dailywireless.org » Satellite Radio Merger Goes to FCC

Satellite Radio Merger Goes to FCC

The nation’s largest group owner of radio stations, Clear Channel, wants the FCC to regulate ‘edgy’ content on any merged XM/Sirius satellite radio company. The merger would bring both companies a total of more than 17.3 million subscribers based on current subscriber numbers as of 2008.

Clear Channel’s filing represents a rare instance in which a major broadcaster has asked the Commission to expand, rather than restrict, its authority over “indecent” programming. The FCC has so far maintained that satellite radio was beyond its regulatory authority since it was available only be subscription.

The FCC is preparing to make a decision about whether to allow XM Satellite Radio and Sirius Satellite Radio to merge. The deal, announced on February 19, 2007, requires the approval of both the Justice Department and the FCC.

On March 24, 2008, the United States Department of Justice announced it closed its investigation of the merger of the two companies, citing Evidence Does Not Establish that Combination of Satellite Radio Providers Would Substantially Reduce Competition.

Now the ball is in the FCC’s court. “The FCC historically doesn’t go against a decision of the DOJ,” said April Horace, an analyst with Janco Partners. She expects FCC approval within the next month.

XM and Sirius proposed to combine in February 2007 in an all-stock deal valued at $4.59 billion at yesterday’s prices.

XM provides pay-for-service radio with 73 different music channels, 39 news, sports, talk and entertainment channels, 21 regional traffic and weather channels and 23 play-by-play sports channels. XM Radio OnlineXM’s internet radio product, , offers many of XM’s music stations and can be accessed from any Internet connected Windows or Macintosh computer. It is available free to all XM Radio subscribers, or at a US$7.99 a month to internet-only subscribers. Also, some of XM’s more generic music channels are available free of charge via AOL Radio and Winamp.
XM’s original satellites, XM-1 (”Rock”) and XM-2 (”Roll”) suffered from a generic design fault on the Boeing 702 series of satellites and were replaced by XM-3 (”Rhythm”) and XM-4 (”Blues”), with the original satellites now in-orbit spares.
In the United States XM owns and operates approximately 800 repeater sites covering 60 markets.
Sirius Satellite Radio provides 69 channels of music and 65 channels of sports, news and entertainment. A subset of Sirius music channels is included as part of the Dish Network satellite television service. The streams are broadcast from three satellites in a tundra orbit above North America. Sirius Internet Radio provides 78 of its 135 channels on the internet to any of its subscribers.

Both satellite radio companies offer premium traffic services:

SIRIUS broadcasts traffic data to 30 major U.S. metropolitan areas. It provides real-time information on accidents, traffic flow, construction, and road closures for $3.99/month, when added to your existing SIRIUS Satellite Radio subscription. It has contracted with traffic information service Navteq to provide live traffic data for 30 U.S. metropolitan areas. You need to purchase a compatible navigation system, first, however.
XM Traffic and Weather is available in 21 major metropolitan markets plus several interstate corridors nationwide.

In March 2007, Sirius announced the upcoming availability of its first video service called “Backseat TV“. The service includes streaming video from three “family” television channels: Nickelodeon, Disney Channel and Cartoon Network Mobile.

Three Sirius satellites broadcast directly to the consumer’s receiver, but due to the highly elliptical orbit only two of them broadcast at any given time. A third, separate signal is uplinked to the AMC-6 Ku-band satellite and received by 36-inch satellite dishes for the ground repeater network.

Satellite radio uses the 2.3 GHz S band for Digital Audio Radio (DARS) in North America and generally shares the 1.4 GHz L band with local Digital Audio Broadcasting (DAB) stations elsewhere. Local repeaters enable signals to be available even if the view of the satellite is blocked, for example, by skyscrapers.

Sirius uses 12.5 MHz of the S band between 2320 and 2332.5 MHz. XM uses 12.5 MHz between 2332.5 to 2345.0 MHz.

Both are under fire by terrestrial broadcasters and broadband wireless providers which claim their powerful satellite repeaters can push out more than 2000 watts EIRP, overpowering two-way, 2.3 GHz WCS wireless broadband radios and infringe on local broadcasting.

Satellite radio merger proponents do have a point; the business is getting more competition from mobile television (MediaFLO, Mobile WiMAX and mobile ATSC systems), internet radio (wireless and wired), terrestrial HD radio (for free) and music on-demand systems like the iPod.

But there’s a catch. Satellite radio and terrestrial HD Radio are incompatible. There’s a lock-in if you buy a satellite radio device. Terrestrial broadcasters want the FCC to require any new satellite radio receiver to also be able to receive their (free) signals.

That would be a big win for consumers - if it doesn’t raise the cost of a receiver much.