mr rehr strikes again

[tankedsecondchance]

October 23, 2006

The Honorable Kevin J. Martin

Chairman

Federal Communications Commission

445 12th Street, SW

Washington, DC 20554

Dear Mr. Chairman:

NAB continues to be troubled by the privileged regulatory position that satellite radio enjoys

under the Commission’s rules, as compared to free over-the-air radio service. This disparate

treatment seems increasingly unwarranted given the expanding delivery of complimentary

satellite radio services to nonsubscribers, including persons who object to receiving sexually

explicit and profane satellite radio content.

On October 11, 2006, XM Satellite Radio and Acura announced the first complimentary satellite

radio service program for certified pre-owned vehicles. Certified pre-owned Acura models will

include factory-installed XM radio service regardless of whether the consumer wants the service

or not. Consumers will receive XM service free-of-charge for a period of three months, and no

activation fees will apply. Satellite radio content already is available to nonsubscribers in many

cars from major rental car companies, and both XM and Sirius have arrangements to provide

free, factory-installed satellite radio service in the new cars of numerous American, European

and Japanese automobile manufacturers. This new XM-Acura program extends the delivery of

free satellite radio services to yet another category of nonsubscribers.

More recently, Sirius Satellite Radio has announced that the Howard Stern Show will be

available online to “billions” of nonsubscribers, free-of-charge, on October 25 and 26, 2006.

Sirius’ campaign highlights the “Listen Free” feature of its offer, and the fact that Howard Stern

is “Uncensored Only On Sirius.” See the attached advertisement in today’s Washington Post, p.

A17 (Oct. 23, 2006).

Regulation of broadcast content is based, at least in part, on a governmental interest in

“protect[ing] the listener or viewer from unexpected program content,”1 particularly when

1 FCC v. Pacifica Foundation, 438 U.S. 726, 748-49 (1978).

The Honorable Kevin J. Martin

October 23, 2006

Page 2

children are involved.2 While only traditional broadcasters are subject to strict content

regulation, satellite radio service has been excused from protecting this interest because it is

available on a subscription basis.3 However, as evidenced by the new XM-Acura program and

the Sirius-Howard Stern campaign, an ever-growing portion of the American public now

receives satellite radio content free-of-charge, exposing them to content in the same manner as

free over-the-air broadcast programming.

In light of these developments, drawing a regulatory distinction between satellite and traditional

broadcast radio simply because satellite radio content is available on a subscription basis may no

longer be justified. NAB therefore respectfully requests that the FCC consider the questions

raised by free access to satellite radio programming. The FCC should launch a proceeding to

investigate the questions raised by free access to satellite radio programming, and to consider

whether the unequal regulatory treatment of satellite and broadcast radio should persist.

NAB looks forward to discussing these and other issues of concern to local, free over-the-air

broadcasters with you and your fellow Commissioners. Please let us know what we can do to

assist the FCC in its consideration of these or other matters.

Best wishes.

Sincerely,

David K. Rehr

cc: Commissioner Michael J. Copps

Commissioner Jonathan S. Adelstein

Commissioner Deborah Taylor Tate

Commissioner Robert M. McDowell

2 See id. at 749-50 (discussing children’s accessibility to programming that could “enlarge[] a child’s

vocabulary in an instant”).

3 Letter from W. Kenneth Ferree, Chief, Media Bureau, DA 04-3907 (Dec. 15, 2004), quoting Litigation

Recovery Trust, 17 FCC Rcd 21852, 21856 (2002).

 

[tankedsecondchance]

October 23, 2006

The Honorable Kevin J. Martin

Chairman

Federal Communications Commission

445 12th Street, SW

Washington, DC 20554

Dear Mr. Chairman:

NAB writes to express our alarm regarding recent separate requests by Sirius Satellite Radio,

Inc. and XM Radio, Inc. for special temporary authorizations (“STAs”) to knowingly continue or

resume operating satellite digital audio radio service (“SDARS”) terrestrial repeaters that were

constructed and deployed inconsistently with the terms and conditions of the STAs under which

the FCC initially authorized (and repeatedly re-authorized) Sirius and XM’s terrestrial repeater

networks.1 Given the scope of Sirius and XM’s wanton disregard of the FCC’s rules, NAB

respectfully submits that the FCC should immediately launch a full investigation into both

companies’ conduct and candor before the Commission to determine the true extent of their

persistent and pervasive noncompliance with the FCC’s regulations, and impose appropriate

sanctions.2

1 Application for Space Station Special Temporary Authority, XM Radio Inc., File Number

SAT-STA-20061013-00119 (filed Oct. 13, 2006)(“XM 180-day STA”); Application for Space

Station Special Temporary Authority, Sirius Satellite Radio Inc., File Number SAT-STA-

20061013-00121 (filed Oct. 13, 2006)(“Sirius STA”). Both XM and Sirius also filed requests

for 30-day STAs, with both stating that the FCC can act upon these shorter requests immediately

(and without public notice) while the 180-day STA requests are considered under the FCC’s

processes for longer term STAs.

2 In addition to the FCC’s general rule that any applicant for any FCC authorization must provide

only truthful and accurate statements to the FCC, 47 C.F.R. § 1.17, the FCC’s standard

application for space station special temporary authority cautions that “Willful False Statements

Made on This Form are Punishable by Fine and/or Imprisonment (U.S. Code, Title 18, Section

1001), and/or Revocation of Any Station Authorization (U.S. Code, Title 47, Section 213(a)(1)),

and/or Forfeiture (U.S. Code, Title 47, Section 503).”

The Honorable Kevin J. Martin

October 23, 2006

Page 2

Although the specifics of Sirius and XM’s STA requests differ slightly, both requests are little

more than transparent attempts to legitimize the continued or resumed unlawful operation of

numerous repeaters. For instance, among other breaches of the FCC’s rules, XM admits that:

• 19 of XM’s repeaters were never authorized at all, yet XM continues to operate four of

those repeaters despite their admitted illegality.

• 142 of XM’s repeaters were constructed and deployed at locations that differ by at least

five seconds (i.e., roughly 500 feet) from their FCC authorized locations. This equates to

almost 18% of the 794 repeaters listed in XM’s STA request. XM does not discuss how

many others of these 794 repeaters may be located between one and five seconds away

from their authorized locations.

• At least 221 repeaters (or almost 28% of XM’s total) have been operating at power levels

that exceed authorized levels, and that XM continues to operate at least two repeaters at

excessive power levels despite their illegality.

• At 21 repeater stations, XM has installed a second or third unauthorized antenna, and at

79 repeater locations, it has installed antennas at heights that exceed authorized levels.

XM STA Request at 2-5.

For its part, Sirius reveals problems with 11 of its terrestrial repeaters, stating that with “one

exception, the repeaters were placed at locations that differ slightly from the STA – more than

half of them within two miles of their reported sites.” Sirius STA Request at 2. However,

Sirius’ effort to minimize the significance of its transgressions is apparent. Close examination of

Sirius’ request reveals that, of the 11 repeaters in question, 8 are located at least 1.4 miles away

from their authorized locations, four are placed at least five miles from their reported locations,

and one in Lansing, Michigan is located 67 miles away from its FCC-authorized location. Id. at

Exhibit 1.

Of course, the circumstances described above reflect only those violations of the FCC’s rules

that Sirius and XM voluntarily admit in the recently filed STA requests. Both Sirius and XM

delicately word their applications to minimize the significance of their alleged misconduct. For

example, Sirius states that none of the 11 repeaters in question are currently operating, yet

notably fails to indicate when they turned off these repeaters or how many years these repeaters

were operating in violation of the FCC’s authorizations. Similarly, although XM lists 142

repeaters that were constructed at distance equivalent to almost two football fields away from

their authorized locations, this only begs the question of how many of XM’s repeaters were

constructed somewhat closer to their reported locations, yet still not in compliance with XM’s

authorizations.

Most importantly, neither Sirius nor XM explain why they initially chose to deploy illegal

facilities instead of following the FCC’s rules, or why it has taken both companies almost five

years after the FCC authorization of their repeater networks to disclose these problems.

Speculation abounds whether it was just too much trouble for XM and Sirius to find suitable

repeater locations within the FCC’s parameters, or if XM and Sirius were rushing to beat each to

market and could not slow down to comply with the FCC’s rules. Or, perhaps the nascent

The Honorable Kevin J. Martin

October 23, 2006

Page 3

SDARS operators were wary of the impact that disclosure and compliance with the FCC’s

authorizations would have on their stock price or Wall Street financing.

NAB is particularly disturbed at Sirius and XM’s transparent attempts in the STA requests to

downplay the seriousness of their non-compliance, as well as their audacity in asking for FCC

approval to continue or resume operation of hundreds of repeaters that presumably have operated

for years in violation of the FCC’s rules. Coming on the heels of both Sirius and XM’s

continued failure to resolve interference to FM service caused by noncompliant radio devices

already in circulation in the market,3 these latest disclosures reveal a persistent corporate (if not

industry) circumvention of the FCC’s regulations. Accordingly, the FCC should immediately

commence a full investigation into both the actual and reported operations of Sirius and XM’s

terrestrial repeater networks, including both companies’ conduct and candor before the FCC, and

defer consideration of the STA requests at hand until such an investigation is complete.

NAB looks forward to discussing these and other issues of concern with you and your fellow

Commissioners. Please let us know what we can do to assist the FCC in its consideration of

these or other matters.

Best wishes.

Sincerely,

David K. Rehr

cc: Commissioner Michael J. Copps

Commissioner Jonathan S. Adelstein

Commissioner Deborah Taylor Tate

Commissioner Robert M. McDowell

John Giusti, Acting Chief, International Bureau

Kris Monteith, Chief, Enforcement Bureau

3 Letter from David K. Rehr, President & CEO, National Association of Broadcasters, to Nate

David, President & COO, XM Satellite Radio, Inc. and Mel Karmazin, CEO, Sirius Satellite

Radio, Inc., Sep. 21, 2006.