Satellite Radio Merger Concerns Some Minorities

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XM and Sirius, the country's two satellite radio providers, plan to merge. As the Federal Communications Commission considers the deal, there's concern about how it would affect minority listeners. Two minority organizations explain their opposing views on the merger.

MICHEL MARTIN, host:

I'm Michel Martin, and this is TELL ME MORE from NPR News.

Coming up: Do Americans care anymore when their politicians cheat on their spouses? We'll talk with an author who's actually spent a lot of time thinking about this. That's later in the program.

But first, why will satellite radio companies Sirius and XM want to merge. The Federal Communications Commission, which would have to approve the merger, took in the first round of public comments last week. Both companies have been in the red since they launched and believe they'll be stronger together than apart. And they say a merger would also benefit consumers.

One question XM and Sirius face is how the merger will affect choices of programming, since many listeners - no matter what their background is -already believe that the consolidation of media companies has actually limited their choices for information and entertainment.

Right now, XM Radio reaches out to black listeners with its station, 169/THE POWER. There's also Oprah. And XM also tries to serve Hispanic listeners through four Latin music channels, like Channel 92.

(Soundbite of an XM Radio Show ad)

Unidentified Woman #1: Real talk. So we talk.

Unidentified Man #1: Strong talk.

Unidentified Man #2: Let's talk.

Unidentified Woman #2: Loud talk.

Unidentified Woman #3: (unintelligible) talk.

Unidentified Man #3: Straight talk.

Unidentified Man #4: XM 169/THE POWER. Now that's what I'm talking about.

Unidentified Woman #4: What do you want?

Unidentified Man #5: XM listeners asked for it, and now Oprah and friends presents the Summer Soul Series. An encoreā€¦

Unidentified Man #6: Vincente Fernandez.

Mr. VINCENTE FERNANDEZ (Musician, Singer): (Singing in Spanish)

Unidentified Group: (Singing in Spanish)

MARTIN: Would an XM-Sirius merger broad minority programming or limit it? Joining me now to talk about this is Jim Winston, president of the National Association of Black Owned Broadcasters. His group opposes the merger. He's here on our studio. And from our Chicago bureau, Brent Wilkes, national executive director of the League of United Latin American Citizens, or LULAC. That group favors the merger. Welcome to the program.

Mr. JIM WINSTON (President, National Association of Black Owned Broadcasters): Thank you.

Mr. BRENT WILKES (National Executive Director, League of United Latin American Citizens): Thank you.

MARTIN: And before we begin, I'd like to note that National Public Radio has two channels on Sirius, which also carries this program. So I'd like to begin with you, Mr. Wilkes. Your organization has traditionally been opposed to media consolidation. Why the difference of opinion this time, or why the departure from that past position?

Mr. WILKES: I really think it has to do with the fact that this is a new technology that hasn't been proven as a viable business model yet. In fact, as you just mentioned, they are still in the red. And we think that it's important to have this new way of delivering media to the community, but we want to be viable and I think that they deserve a little bit of license here to be able to make a solid business model.

We believe that because they're just started, it isn't the type of thing where our communities are really become to rely on this product. It's kind of like if two companies started on Monday and then they decided they'd merge on Friday because they couldn't make a go of it. It's hard to argue that there would be a lot of damage caused by that, as compared to local companies that have been in existence for many years getting gobbled up by a major company. It's a whole different type of scenario. And that's what we typically been opposing.

MARTIN: Let's bring Mr. Winston in. Your organization, the National Association of Black Owned Broadcasters, is opposed to the merger. What about Mr. Wilkes' argument that this fledgling enterprise deserves a chance to expand opportunities by just existing, staying around long enough to survive?

Mr. WINSTON: Well, that would an interesting position to take if these two companies came in and said we're failing and we're going to go under if you don't let us merge, but they have not made that argument. In fact, in testimony before Congress, they have both said that they'll be doing fine even if they don't merge.

So the question then becomes, well, what's the public benefit of letting them merge, because you're going to have a monopoly? The key is that there are only two companies in America that have been allocated spectrum for satellite radio - that's Sirius and XM. So why would you let them have a monopoly when they haven't even given you a good justification for having one?

MARTIN: Mr. Wilkes, what incentive would XM and Sirius have for expanding the diversity of programming choices absent the competition?

Mr. WILKES: Well, I think that part of the incentive is that when they come to us to ask for our support, that's something that we insisted upon, that they would actually enlarge the number of Spanish-language programming available.

MARTIN: One or the other of the channels approached your group for support?

Mr. WILKES: We were approached by the Sirius folks shortly after the merger was announced, and we thought that after looking at the whole thing that it wasn't like there was two minority companies being bought up by the conglomerate, for example. We're typically opposed to that type of thing. And we are concerned that, you know, yes, they haven't said that, hey, we're financially struggling and unless this happens, we're going to go under. I think that would be a mistake for them to make it to the stock market. They'd probably take a pounding if they said something like that.

MARTIN: Mr. Winston, what about that?

Mr. WINSTON: Well, I think what you got to look at is we're not talking about two mom-and-pop operations. We're talking about multi-billion dollar operations. They have no reason to do a lot more diverse programming and they have no ability to do a lot more diverse programming.

What we learned when we investigated this is that they don't have a - an operable receiver that will let you receive both XM and Sirius programming, which means that after the merger, the programming on both channels is going to look very much the same because they have to sell that as two separate services because they're different receivers. Because we thought that there might be large number of new channels being opened up, that there would be a diversity. But they're going to be duplicating the same programming on those channels for the foreseeable future.

And, in fact, when Mr. Karmazin, the CEO of Sirius, testified on Capitol Hill, he says it's going to be 10 or 11 years before they have a receiver capable of receiving the programming for both channels.

MARTIN: But what about Mr. Wilkes' basic point, that this is a new technology? It is not one that minority communities have come to rely on, so they're not displacing anyone.

Mr. WINSTON: Terrestrial radio competes with satellite radio every day. We don't compete with them nationally because we have only local channels. They compete with us because their national channels competing in every local market. So it is a direct competitor to terrestrial radio and terrestrial radio is incapable of competing on their terms.

MARTIN: Why?

Mr. WINSTON: Because we don't have national channels. If I have a radio station in Washington, D.C., it only covers Washington, D.C. It doesn't cover Los Angeles, New York and Chicago.

MARTIN: But presumably, you have the advantage of understanding your market and being able to speak to your market with voices that are particularly attuned to your market. Why are you concerned that you wouldn't be able to compete?

Mr. WINSON: Because you don't ever want to have a competitor that has monopoly in a technology, and it's just that simple. If you let them have a monopoly in satellite radio, you don't know what kinds of things they can do in terms of undercutting their competitors.

So that's why the FCC, when they licensed the two companies, they said - at the time they licensed them, they said we will not later allow you to merge and form a monopoly in this spectrum. The minimum we could ever hope to have of competitors is two. And so the FCC has already said this is not in the public interest, and now they've come back trying to find a new FCC, hopefully to get a different answer.

MARTIN: You're listening to TELL ME MORE from NPR News.

I'm speaking with Jim Winston, executive director of the National Association of Black-Owned Broadcasters, and Brent Wilkes, the national executive director of a League of United Latin American Citizens.

Mr. Wilkes, I wanted to ask you why do you think a merger is in the particular interest of the Latino community?

Mr. WILKES: Well, beyond the expanded access to Latino programming, we think that there's also a benefit to consumers for not having to make a format choice. Many folks remember the beta-versus-VHS years when we had to kind of choose between one type of player over another, and that can create a lot of wasted dollars when somebody picks the wrong technology and ends up getting - having a useless radio at the end of things.

So by creating the merged company, you basically have to choose only one thing. You don't have to make a choice between the two and end up having your favorite show move from to the other, for example.

MARTIN: We've seen the influence and popularity of Spanish-language programming, or programming oriented toward the Latino community on terrestrial radio. I mean, especially during the recent immigration debates, you've seen the reach of these broadcasters and how connected they are to the community.

So again, I wanted to ask you the same question I asked Mr. Winston earlier, which is what can satellite radio offer these listeners that they're not already getting with hosts who know who they are, who know their markets, who understand what their listeners want to hear? What can they get from satellite that they're not already getting for free?

Mr. WILKES: The first and most important thing is that in certain parts of the country, they don't have Spanish-language channels. So, yes, if you're here in Chicago, you're covered. But if you're in Minnesota up in the North, you may not have a Spanish-language channel, but you would have access to the Sirius channels or the XM channels. And so you can get programming in the language you understand, and you can enjoy the types of music that you like to listen to. So that's the biggest advantage, I think.

MARTIN: What is the answer, then is - you've noted and other people believe that consolidation has not benefited the diversity of voices in a way that many people hope that it would, that a very small number of say full power commercial stations are owned by my (unintelligible) as I understand it, it's less than 10 percent - less than 10 percent owned by women. So what's the answer?

Mr. WILKES: From our perspective, I think, this really has to be done by government regulations. If capitalism is the vehicle for trying to preserve diversity, it's not going to work very well, because these companies will get bought out by the big players. They have the money and they have the power to do it. And at one point, we did have a favorable minority ownership rules in place, and the FCC's basically gutted those. And we're very much in support of restoring those, because we've seen what's happened. And the other thing that should be restored is the limit on the size of these conglomerates.

They keep allowing them to have more and more stations at any given market, and that's just not healthy because you do get a loss of diversity of content, and certainly, you don't have minority stations, and so that's the real problem that we're trying to combat.

MARTIN: Mr. Winston, I have to push you on one point. One argument might be that no technology is a threat to quality, and if the broadcasters who belong to your association are doing their job and serving their markets, then they have nothing to fear. What would you say?

Mr. WINSTON: I think that's very nice in theory, but in fact, with the kind of situations we had - when the FCC took the rules off of radio ownership, we had my members calling me saying a large conglomerate just said they're buying five radio stations in my market. They told me if I don't sell my station to them, they're going to flip one of these stations to my urban format and they're going to be selling their advertising for virtually free. And my choice is either to compete against that or to sell. Some of them sold, some of them tried to fight and sold later at a much lower price. So it's very nice to say that quality always survives. Quality doesn't always survive if people have market power.

MARTIN: All right. And what's the next step if the merger is approved?

Mr. WINSTON: Obviously, if the merger is approved, I suspect that, you know, we'll continue to compete with whatever the company is out there. I think that from the question they've been getting on the Capitol Hill, I think the chances that this merger is going to go through are fairly slim, actually.

MARTIN: All right. Well, keep us posted. Jim Winston is executive director of the National Association of Black Owned Broadcasters, and we also spoke with Brent Wilkes. He is the national executive director of the League of United Latin American Citizens. Thank you both so much for speaking with us.

Mr. WINSTON: It's been a pleasure.

Mr. WILKES: Thank you.

(Soundbite of music)

MARTIN: And we want to hear from you. What are your thoughts about an XM-Sirius merger? Do you think it would stifle the diverse programming or enhance it? And what is diversity in programming, anyway? Do you think it's about diverse backgrounds, race, gender, sexual orientation, religion or something else entirely? To share your thoughts about this or any other topics you hear on our program, please go to our blog at npr.org/tellmemore and tell us more.

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