Smyth: If FCC OKs Sat Merger, It Should OK More Consolidation
May 8, 2008 at 10:15 AM (PT)
In his latest "From The Corner Office" blog on GREATER MEDIA's website, CEO PETER SMYTH cited several different angles to terrestrial radio's attack on a possible XM/SIRIUS merger. For one, SMYTHE asserted that a merged satellite entity would have 300 channels at its disposal--and it apparently couldn't help itself but break FCC rules and offer local programming
"With 300 channels, there is absolutely no reason the monopoly company could not or would not use some of its channels to provide local programming aimed at specific large markets, competing directly with terrestrial radio but not on a level playing field," he wrote. "Last year when GREATER MEDIA purchased a sixth FM station in BOSTON, we had to sell a station we already owned to be sure we complied with the FCC’s ownership limitations. The inconsistency is mind-boggling."
Therein lies SMYTH's main bone of contention: If the FCC allows the satcasters so many channels to "flood" its markets, it should have the opportunity to have larger station clusters. "The DEPARTMENT OF JUSTICE concluded that XM and SIRIUS compete for listeners with traditional AM/FM radio, HD radio, iPODS and cell phones. The FCC, on the other hand, found that these alternatives were not good substitutes for listening to radio. If DOJ is right that there is broad competition for listeners, then the FCC should relax the multiple ownership rules and permit companies to own more than a handful of stations in any given market. If the FCC is correct, then the merger must be denied since it would indisputably create a monopoly in the satellite radio market."
What's more, SMYTH demanded that the FCC force the a merged satcaster to support the fledgling HD radio business. "The radio industry is at a critical juncture right now with respect to the implementation of HD radio," he wrote. "We have spent millions of dollars to convert to digital. Consumer awareness is growing, but the number of HD receivers in use is still low ... To support broadcasters’ efforts to convert to HD and help provide a relatively level playing field, if the FCC permits XM and Sirius to merge, it should require the new company to subsidize or license receiving equipment only if it includes HD tuners and allows users to switch easily between the satellite and AM/FM Bands."
Read the entire column here.