Broadcast Lobby Fighting Satellite Radio

I haven't listened to FM radio in years. With a few exceptions, the artists I enjoy don't get airplay. If your taste in music runs deeper than Fred Durst, Kid Rock, or Jessica Simpson, you've probably experienced the same thing.

Last Christmas, someone bought me a receiver and a subscription to XM satellite radio. I now listen to radio again.

XM offers about a hundred stations, covering every genre of music you can imagine. There's a station called "Hank's Place," which plays only authentic 1950s-era country music. There's also "Frank's Place," which plays only Sinatra-ish standards. There are several jazz channels, a live channel, an acoustic channel, and a channel for unsigned bands. There are two channels of soul, three channels of Christian rock, two channels of thrash-speed metal, and nearly everything in between.

There's a comedy channel that plays stand-up snippets from Lenny Bruce, George Carlin and Richard Pryor; and another that plays more family-friendly bits. There are news, family and talk channels, and audio feeds from about a dozen cable television networks, including Fox News.

In short, XM is everything FM radio could be, but isn't. And so, predictably, FM radio interests are doing everything they can to keep XM at bay.

Traditional (sometimes called "terrestrial") FM radio stations are represented in Washington, D.C. by the National Association of Broadcasters (NAB), one of the oldest, most powerful, most entrenched lobbying organizations around. NAB has wielded that power at the expense of technology, innovation, and — ultimately — consumers.

NAB fought cable television through every stage of its development, meaning that if the NAB had its way, you'd have no FOX News, no Comedy Central, and no HBO. Just the big three networks. NAB failed there. But as Jesse Walker has documented in Reason magazine and in his book Rebels on the Air, the organization has for decades fought and succeeded in snuffing out similar efforts in radio. It's most notable victory came over the licensing of low-fi radio stations, which would have given thousands of amateurs, low-budget operators and undiscovered talent access to the airwaves.

More recently, traditional broadcasters were given huge swaths of spectrum (the invisible grid over which radio, TV, and cellular signals travel) for the development of High Definition TV — for free. Most everyone else who wants a slice of spectrum is required to pay for it. Yet broadcasters got theirs for free, leaving those interests pursuing similar technology (wi-fi and cellular providers, to name two) to fight for the scraps. It's hard to say exactly what innovations and technology that grant may have quashed. We'll never know because they were never given the chance to develop.

Which brings us to the NAB's latest fight — against satellite radio. About a decade ago, XM and Sirius approached the FCC to bid on satellite spectrum. Wary of the NAB and its Washington chest-thumping prowess, XM agreed that in exchange for a slice of spectrum, it would not offer the kind of localized programming that would put it in direct competition with terrestrial broadcasters.

Put another way, XM subscribers in Los Angeles would hear the same stuff as XM subscribers in Portland, Dallas, or Poughkeepsie. With a titan like NAB standing in the door, this gentleman's agreement was really the only way an upstart like XM could have gotten into the game.

Fast forward 10 years. Today, XM and Sirius have finally caught fire. Both have subscribers that number well into the millions, most of them disaffected refugees from FM radio. And both companies now want to offer localized content. XM wants to give customers in major metropolitan areas instant traffic and weather reports. Sirius is offering audio feeds of NFL games, and may delve into traffic and weather as well.

As you might guess, the National Association of Broadcasters will have none of it.

NAB's position is a precarious one. Satellite radio has taken off because traditional broadcast radio is so darned dreadful. That means the NAB is forced to argue that the government must prevent satellite providers from offering localized programming because allowing them to do so might drive local broadcasters out of business. But at the same time, NAB must argue that the service local broadcasters currently provide is of high enough quality to merit that kind of protection in the first place. It's an absurd case on its face. If FM and AM radio broadcasters were really giving consumers worthwhile local content, they wouldn't need government protection from XM and Sirius.

Even odder, just as NAB is fighting XM and Sirius over local content, many of the stations NAB represents are turning away from localized programming, running cheaper, syndicated content from parent companies like ClearChannel and Infinity.

I've asked representatives of NAB how using the power of the FCC to keep out competitors could possibly benefit radio consumers. They always respond the same way. "That's not the issue," they say, "the issue is that XM is backing down from its agreement." Perhaps. But it's awfully telling that they won't even address the real question.

The fight is a classic case of what economists call "regulatory capture" — when an industry that's regulated by a government agency attempts to use that very agency and those regulations to keep upstarts and competitors at bay. And it's almost always to the detriment of consumers.

The good news is that it looks likes NAB is going to lose this time. XM has already begun offering traffic and weather, pending action by Congress and/or the FCC. And more local programming may be on the way. That may drive a few traditional radio stations out of business. But it will also ensure that those that survive will do a better job of giving you the kind of programming you want.

Which is sort of the whole point of a free market.

Radley Balko publishes a weblog at:

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