Satellite radio captures ears of millions
By Kathleen Kingsbury
(CNN) -- When Mike Alden first tuned in to satellite radio, he simply could not turn it off.
"I was sleeping less than four hours a night," said Alden, who subscribed to XM Satellite Radio in June 2003. "I'd gotten so sick of FM radio's cookie-cutter programming. XM is a music-lover's paradise."
Alden, a computer specialist, says he listens to satellite radio up to 16 hours each day so he doesn't miss any programming while traveling between his Detroit, Michigan, home and office. The possibilities astound this lifelong music fan.
"There's just so much music to listen to," he said.
Alden is not alone. Satellite radio's popularity is growing rapidly nationwide. The leading provider, XM, claims it has 2 million subscribers, and smaller competitor Sirius Satellite Radio recently said it has 500,000 subscribers. The two companies now offer a total of 133 commercial-free music channels and 88 of talk radio. Both XM and Sirius are racing to launch new technology and programming.
From space to your ear
Satellite channels beam their signals to a satellite orbiting more than 22,000 miles above the earth, which then transmits them to radio receivers in cars and homes. Subscribers buy receivers, priced as low as $50, to receive the service. The technology allows listeners to hear the same station anywhere in the continental United States.
The Federal Communications Commission initially opened up bandwidth on its satellites for commercial broadcast in 1997. Four companies paid $80 million each to access the spectrum.
Washington-based XM signed up its first customers by September 2001, and Sirius followed in 2002. The two companies are now the only broadcasters in the United States, but satellite radio is also available in more than a dozen nations in Europe and Asia.
Subscribers often say that in addition to its availability, satellite radio's voluminous programming -- as diverse as music from rapper Eminem and a National Rifle Association talk show -- is why they pay $10 a month. Music genres from the obscure to the ubiquitous fill the radio dial. NASCAR fans find comprehensive coverage, as do opera enthusiasts and Britney Spears fans.
"With their library of more than 2 million songs, you're bound to hear songs you like that you haven't heard in years," says subscriber Ryan Mathus, 20, a student at the University of Delaware.
But Mathus says a lack of local news, weather and traffic detracts from satellite radio's coverage.
To fill that gap, XM has recently patented technology to use ground repeaters that will provide listeners with weather and traffic in many major U.S. cities.
That move has sparked a heated dispute about how far satellite radio should infringe on traditional radio's long-held territory.
Conventional broadcasters, worried about losing business, have cried foul. The National Association of Broadcasters, the lobbying arm of traditional radio, says local programming by satellite radio would violate government regulations.
"We believe satellite radio companies were licensed for national radio programming services exclusively," NAB spokesman Dennis Wharton says.
The FCC has denied that. The government body says it did not intend to limit satellite radio to national programming only. The agency opened a dialogue last spring on what the future of satellite radio should look like.
"These new horizons in radio broadcasting should correspond to new horizons in serving the public interest," FCC commissioner Jonathan Adelstein said in an April 2004 statement. Adelstein said that public service includes local news, weather and traffic.
A bipartisan pair in the House of Representatives responded to the NAB's frustration by proposing the Local Emergency Radio Preservation Act of 2004 in March. Republican Charles Pickering of Mississippi and Democrat Gene Green of Texas submitted the legislation, which seeks to limit satellite radio's programming and to address some broadcasters' complaints that the new industry's lack of oversight is an unfair advantage.
"If they are going to compete," Green said in a recent interview, "then they need to compete on the whole playing field."
Sirius staff operate the company's three satellites from its control room in New York City.
The legislation will "codify an agreement" that satellite radio companies allegedly made to steer clear of local content, Pickering wrote to CNN. The bill also asks the FCC to investigate whether satellite radio will interfere with broadcasts of the local emergency system or Amber Alerts, which notify the public about child abductions.
Satellite companies have staunchly opposed such a law. According to XM spokesman Allen Goldberg, the FCC licenses granted to XM and Sirius said nothing about content. He says the legislation is an attempt by the NAB to impede innovation.
"They are looking to Congress and the FCC to protect their business instead of going out and competing," Goldberg says. "Eventually, they will be forced to go there and improve."
Goldberg notes that the broadcasters association pursued a similar fight against television in the 1940s and again in the 1970s, with the rise of FM radio.
Broadcasting to the future
Meanwhile, both XM and Sirius are looking to the future by adding both subscribers and channel choices despite falling short of some projections for profits.
XM reports it is on track to reach 20 million subscribers by 2010. Sirius will soon have talk stations hosted by skateboarding champion Tony Hawk and the staff of racy men's magazine Maxim. Car companies Honda and Porsche plan to offer satellite radio in new vehicles this fall, and new premium pay-channels, such as one from Playboy, are being added.
Customers see potential in the service. Asked if he'd be willing to pay even more for something he could get for free, subscriber Tom Ulmer of Omaha, Nebraska, doesn't hesitate.
"Sure, pay a bit extra," Ulmer says. "Why not, you pay extra for a Whopper with cheese, don't you?"
CNN's Michael Coren contributed to this report.