What is the chance that regulators will permit Sirius Satellite Radio, Inc. (NASDAQ: SIRI) and XM Satellite Radio Holdings, Inc. (NASDAQ: XMSR) to combine? According to the New York Times' DealBook, probability estimates range from "less than 50%" to 50%. Thus investors should calculate the value of SIRI and XMSR under at least two scenarios: one where the deal does not go through and the other where it does.

SIRI and XMSR are the only two satellite radio companies out there now. If they merged, the new company would have a monopoly -- which would enable it to raise prices to subscribers and advertisers without the check of competition. Preventing such abuse of monopoly power is one of the reasons that antitrust laws were established. Furthermore, the Federal Communications Commission (FCC) has a rule prohibiting XMSR and SIRI from ever owning each other's licenses.

Last night, Sirius Satellite Radio Inc. (NASDAQ: SIRI) said it passed the 6 million subscriber mark, hitting a lowered subscriber target.

More importantly, Sirius said it will hit its free cash flow guidance number. Historically, upstart communications stocks begin to perform very well when they turn free cash flow positive.

Sirius said subscribers increased 82% versus year-end 2005, adding 2.7 million net subscribers in 2006 - a big number despite the subscriber forecast being lowered.

Mel Karmazin said in previous meetings with the investment community that he expected Sirius to turn cash flow break even by the fourth quarter of 2006, and expects to generate $1.0 billion in free cash flow by 2010. Mel is on target. Mel, seldom, if ever, has missed a cash flow number.

Sirius Satellite Radio, Inc.(NASDAQ:SIRI) will offer live TV service by the end of 2007 in 2008 car models. So says Mel Karmazin, the Sirius CEO.

The new service will cost $13 a month more that radio service, but it is not clear how much the new system will add to the price of a car. Karmazin hopes that the new service will increase yield-per-subscriber.

It is a shrewd move for Sirius. If it can get to market with the service before XM, Satellite Radio Holdings, Inc. (NASDAQ:XMSR) it would offer the smaller satellite radio company a significant "first mover" advantage that could help SIRI get closer to XMSR in terms of total subscriber count. If XM does not have the service, it could also push Sirius well ahead in subscriber yields.

That's If people want TV in their cars. Rear-seat entertainment centers are already a staple in many automobiles. Most play DVDs. It is safe to assume that the cost of the hardware for the TV service will not be cheap. What consumers will pay for the intial system is hard to say.

But, it is innovative.

Douglas McIntyre is a partner at 24/7 Wall St.

Firing quite the shot across the bow of its satellite radio rival, Sirius Satellite Radio CEO Mel Karmazin told audience members at a conference on media convergence that he'd happily buy XM Satellite Radio. Executives from XMSR (surely wondering what "the right price" might, exactly, mean) hadn't commented, yet, at the time of this post.

That would be quite some convergence. As the two companies have raced each other to forge deals with opposing car makers and big media names, and have struggled to out-innovate and out-subscribe one another, it seems as if nothing defines the sector so much as the rivalry.

Monopolistic concerns would certainly be raised by regulators, although really: what harm could come of having only one satellite radio company? It's not like consumers have no other choice for their listening pleasure in their cars, or anywhere else, for that matter -- what with offerings ranging from the iPod to the common FM station.

Regulators, it's possible, wouldn't agree with my "who cares?" analysis: they stopped an earlier proposed deal between DirecTV and Echostar.