Of course, any time a new competitor comes along with a new business model offering consumers new choices, the old guard gets its dander up, and inevitably turns to the federal government to protect its turf, and preserve market share. In this case, the old guard is one of the oldest, the National Association of Broadcasters. NAB is a dinosaur of the lobbying industry, both in its size and its age. And NAB isn’t at all happy that radio listeners would rather pay for subscription radio than continue to endure the pap broadcast by its members.
What concerns NAB most is that XM and Sirius have recently begun to look at offering localized programming instead of the one‐size‐fits‐all national programming they beam down at the present. Sirius just signed a deal with the NFL to offer regionalized football coverage. More disconcerting for NAB, XM will begin broadcasting local traffic and weather to select cities beginning in March. NAB fears localized coverage from satellite because local news, traffic, weather and sports are really the only thing local radio stations have left to keep listeners. Should satellite radio offer better localized coverage than “terrestrial stations”–as it has so far done with other programming-there’d really be little reason left to turn on the traditional radio.
So NAB is dialing up the pressure. Several years ago, the organization strong‐armed XM into a sort of gentleman’s agreement with respect to the use of “repeaters,” which boost the strength of satellite signals in urban areas. NAB wants XM to use repeaters solely for the purpose of boosting the signals of programs intended for the entire country. But repeaters could also be used to allow XM and Sirius to offer regional and localized programming. The two services are increasingly looking at that option. And the NAB is getting increasingly agitated.
In a recent press release, NAB scolded XM for treading on its turf, stating XM violated “the spirit of a terrestrial repeater agreement NAB recently negotiated with XM barring XM from local programming delivery.”
The same press release issued out of fear from competition then bizarrely concludes with a statement of self‐assurance. “But there is no doubt the 175 million daily listeners of local radio stations know that the best and most reliable source for news, school closings, and weather and traffic alerts continues to be their local broadcasters.”
Great. So what’s there to fear from XM?
In a clear indication of NAB’s intent to regulate away the pesky upstarts, the press release says that “NAB will explore the legality of XM offering this program Service,” and that XM’s new plan “represents an appalling back‐door attempt to bypass the FCC’s intent to limit satellite radio to a national service only.”
In fact, though the FCC has (mistakenly) indicated it would prefer satellite radio not offer localized programming, there are some indications it may be budging from that position. FCC commissioner Michael Copps told Radio and Records magazine last year that he is “a big devotee of localism,” and that he’d “look with great interest” at any proposal allowing satellite radio to penetrate local radio markets.
But NAB is as entrenched a lobbying organization as you’ll find in Washington. Marsha MacBride, the organization’s new Executive Vice President for Legal and Regulatory Affairs, took her position late last year, fresh off a two‐year stint as the FCC’s chief of staff. 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 any local programming. “It is clear that nothing now stops XM from… offering local programming in the terrestrial radio market to hundreds of thousands of automobile subscribers,” Tauzin wrote. Tauzin defends the “terrestrial” monopoly on local programming, and expresses his desire to retain it. “We maintain convinced that the final licenses for SDARS repeaters should prohibit these devices from in any way participating in the delivery of localized programming,” he writes.
There’s no consumer interest in preventing a new technology from competing with traditional radio coverage of local news, weather and sports. The biggest argument against the new FCC ownership regulations was that when giant multinationals control programming, local programming suffers. Here’s an opportunity to expand the number of players in local radio programming, which would give consumers more options, which would compel the industry’s dinosaurs to deliver better service, or lose market share. There’s really only one reason to ban satellite radio providers from delivering local coverage–to protect the existing radio industry from competition.