Lucent Digital Radio and USA Digital Radio Agree to Merge to Create New Entity - iBiquity Digital Corporation - Speeding Development of Digital Radio Standard

Business Wire, July 12, 2000

Business Editors

COLUMBIA, Md. & WARREN, N.J.--(BUSINESS WIRE)--July 12, 2000

Leading technology developers of digital radio broadcasting, Lucent Digital Radio and USA Digital Radio, today announced their intent to combine both companies' operations.

The merged company's new name will be iBiquity Digital Corporation. The combined entity will enjoy the backing of Lucent Technologies and 15 of the nation's top 20 radio broadcasters, including Infinity Broadcasting Corporation, a majority-owned subsidiary of Viacom Inc. and Clear Channel Communications, Inc.

This merger will pave the way for rapid development and commercial deployment of AM and FM In-Band On-Channel (IBOC) digital radio in the United States. The merger has been approved by the Board of Directors of both companies and their respective shareholders. It will close subject to customary legal requirements.

The merger will create a company whose mission is to develop and commercialize digital radio technology solutions, including LDR's audio compression technology PAC(TM), that will transform the terrestrial radio industry from being primarily providers of audio-only analog service to being providers of high quality digital audio and data delivered in mobile and stationary environments.

Today, radio in the United States is broadcast using analog signals. iBiquity Digital will enable broadcasters to send a digital signal, capable of containing CD-quality audio with crystal clear reception and additional wireless data for a variety of consumer applications such as station and program content, stock and news information, local traffic and weather, and much more, over existing radio frequencies, without denigrating transmission of current analog programming.

Following this merger, Suren Pai, president & chief executive officer of Lucent Digital Radio, and Robert Struble, president & chief executive officer of USA Digital Radio will become co-chairmen of the Board; Struble will lead iBiquity Digital as its president and chief executive officer. The management team of the combined entity will be comprised of senior executives from both LDR and USADR. The new company will maintain operations in both Warren, New Jersey and Columbia, Maryland.

"Today, digital radio takes a major step towards becoming a reality. Our proposed merger will establish a clear path for AM and FM radio to not only join the digital revolution, but also to propel it well into the next generation" proclaimed Robert Struble. "This merger of equals creates a new, world class company whose focus and industry transforming technologies will be directed toward making AM and FM digital radio broadcasting a reality for listeners, broadcasters and manufacturers. Together our organizations represent the best of the best in technical skills and marketplace understanding. iBiquity Digital will change how the public uses, thinks of and benefits from radio."

Suren Pai hailed the proposed merger as a "watershed development for the radio industry and the listening public." Pai added, "both organizations have been working tirelessly to bring AM and FM digital radio to fruition and today we are pleased to announce that our individual capabilities and resources will be combined into one company, thereby expediting the delivery of a digital radio standard to broadcasters and ultimately the public." Pai continued by saying, "combining the complementary strengths of our organizations under Bob's executive leadership positions iBiquity Digital as a global digital broadcast technology powerhouse. We will be able to expedite the standard setting process by offering the Federal Communications Commission (FCC) and consumer electronics and broadcast equipment manufacturers the best technology available as the US standard for digital radio broadcasting."

Struble called upon radio broadcasters and consumer electronics manufacturer, "to focus their efforts on developing programming, content and product ideas for the coming age of digital broadcasting for radio." iBiquity Digital will work closely with the FCC, the National Association of Broadcasters (NAB), and the Consumer Electronics Association (CEA) to make certain that a digital radio standard is selected as quickly as possible.

Industry leaders hailed the merger decision as a critical milestone for radio. Gary Shapiro, CEO of the Consumer Electronics Association stated, "This is terrific news for all of the players, especially consumer electronics manufacturers and consumers. I applaud the decision of both companies, and pledge to work with iBiquity Digital to bring digital broadcast services to the United States. This is a powerful combination of resources and now we can continue the revolutionary transition from an analog world to a digital world."

"Today's merger signals that an exciting transition to digital is fast approaching for AM & FM radio broadcasters," stated Mel Karmazin, President and Chief Operating Officer, Viacom, Inc. and Chairman and CEO of Infinity Broadcasting. He continued, "the AM & FM digital radio technology developed by iBiquity Digital will position radio to experience greater future growth by delivering a digital quality listening experience and a host of local wireless data services."