XM Could Localize Mobile Multimedia with New WCS Spectrum; NAB Not Pleased

XM wants to use its new spectrum to get in on what other major communications companies like Cingular, Verizon, Sprint and Qualcomm are pursuing -- mobile media, including video clips, local weather, music, sports and other data services. With the WCS Wireless purchase, XM gained 10 MHz of spectrum covering over 1/2 the U.S. population that could be used to do that. The move had analysts speculating on how XM could use the spectrum to “localize” its content with audio tailored for specific markets (CD July 15 p3), noting that broadcasters are likely to fight the idea.

The NAB had a response 24 hours later. In a July 15 letter to Congress, the NAB argued satellite radio is trying to get around the terms of its national-only licenses. XM’s WCS Wireless acquisition “is part of a longstanding pattern of deception by the satellite radio industry,” said the NAB: “When the FCC licensed satellite radio, it intended a national radio service that would supplement, not detract from, the important services of free, local radio. [The WCS Wireless] announcement is further proof that the satellite industry has no intention of abiding by the terms of their licensure.”

The NAB letter also called representatives’ attention to legislation sponsored by Reps. Pickering (R-Miss.) and Green (D-Tex.) on the issue. Their bill would “address the WCS acquisition by clarifying that satellite companies are not to use future technologies for localized content,” said the NAB: It would also “codify the original agreement that precludes satellite radio companies from inserting local content on ground-based repeaters” and “instruct the FCC to examine the legality of putting local content onto nationally distributed channels.” The same bill was introduced in the 108th Congress.

XM countered Thurs. with its own letter to legislators saying that the NAB is trying to “stifle competition” by discrediting the multimedia services XM has said it will launch in the WCS spectrum “before they are even offered.” Satellite radio officials argued the NAB is using XM’s latest move as further ammunition in its battle on the Hill to reign in satellite radio. Said XM: “The NAB is renew[ing] its efforts to hobble XM through anti-competitive advocacy.”

XM’s chief argument is that its proposed multimedia services will make use of different spectrum licenses -- those purchased from WCS Wireless. And while the spectrum may be immediately adjacent to XM’s satellite spectrum, it is completely different spectrum with completely different service rules.

XM’s satellite radio license allows it to provide content of local interest over its entire satellite/terrestrial repeater system, but precludes it from transmitting local content exclusively on its terrestrial repeater network. XM’s local traffic, weather, Amber Alerts, and emergency information are offered on 21 channels delivered to all subscribers.

But as long as XM keeps its satellites out of the content delivery equation, the WCS Wireless spectrum doesn’t come with those rules. In fact, the WCS spectrum comes with “perhaps the most flexible service rules ever adopted for any spectrum allocation,” said XM. WCS Wireless had long planned to provide mobile media services in the band, XM officials said. “The only difference now,” said a satellite radio official, “Is that the XM brand is going to be on it.”

“All that is necessary is an entrepreneur to provide vision, resources, and capital to make this happen,” said XM’s letter: “There is nothing prohibiting broadcasters from purchasing similar licenses or offering similar services.”