XM/Sirius slithers along

A number of media outlets are reporting that as expected, FCC Commissioner Robert McDowell has opted to go along with FCC Chairman Kevin Martin and approve the merger of satcasters XM and Sirius with the minimal concession package proposed by Martin last month. Conventional wisdom remains that a much sweeter package will be necessary to procure aye votes from Democrats Michael Copps and Jonathan Adelstein, and that Republican Deborah Taylor Tate remains the wildcard in the proceeding.

Meanwhile, automakers GM and Toyota are pleading against any concession that would force in-car receivers to include HD radio reception capability. They argue that this is a determination for the marketplace in general and consumers in particular to make.

Seeking Alpha analyst Tyler Savery has hit on what may be a bone of contention for any entity involved with applicable audio receivers – adding an HD chip to any set is expected to cost between $10-$12. Until it is determined who picks up that amount, there is going to be resistance to mandating its presence in all automobile receivers.

RBR/TVBR observation: We could see the FCC backing an HD mandate on grounds of preserving local service to people in automobiles. We have no idea how they’d go about mandating it, however. But brpadcasters have issues to consider whether they do or not. Our bottom line is that the main program stream should remain the focus of local programmers, and digital should be used to promote quality, not self- balkanization.

Broadcast television was real big on promoting digital multicast must-carry a few years ago, ahead of the DTV transition. Now, not so much. The problem has been the lack of a formula to monetize digital side channels. Radio has made even less headway.

The question remains, should either medium even be trying? The sales hook for broadcasters has always been their ability to aggregate a large audience. If a broadcaster figured out today how to break even on a side channel, it would probably be at the expense of its flagship audience – obviously a net loss.

Our gut feeling for both radio and television is that neither should attempt to be niche-based cluster of programming services -- that is the m.o. of cable and satellite, and broadcasters should let them have it. Digital should be used mainly for quality – high def – and the unlimited potential world wide web should be the place where an audience community is built and business-enhancing ventures are allowed to take root.

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