After a mere 17 months of bureaucratic dawdling and foot-shuffling, the FCC Friday night finally approved the merger of satellite radio companies XM and Sirius. Attached was the typical bundle of government-imposed "consumer interest" requirements, mostly drawn from some alternate Washington universe where the laws of economics do not apply and listeners have an unquenchable thirst for tedium.
The most absurd was requiring the two companies to set aside 8 percent of their channels for "non-commercial programming." I'm not sure what that even means in the context of satellite radio, where only a handful of the channels -- all of them pickups of conventional terrestrial RM stations -- carry advertising. Sirius already has three channels of NPR programming; XM's Public Radio Channel runs popular shows other public broadcasters, including Prairie Home Companion, This American Life, and even an original program hosted by NPR castoff Bob Edwards. XM also has a channel for CSPAN Radio, and both companies have the BBC. Add in dozens of channels featuring local traffic and weather reports, classical music, and other niche programming that's increasing difficult to support on commercial radio, and it's hard to see what conceivable public-service market is not already being served on satellite radio.
Almost as dumb as the programming demands were the economic measures imposed by the FCC. Freezing satellite-radio prices for three years may get the commission lots of style points with consumer activists, but price increases in this economy were unlikely anyway, especially when new car sales -- the main gateway into satellite radio for new customers -- are plummeting.
Equally trivial from a consumer standpoint is the FCC's demand for a la carte channel selection -- that is, allowing customers to pay for only the channels they want to receive, rather than requiring them to take the whole lineup. A la carte is a big deal in cable television, where monthly bills can easily top $100, but it's simply not an issue in satellite radio, where lopping off half the XM lineup would probably save a costumer only a dollar or two a month. (The political component of the demand for a la carte in cable television -- the rage that some parents feel over being forced to subsidize smutty networks like MTV that they don't even want their kids to watch in the first place -- is completely absent from satellite radio. The channels that carry shock-jocks like Howard Stern aren't part of the regular lineup and have to be purchased separately.)
Far from being able to impose its economic whims on powerless listeners, the new XM/Sirius is going to have to scramble to find ways to hold onto them. Satellite technology, which just a few years ago looked like the future of radio, now seems stodgy and even quaint. Listeners can now stream broadband radio signals through a host of devices, from cell phones to iPods. Last month AOL struck a deal to stream the signals of 150 CBS stations through its new radio player. Most industry analysts think broadband is now the wave of the radio future.
Of course, analysts have been wrong before. The history of broadcasting is littered with technologies like AM stereo that failed to fulfill their supposedly spectacular promise. Sounding the demise of satellite radio (much less conventional AM and FM broadcasting, another target of the doomsayers) is way premature. But the cross-breeding of radio, television and telecommunications is spawning new life forms every day. Satellite radio is far from the mightiest. It's too bad it took the FCC 17 months to figure that out.