The Strange Case of Satellite Radio

[SOURCE:Center for American Progress, AUTHOR: Mark Lloyd]
[Commentary] So just what is satellite radio? Why can it air Opie and Stern without risk of being fined by the FCC? First, for many Americans satellite radio is not delivered to them directly via satellite. It is true that signals are bounced off satellites , but “satellite” radio is made possible by local broadcast transmitters, what the FCC calls “repeaters.” In other words, this is a national system that combines satellite and earth-based transmitters—a system not entirely different than what Infinity or Clear Channel used to broadcast The Howard Stern Show from New York City to Johnnie’s disgruntled parents home in Houston, Texas. But the FCC does not consider Satellite Digital Audio Radio Service (SDARS) a broadcast service, and so SDARS operators are not subject to broadcast regulations, such as the prohibitions against indecent speech. Although SDARS systems do utilize localized terrestrial transmitters to amplify their signal and fill gaps in satellite coverage, the authority for use of these terrestrial repeater networks is temporary, and SDARS operators are prohibited from originating programming at their terrestrial repeaters. The FCC does not mean by this that broadcast licenses are, by contrast, permanent. Nor does the FCC mean that the local XM and SIRIUS transmitters are prohibited from carrying local programming. Indeed, XM and SIRIUS carry local weather and traffic reports in major markets. It’s just that those reports must be made available nationally. So while SIRIUS can boast offering “original programming — not recycled radio,” the FCC rules are designed to discourage SDARS operators from offering local communities local programming, such as an original report on a local town meeting. So while it is true that Stern can utter obscenities on XM, it is not true that the FCC does not regulate speech on satellite radio. The rationale behind the FCC’s strangely anti-democratic disincentive against local speech is to protect the core revenue base of broadcast radio ­ local advertising. And local advertising is sold because local broadcast stations target local audiences. But the combination of radio consolidation and competition for local viewers from national services like satellite radio create disincentives for local radio stations to produce local programming to attract local advertisers. Well-produced national satellite-syndicated news, weather and entertainment programs are much cheaper to broadcast than original local programs, such as a local town meeting. And, despite what the broadcast industry calls onerous public interest obligations, the increasing syndication of national programming such as Rush Limbaugh or Air America on local broadcast radio is also fine with the FCC.
http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=1416697