Late yesterday afternoon, the Wall Street Journal reported that the commissioners for the Federal Communications Commission has tentatively given their blessing to the merger of Sirius and XM Radio, the two satellite radio services who have been competing for customers for the past few years. The merger will allow the two former competitors to combine their broadcasting services and allow for one format in which to receive the satellite radio signals.
One FCC commissioner, Deborah Taylor Tate from Tennessee, is expected to cast the deciding swing vote in favor of the merger. However, it was Tate who helped hold up the merger for a long time as she pushed for concessions from Sirius and XM Radio to provide programming for educational and minority groups, and to impose fines on the two services for excessive power output from repeater towers the two satellite radio providers use to extend their signal. It appears XM Radio will pay $17.5 million in fines, while Sirius will pay $2.5 million for exceeding the power limits set forth by the FCC.
This will mean that audio manufacturers will be able to make one receiver for one format for home tuners. Car manufacturers will be able to focus on just one service, rather than picking one or the other for their car radios and hoping their customers like that given provider. There will be ala carte programming available to subscribers that will allow them to choose 50, 100 or unlimited stations in the system.
To people like me who didn't get either XM Radio or Sirius, mainly because I couldn't make up my mind which service I wanted, this is a glorious day. However, not everyone is on board with the merger. Most notably, the National Association of Broadcasters is not too happy with the merger.
The NAB has been lobbying against this from the start, saying that it inhibits growth of local broadcasters and creates a monopoly for radio. Sirius and XM Radio have long said their services are just one of the plethora of entertainment options available to people and the merger will allow them to compete against these growing options. One thing the NAB lobbied for was to allow local radio stations to provide their digital channels on the local satellite repeater systems. The FCC didn't see it that way and didn't stipulate the merging companies had to provide for local broadcasting content.
Radley Balko at Reason.com wrote an in depth analysis last year of why the NAB doesn't want the merger to go through. You can view the article here. It's a pretty interesting article about the politics of a large lobbying group and the threat to local stations the organization sees in regard of the merger of Sirius and XM Radio. I'm guessing that even though the merger is about to get stamped as complete, the NAB will be fighting it for years to come.
Still, with the aspect of future competition with video and audio being available just about anywhere through the developing WiMAX technology, satellite radio should be the least of the NAB's worries. Like newspapers, local radio and television stations need to become more competitive in today's digital world. When WiMAX technology becomes affordable enough to allow for personal viewing devices or notebooks to receive the signal virtually anywhere, the staid old franchises of local broadcasting could be left in the dust. The NAB and their constituents must realize that technology has passed them by and is on the verge of burying them if they don't get their heads out of their asses.
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