This is Celia Hirschman with On the Beat for KCRW.
Over a decade ago, the Federal Communications Commission, or FCC, agreed to license the right to broadcast through the satellite radio medium. They did this under the condition the service would provide a distinct nationwide perspective that local radio inherently could not. To insure that a monopoly would never exist, the FCC implemented a duopoly market structure, insisting that each company had no interest in the other, and prohibiting both companies from ever merging. Ironically, the FCC took this action at the insistence of Sirius satellite radio. Sirius argued that such limitations were necessary to preserve competition, the diversity of programming and to prevent a monopoly.
Things certainly have changed. Not only do XM and Sirius both have local traffic and local weather channels, but on November 13, the stockholders for each company will separately vote on a decision of whether to merge. If they agree to merge, Sirius and XM will then be required to seek approval from the FCC and the Department of Justice.
And though the FCC had originally said the two satellite operators couldn't merge, the companies argued that radio has greater competition now, from portable music players, from the Internet and from other media.
Let’s face facts. The only reason XM and Sirius want to merge now is because both companies have spent a fortune buying celebrity radio voices. They have huge debt. But if they can’t make money on their own, it’s an unsustainable business model.
Last week, the US Senate Committee on Commerce, Science and Transportation held hearings in Washington on "The Future of Radio."
The hearings were the committee's attempt to open dialogue after the Congressional backlash caused by the Copyright Royalty Board's sizeably increase in Internet royalty rates. Speakers on the Hill included Mac McCaughan, the owner of North Carolina's Merge Records. The independent record label is most well known for releasing music from bands like Spoon and Arcade Fire.
These bands do not receive a lot of commercial radio airplay, yet they were both on Billboard's Top 10 sales chart this year.
McCaughan spoke of the cultural imperative of non commercial radio, citing KCRW by name as one of several stations who were vital in exposing his bands' music to large audiences. Local radio provides the necessary link for many listeners to connect to new sounds, new perspectives and new ideas.
Satellite radio can provide that too, in its own way. But without competition, there's really no incentive to innovate and create. Have we not learned from the 1996 Telecommunications Act that a monopoly of media ownership shortchanges the public every time? Why should satellite radio be given a free pass on the rules and regs that govern the rest of radio? Why should we allow them to become one voice for the entire satellite medium? Let’s not let greed and stockholders share prices determine the quality and integrity of our airwaves.
This is Celia Hirschman with On the Beat for KCRW.