In questo parere contrario alla fusione tra XM e Sirius, il responsabile di Greater Media, impresa mediatica proprietaria di alcune stazioni radio di Boston, chiede alla FCC di fare il suo mestiere di guardiano e di non approvare il merger tra i due operatori satellitari. In subordine, la FCC viene invitata a fare in modo che il nuovo eventuale operatore, che da solo controllerà 25 MHz di banda (più di quanto hanno a disposizione le stationi AM e FM, dice Smyth con un confronto non del tutto equilibrato) e oltre 300 canali radio, non ostacoli le offerte alternative. In particolare, HD Radio. Anche Smyth appartiene alla scuola di pensiero secondo cui in caso di approvazione dell’operazione finanziaria, il nuovo operatore dovrà immettere sul mercato ricevitori compatibili con la radio satellitare e con HD Radio.
L’editoriale di Smyth è apparso sul Boston Globe.
Make satellite radio keep competing
By Peter Smyth | June 18, 2008
THE FEDERAL Communications Commission should enforce its long-standing and well-reasoned prohibition against a satellite radio monopoly that it established in 1997 when it granted the spectrum licenses to XM and Sirius. The policy underlying this prohibition – to provide an opportunity for a competitive satellite service to benefit consumers – is as valid today as it was in 1997.
Satellite radio is still relatively new, and so far there is little evidence that the competitive landscape has changed in such a way that a satellite monopoly is justified. Having two satellite radio providers has kept subscription rates competitive (it is not surprising that their rates are virtually identical) and encouraged each operator to provide diverse program offerings.
Permitting XM and Sirius to merge would undermine the FCC’s laudable regulatory objectives. Think about it: One company would control 25 megahertz of spectrum. This is more than the entire AM and FM terrestrial radio bands combined. In addition, one licensee would be able to air more than 300 channels in every market – 40 times more channels than terrestrial radio broadcasters are permitted to control in the largest markets.
With 300 channels, the monopoly company could use some of its channels to provide local programming aimed at specific large markets, competing directly with terrestrial radio but not on a level playing field. Last year when Greater Media purchased a sixth FM station in Boston, we had to sell a station we already owned to comply with the FCC’s ownership limitations.
The Department of Justice’s conclusion about the “market” in which XM and Sirius compete directly contradicts the FCC’s recent decision not to relax its broadcast local ownership caps. The Department of Justice concluded that XM and Sirius compete for listeners with traditional AM/FM radio, HD radio, iPods, and cellphones. The FCC, on the other hand, found that these alternatives were not good substitutes for listening to radio. If the Justice Department is right that there is broad competition for listeners, then the FCC should relax the multiple ownership rules and permit companies to own more than a handful of stations in any given market. If the FCC is correct, then the merger must be denied since it would indisputably create a monopoly in the satellite radio market.
In any event, if the FCC permits XM and Sirius to merge, it should ensure that satellite subscribers are not discouraged from sampling other audio services, including HD radio. The radio industry is at a critical juncture with respect to the implementation of HD radio. We have spent millions of dollars to convert to digital. Consumer awareness is growing, but the number of HD receivers in use is still low.
To support broadcasters’ efforts to convert to HD and help provide a relatively level playing field, the FCC should require XM and Sirius to subsidize or license receiving equipment only if it includes HD tuners and allows users to switch easily between the satellite and AM/FM bands.
XM and Sirius failed to comply with the equipment interoperability requirement the FCC imposed in 1997 and, in fact, the Department of Justice ironically relied on this lack of compliance to support its conclusion that XM and Sirius do not currently compete with each other. Therefore, failure to comply with the HD compatibility requirement should result in the forfeiture of some of the merged satellite company’s spectrum.
These companies have a long history of ignoring the dictates of the FCC. The principles of a fair market demand that the FCC no longer allow that to happen.
Peter Smyth is president and CEO of Greater Media Inc.
