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NAB President/CEO Fritts Responds To XM-WCS Deal
In response to the story about XM Satellite Radio’s plans to acquire WCS wireless, NAB President/CEO Eddie Fritts had the following to say in a letter to the US House of Representatives.
July 14, 2005
U.S. House of Representatives
Washington, DC 20515
Dear Representative:
There satellite radio goes again! Despite the fact that 65 of your colleagues have cosponsored legislation (H.R. 998) aimed at keeping satellite radio companies from circumventing the terms of their national-only licenses with local content, satellite radio has proven once again they simply cannot be trusted.
Yesterday, XM Satellite Radio announced plans to acquire WCS Wireless, a company whose assets consist principally of 10 MHz spectrum licenses spread throughout the nation and covering over half of the U.S. population. Today’s Wall Street Journal characterized the transaction as “a move to expand and localize programming.”
The proposed transaction is part of a longstanding pattern of deception by the satellite radio industry. In 2003, while publicly claiming it had no plans to insert local content on its network of terrestrial repeaters, XM spent months seeking a patent for technology to do just that. In December of 2003, the company finally relented and signed an agreement saying that the repeaters would not be used for local content. Just a few weeks later, XM Satellite Radio announced that it would offer local programming by earmarking some of its national channels for localized traffic and weather information. In February of 2004, the other satellite radio provider, Sirius, followed suit with its own localized content plans.
In March of this year, The New York Times reported, that Sirius Satellite Radio CEO Mel Karmazin, “told a gathering of Wall Street analysts in Florida that Sirius might run various local feeds of Stern's show in such cities as Los Angeles and New York, whereby local weather and contests might be featured, in order to lure local advertisers.”
When the FCC licensed satellite radio, it intended a national radio service that would supplement, not detract from, the important services of free, local radio. Yesterday’s announcement is further proof that the satellite industry has no intention of abiding by the terms of their licensure.
Two prominent Members of the House Telecommunications Subcommittee, Representatives Chip Pickering and Gene Green are promoting bipartisan legislation to address this issue. Their bill would codify the original agreement that precludes satellite radio companies from inserting local content on ground-based repeaters. It would instruct the FCC to examine the legality of putting local content on nationally distributed channels. Finally, the measure would address the WCS acquisition by clarifying that satellite companies are not to use future technologies for localized content.
Local radio broadcasters live by the terms of our FCC granted licenses. While a national satellite radio service may indeed offer worthwhile niche programming to a limited segment of the population, no company should be permitted to disregard the terms of their licenses. On behalf of your hometown radio stations, I urge you to join your colleagues in cosponsoring H.R. 998 and help keep the satellite industry to its word.
Sincerely,
Eddie Fritts
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