Normally I like XM and Sirius just fine. But this rather sad attempt to claim they complied with the terms of their license by designing interoperable radios, but not producing them, makes me laugh.
Normally, I wouldn’t care (much) if XM and Sirius want to go all anticompetitive against each other or if the FCC lets them. But with a Senate bill pending to cut off satellite radio’s traffic and weather service, I’m not sure I’d pick this moment to look like I’m flouting the law. But hey, what do I know?
Annoyingly, the lengthy post I wrote explaining the above deleted itself as I was positing it. As this occured Friday right before Shabbos started, I did not get a chance to do anything about it until now.
So I will expand very briefly and think evil thoughts about modern technology.
In 1997, the FCC sold two licenses at auction for satellite radio. They got bought by XM and Sirius. As a license condition, the FCC required the companies to develop a radio that could get both pay services. Why? Because back in ancient times, when democrats walked the Earth, the FCC cared about facilitating competition instead of treating competition as something that happened automaticly when you deregulated. (I swear, I think the Republicans believe that if you pullout a regulation and leave it under your pillow, the competition fairy will come at night and bring lots of competition.)
How does designing an interoperable radio facilitate competition? Because if I spend a lot of money on a new satellite radio to see if I prefer XM over Sirius, or vice versa, I will never try it. But if I can switch back and forth on the same piece of equipment, I am more likely to try it.
Unsurprisingly, both companies hate the idea of helping their subscribers switch pay services. Even though Siruius still lags behind in subscribers, there are enough new subscribers out there that they can hope to catch up. Certainly they don’t want people to try their service, then easily switch to XM (and XM feels the same way). So the parties have no incentive to actually make such a radio.
So when XM and Sirius told the FCC they had complied with the license condition to “design” an interoperable radio, they also explained they had no intention to actually produce such a radio, because the license just says “design” not “produce.”
If the FCC cared, it would go “Ha, ha. Very funny. And Shylock can get his pound of flesh, but cannot spill a drop of blood. Ho ho. Did your lawyers get their degrees online? You know what the intent of the condition is. Now start producing the radios or provide us the design and we’ll open source that puppy.” But odds are good the FCC doesn’t care. Because the Republicans aren’t into facilitating competition by making it easier for consumers to switch. They favor the “give incumbents what they ask for” approach, which has ushered in an era of endless competition in the last six years. And as no one else has authority to force the companies to comply with the license terms, FCC sign off settles the matter.
A happy ending for satellite radio? Perhaps, but perhaps not. See, there is more than one set of incumbents out there. Regular “terrestrial” radio has been losing customers for the last few years — ever since they started consolidating and squeezing all the local juice out of radio broadcasting. As a matter of competition, this should force the radio guys to improve service, refocus on localism, hire local news crews, showcase local bands, etc.
But the Republicans, who believe competition happens when you gie incumbents what they ask for, also control Congress. So the National Associaion of Broadcasters (which represents terrestrial radio guys) has gone to Congress to ask them for a law that prevents satellite radio from offering local content –particularly traffic and weather. Why? Because one of the major reasons people still listen to terrestrial radio is for traffic and weather. Satellite radio already offers dedicated traffic and weather channels for major urban markets, and has the technological capacity to insert local content via their terrestrial repeaters.
Satellite radio argues that if the Republicans really beleive in competition, then they shouldn’t create regulatory barriers to protect incumbents. I happen to agree. But it seems to me it’s a lot harder to make that argument when you are ding your best to kill competition that might hurt you through a hypertechnical reading of your license. I expect the NAB to respond “Sure, you guys are all for competition, except with each other. Why don’t you compete against each other before you come poaching our customers.”
But what do I know? I don’t believe in the competition fairy.
Stay tuned . . .