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Satellite radio got its start in 1997 when American Mobile Radio Corporation (the predecessor of XM Radio) paid $89,888,888, and Satellite CD Radio (the predecessor of Sirius Radio) paid $83,346,000, as the winning bids in an auction to operate a digital audio radio service in the 2320 to 2345 MHz spectrum band. The companies planned to use state-of-the-art satellite technology to provide CD-quality music and information to a nationwide audience.
As a condition for authorization to use terrestrial repeaters, the licensees agreed not to use them for locally originated programming that was not also carried on their satellites or to seek local advertising revenue. In 2002, shortly after satellite radio’s debut, the service was seen as a niche offering that would serve long-distance truckers and music aficionados but not threaten the existing radio market. Soon, though, XM Satellite Radio began to install hundreds of terrestrial radio repeaters that could enable it to transmit local programming to local subscribers, raising fears in the radio industry that XM’s intention was to become more than a national service.
When XM and Sirius merged in 2008, at the request of the broadcasters, the FCC reaffirmed the prohibition on satellite radio offering locally originated programming and seeking local advertising revenue. After years of losing subscribers and revenues, satellite radio appears to be in stronger shape: In 2010, Sirius XM subscriptions grew 7.5% to 20 million and revenues rose 12% to $2.8 billion. Increased public awareness of satellite radio may explain the turnaround.
How it works Edit
A company broadcasts audio content to consumers from dedicated satellites orbiting over the United States, in the form of “channels” that offer a variety of digital-quality music, sports, traffic, weather, and talk radio programming. Combined, these two companies provide satellite radio service to more than 11 million subscribers in the United States.
To listen to these broadcasts, a customer pays a monthly subscription fee to the company and uses a satellite radio receiver — a special audio device manufactured by various consumer electronics companies. Satellite radio receivers are available in different configurations for various listening environments (e.g., car, home stereo, and portable hand-held device).
- ↑ See FCC Announces Auction Winners for Digital Audio Radio Service, Public Notice, DA 97-656, 12 FCC Rcd 18727 (1997).
- ↑ See American Mobile Radio Corporation Application for Authority to Construct, Launch, and Operate Two Satellites in the Satellite Digital Audio Radio Service, Order and Authorization, 13 FCC Rcd 8829 (IB 1997).
- ↑ Establishment of Rules and Policies for the Digital Audio Radio Satellite Service in the 2310–2360 MHz Frequency Band, Report and Order, Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, 12 FCC Rcd 5754, 5812 (1997); see also Amendment of Part 27 of the Commission’s Rules to Govern the Operation of Wireless Communications Services in the 2.3 GHz Band, Notice of Proposed Rulemaking and Second Further Notice of Proposed Rulemaking, 22 FCC Rcd 22123, 22141 (2007).
- ↑ Application for Consent to Transfer of Control of Licenses, XM Satellite Radio to Sirius Satellite Radio, Memorandum Opinion and Order, 23 FCC Rcd 12348, 12419–20 (2008). See also 47 C.F.R. § 25.144(e)(4), (5); Amendment of Part 27 of the Commission’s Rules to Govern Operation of Wireless Communications Services in the 2.3 GHz Band, Report and Order and Second Report and Order, 25 FCC Rcd 11710, 11825–26 (2010).
- ↑ “Audio: Satellite Radio Gains in 2010” in Pew, State of News Media 2011.
- ↑ Id.
- Information Needs of Communities, at 68.