming at an in-band, on-channel (IBOC) system.
Once the technology differences are settled and FCC approval is won-expected "within the next several months," according to Pai-"you will see a large number of radio broadcasters making the conversion" from analog to digital next year, Struble said. Digital receivers should be available to consumers by late 2001 or in early 2002, he added.
The merger may have been inspired, in part, by the recent focus on another digital-radio contender, this service to be delivered by satellite. On June 30, Sirius Satellite Radio launched its first satellite, with service slated to be commercially available next year. USADR's broadcaster backers-including the country's largest radio group, Clear Channel Communications Inc.; Viacom Inc.; ABC Inc.; and Entercom Communications Corp.-also have been keeping an eye on the calendar as digital sound via the Internet has grown in popularity.
The FCC also supported the merger, Pai said: "We have received good encouragement and guidance from the commission to come back with a unified proposal."
The Grand Alliance set the nation's digital TV standard in 1995. However, the new iBiquity executives laughed off a comparison, pointing out that digital television is still far from being widely accepted.