All Politics is Local: How Broadcasters Want to Silence Satellite Radio


Most of the torrent of opposition to the FCC's modest proposalto loosen media ownership restrictions last year stemmed from fearsthat they'd lead to information flow and entertainment programmingfalling into the hands of just a few behemoth media conglomerates.In a recent issue of Reason magazine, BenCompaine rather thoroughly elucidated why those fears areunfounded. Still, if it's diversity media consumers want, theyshould be thrilled with the onset and recent success of satelliteradio. The industry's two players--XM and Sirius--offer a widerange of programming, hundreds of channels between them that brushup against every conceivable musical niche, as well as news, talk,sports, comedy, children's programming, and even radio installmentsof cable programming from providers such as E! and VH1. At just $10or so a month, satellite radio for many has been a welcomealternative to the rather dry, Top Forty-driven monotony of FMradio.

Of course, any time a new competitor comes along with a newbusiness model offering consumers new choices, the old guard getsits dander up, and inevitably turns to the federal government toprotect its turf, and preserve market share. In this case, the oldguard is one of the oldest, the National Association ofBroadcasters. NAB is a dinosaur of the lobbying industry, both inits size and its age. And NAB isn't at all happy that radiolisteners would rather pay for subscription radio than continue toendure the pap broadcast by its members.

What concerns NAB most is that XM and Sirius have recently begunto look at offering localized programming instead of theone-size-fits-all national programming they beam down at thepresent. Sirius just signed a deal with the NFL to offerregionalized football coverage. More disconcerting for NAB, XM willbegin broadcasting local traffic and weather to select citiesbeginning in March. NAB fears localized coverage from satellitebecause local news, traffic, weather and sports are really the onlything local radio stations have left to keep listeners. Shouldsatellite radio offer better localized coverage than "terrestrialstations"--as it has so far done with other programming-there'dreally be little reason left to turn on the traditional radio.

So NAB is dialing up the pressure. Several years ago, theorganization strong-armed XM into a sort of gentleman's agreementwith respect to the use of "repeaters," which boost the strength ofsatellite signals in urban areas. NAB wants XM to use repeaterssolely for the purpose of boosting the signals of programs intendedfor the entire country. But repeaters could also be used to allowXM and Sirius to offer regional and localized programming. The twoservices are increasingly looking at that option. And the NAB isgetting increasingly agitated.

In a recent press release, NAB scolded XM for treadingon its turf, stating XM violated "the spirit of a terrestrialrepeater agreement NAB recently negotiated with XM barring XM fromlocal programming delivery."

The same press release issued out of fear from competition thenbizarrely concludes with a statement of self-assurance. "But thereis no doubt the 175 million daily listeners of local radio stationsknow that the best and most reliable source for news, schoolclosings, and weather and traffic alerts continues to be theirlocal broadcasters."

Great. So what's there to fear from XM?

In a clear indication of NAB's intent to regulate away the peskyupstarts, the press release says that "NAB will explore thelegality of XM offering this program Service," and that XM's newplan "represents an appalling back-door attempt to bypass the FCC'sintent to limit satellite radio to a national service only."

In fact, though the FCC has (mistakenly) indicated it wouldprefer satellite radio not offer localized programming, there aresome indications it may be budging from that position. FCCcommissioner Michael Copps told Radio and Records magazine lastyear that he is "a big devotee of localism," and that he'd "lookwith great interest" at any proposal allowing satellite radio topenetrate local radio markets.

But NAB is as entrenched a lobbying organization as you'll findin Washington. Marsha MacBride, the organization's new ExecutiveVice President for Legal and Regulatory Affairs, took her positionlate last year, fresh off a two-year stint as the FCC's chief ofstaff. And in June of last year, Rep. Billy Tauzin of Louisiana,the powerful chairman of the House Energy and Commerce Committee,sent a letter to Chairman Powell urging him not to allow XM to engage in anylocal programming. "It is clear that nothing now stops XM from...offering local programming in the terrestrial radio market tohundreds of thousands of automobile subscribers," Tauzin wrote.Tauzin defends the "terrestrial" monopoly on local programming, andexpresses his desire to retain it. "We maintain convinced that thefinal licenses for SDARS repeaters should prohibit these devicesfrom in any way participating in the delivery of localizedprogramming," he writes.

There's no consumer interest in preventing a new technology fromcompeting with traditional radio coverage of local news, weatherand sports. The biggest argument against the new FCC ownershipregulations was that when giant multinationals control programming,local programming suffers. Here's an opportunity to expand thenumber of players in local radio programming, which would giveconsumers more options, which would compel the industry's dinosaursto deliver better service, or lose market share. There's reallyonly one reason to ban satellite radio providers from deliveringlocal coverage--to protect the existing radio industry fromcompetition.