Satellite radio under attack at LV NAB convention

Kevin Rademacher

Tuesday, April 20, 2004 | 11:12 a.m.

The National Association of Broadcasters convention is shaping up to be the site for an escalation of a feud between traditional over-the-air radio broadcasters and subscription satellite radio providers.

NAB Chief Executive Eddie Fritts, speaking at the convention's opening ceremony Monday, ripped satellite providers for an "obvious violation" of Federal Communication Commission rules.

Fritts said satellite radio providers XM Satellite Radio and Sirius Satellite Radio were barred from distributing local programming when the FCC licensed the companies in 1999. Now, he said, those companies are providing local weather and traffic reports to major markets.

"We believe this directly contradicts FCC rules, under which satellite was licensed as a national service," Fritts told a crowd gathered at the Las Vegas convention.

Satellite providers dispute that notion.

XM currently provides 21 channels of local traffic and weather, said Chance Patterson, an XM spokesman. Sirius has 20 similar channels, the company's Web site said.

Patterson added that the company also uses those stations to broadcast Amber Alert announcements for missing children. He said, however, that all of those channels are broadcast nationwide.

"The FCC ruled that everything we broadcast must be delivered via our satellite," he said. "That's the rule. In Las Vegas, you can listen to traffic reports for New York ... They have inaccurate information on the FCC rules."

Neither service, however, currently provides weather or traffic information for the Las Vegas area.

Patterson said that broadcasters had previously criticized satellite radio for lacking local content. Now, the same broadcasters are challenging the efforts of the company to add more local information.

"What the NAB is trying to do is restrict information that is a public service," he said. "Here comes the NAB trying to restrict content ... That's a constitutional issue. The bottom line is that we have followed the FCC rules."

XM reports having nearly 1.7 million subscribers who pay $9.95 a month for service. Sirius said it expects to have 1 million subscribers by the end of the year paying $12.95 monthly for service.

In his speech, Fritts was clear that the NAB will continue to position its members as the nation's leading local broadcast outlets.

"My friends, broadcasting serves a public purpose, a greater good, but I cannot convey to you the constant vigilance we must keep," he said.

Key to the dispute between over-the-air broadcasters and satellite providers is localism. Those traditional broadcasters are required to deliver community-based services. Fritts pointed out that local broadcasters (both television and radio) provide nearly $10 billion worth of public service advertising announcements each year. No such rules guide satellite radio's foray into local programming.

Last week the NAB filed a petition with the FCC asking for a ruling on satellite radio's local content. In that petition, the NAB also expressed concern that the satellite radio companies are developing ground-based transmitters that would allow local content inserted in existing feed making the service "indistinguishable from local radio."

The NAB also has approached Congress for relief from the satellite challenge, but on Monday Rep. Joe Barton, R-Texas, told broadcasters a pending bill on the matter could be slow in coming.

"I would just encourage you not to assume that this bill is going to move on its own," he said.