Sirius/XM Merger: What Is 'Noncommercial' Satellite Radio Programming?

The XM-Sirius merger took another step towards actually happening today, when FCC Chairman Kevin Martin said he'd support it. The AP reports:

 

The deal affects millions of subscribers who pay to hear music, news, sports and talk programming, largely free from advertising, in homes and vehicles...
The thorniest part of the negotiations was over how much radio spectrum the companies would turn over to noncommercial and minority broadcasters.

 

"Noncommercial", in this context, clearly doesn't mean advertising-free, since that would apply to nearly all of the programming. And it doesn't mean programming which is available without a subscription, either: you'll need to pay to listen to anything on satellite radio. It doesn't even mean diverse programming: the whole satellite radio business model is based on the idea of providing a vast range of options to subscribers, thereby maximizing the number of people you're potentially appealing to.

Alex Kanous explains that "noncommercial", in this context, means something between high-minded and low-impact:

 

Public Knowledge has insisted that the proposed merger be conditioned on the new company providing 5% of their spectrum capacity to non-commercial programmers, like public educational broadcasters, non-profit educational institutions, and local low-power radio stations.

 

There's something slightly absurd about the idea of taking a local low-power radio station and broadcasting it nationally: either no one would listen to it on satellite and there would be no point to the exercise, or else people would listen to it on satellite and the station would cease to be either local or low-power.

As for the educational broadcasters, does that mean student radio? I'm sure neither Sirius nor XM would mind having a few student radio stations on their list, given the millions of people who listen to student radio nationwide; I can't imagine that negotiations there would be particularly thorny. On the other hand, if it's some kind of course-specific programming that Kanous has in mind, one does have to wonder just how much benefit it would have, given the fact that you need to pay for a satellite radio subscription in order to listen to it, and given the fact that there's going to be a finite number of these stations.

My suspicion is that the whole debate over noncommercial programming is really a fig-leaf for the FCC to use in order to justify allowing the merger to go through. But that wouldn't explain why it became such a thorny part of the negotiations. So what's really going on here?

Comments

[scooter_smd]

I think the point is that Siri/XM is showing a sign of 'good faith' that they are giving up a portion of the spectrum. Who knows what it'll actually be used for, but at least it's there just in case. It's about time for a decision to be made on this merger either way.

[timemachine]

The FCC has blocked this merger for too long. Don't they realize it's one... or none! These two companies cannot continue to exist separately. Merger is the only answer.

[frankz00]

A better question what the hell is "minority programming". Sirius has the Jamie Foxx Channel and about 10 R & B and Hip Hop stations. That requirement is technically already satisfied. What they're really talking is those stupid Jesse Jackson channels that no black people ever listen to anyway.

[RKoo]

As usual, government regulators are fighting the last war. Satellite radio will remain a niche market at best. Not sure how the company can afford to replace its satellite in the future. MP3 in cars has taken over. This is just like some landline telephone merger in the 90's that people objected to (was it between Sprint and something else?) It was so irrelevant as it was clear that landline telephone business was in permanent decline. Despite the opposition to that telephone merger, we have only 3.5 (Verizon, ATT, Spring, Quest) large landline telephone companies. I guess we can't expect the government to be future oriented.

[oregonduck]

Lawyers finally finished their stuff and Martin can finally go public. He can't back off now. I think it will now be a 3-2 or 4-1 vote. The only delay may be a Congressional hearing, but that can be avoided if the FCC just approves it without a public meeting, which it can do. Congress cannot overrule the FCC on this. They can just complain. It sounds like the conditions are what Sirius agreed to. There will be a run up in price, so I bought 20,000 shares on margin this morning on the slight dip after the 15 cent run up for 2.61. Here's to making some money!!

[User 168418]

THE DEAL SOUNDS SWEET AS APPLE PIE.............CANT WAIT TO GET MY SLICE!!!!

[User 168418]

SEAL THE DEAL!!!! MARTIN AND MEL

[BerkeleyBob]

I bailed on Sirius stock long ago, remain a subscriber. Don't know what the FCC is thinking, the real beaf is that historically, terrrestial radio got the right to broadcast without performance royalty. The record industry has been busy lobbying and jerking around internet radio (not feasible for cars). Don't think MP-3 is preferable to satellite and I remain willing to pay for commercial free music.

[muley101]

I think the number was 8%, not 5%. maybe channels like NPR that are already being broadcasted will count in that number, so the impact may not be as great. Mel should also hold out the right to cancel channels with less than say 10% subscription by a la catre subscribers.

After the merger, X/S should immediately offer a 3 year pay-up-front subscription, with a multiple set option, to get new subscribers and cash now. I would get 4-5 for my cars, home, and cabin.

[OH NO!]

Damn government, next they will censor what you can hear and see. Maybe some day someone will start a Radio Free Americas like we did for the Communist countries!