Could FCC Position On Phone Service in Apartments Spill Over Into SDARS?
The FCC has issued a decision that effectively bans exclusive deals between telephone carriers and apartment building owners. The issue centered around the fact that a telephone carrier choice was taken away from consumers because apartment building owners had an exclusive relationship with a specific telecom carrier.
The new FCC regulation not only applies to future contracts, but also applies to all contracts that already exist. The immediate result is that consumers can now choose which telecom carrier they want to do business with. The FCC found that these exclusive deals hurt consumers as well as competition. Perhaps the most important aspect in the issue is that the FCC felt that the exclusive telecom arrangement spilled beyond the phone, and extended to television as well as Internet offerings. Consumers were unable to take advantage of bundled offerings because their building may have had a relationship with a carrier that did not offer the Internet and television offerings that the consumer wanted.
How does this tie into SDARS?
As many are aware, Sirius and XM each have exclusive relationships with various auto manufacturers. If you buy a GM, you are locked into XM. If you buy a Ford, you are locked into Sirius.
One concession that has been brought to the FCC is the exclusive relationships with OEM’s. Ibiquity, Slacker, U.S. Electronics and others have expressed concern over the OEM deals that SDARS has established. From a regulator standpoint, it may well be that these exclusive deals get a deeper look. Given the sentiment of the FCC on the apartment telecom issue, it would not surprise me if the regulators seeks some sort of concession along a similar vein in satellite radio.
From my perspective, this type of concession does not give me a lot of heartache. I have no issue with consumers having the ability to use the service they want to use. Whether Sirius and XM would agree with my opinion is unknown, but time will tell as to whether such a concession is sought by the FCC.
Position – Long Sirius, Long XM
So, Apt. bldgs and car manufacturers are worlds apart. The car manu’s have had long standing deals with certain radio manu’s and isnt it poss. to get either (Satrad) service in most vehicles with an extra peice of hardware. One is pretty much limited to what phone service is connected (hardwired) to an apt bldg. This is an exclusive deal between the owner of the apt complex and phone carriers vs audio options in a vehicle. Key word = options. Every car comes with Am/FM not every apt comes with an optional “cell phone”
While I agree that the concepts differ, there are many similarities.
The point being that the exclusive arrangements take away consumer choice. If you buy a certain brand, your choice is limited.
With apartments, the hard wiring is in the same infrastructure for all carriers. Each telecom does not run their own wires. Thus, absent the exclusive deals, if you want verizon, you can get verizon. If you want AT&T you can get that.
With SDARS, the antennas are interoperable. The only real change is with the capability of the radio. If the FCC were considering concessions, one has to imagine that consumer choice would be high on the list.
As a consumer I have had both services. I enjoy one more than the other. Why should I as a consumer be forced into one provider over the other because of the car I buy?
There will be some who like the exclusive OEM deals. I do not happen to be one of them. I never have liked them. I would rather see the consumer have a choice as to which service is available to them.
The telecom decision by the FCC was made because of the restricytions it had on consumer choice.
>>> There will be some who like the exclusive OEM deals. I do not happen to be one of them.
But you will acknowledge there would be NO satellite radio at all today without the exclusives, right? That it was the exclusive arrangements with the Big 3 (plus Honda, I suppose) that jumpstarted satellite radio in the first place, and that those deals could never have happened without exclusivity? Right?
The FCC received a lot of letters from consumers asking for this. However, I do not think that many consumers have thought to send a letter to the FCC about sat-radio and cars.
The truth is that there are mostly consumers that want Sirius when they can only get XM with their new car. I think that Howard Stern has a lot to do with that and let’s not forget football.
XM lost the game of content after football and Howard Stern went to Sirius. The only reason that XM is still alive is because of their exclusive deals with car companies.
XM gained a lot of momentum and in the begining many people thought of it as the only sat-radio (and it was for a while) but given the chance 9 out of 10 consumers would have chosen Sirius instead of XM if they could. JMHO.
I imagine people that were so excited to buy that Honda with the XM radio in it and then they were trying desperately to find where the football game was playing and they couldn’t.
And then going to the party and listen to that guy telling what Howard did on his show made them wonder what they did wrong and what sat-radio was that they were hearing about. It was too late to change car and service though.
I am sure that Sirius customer service had people calling and asking how they could convert their XM subscription to Sirius not knowing that they would had to get a new radio.
hippocritical…..
To say that there would be no satellite radio without the exclusives is a bit vague.
There would be no satellite radio without the subsidies that SDARS paid to OEM’s. Those subsidies did not have to be exclusive as long as they happened.
An OEM getting paid to put capable radios into cars was what was needed. The exclusivity helped accomplish this, but it was not a requirement to get SDARS running in the auto industry. It boiled down to dollars
Regardless, that was then, and this is now. It is my opinion that the FCC will adresss the exclusive contracts in some manner or another.
Ok, we all know the phone lines are part of any said bldg. We also know that most people will deal with what ever radio is in their new car. The fact that Satrad has 4-5% market share says so. Exclusive deals are always one sided if one decides they want different. One phone carrier in an apt bldg is limiting the renters to one single service provider. One Satrad service in a car does not limit the owner to having one audio entertainment choice/provider.
Some may be limited to what and where they can rent, with that they are again limited by what phone co. has been contracted by the owner. No one is really limited to a certain car brand, model or its entertainment system. While it may not be to “satisfaction” of any said buyer that one model or brand of car is exclusive to “XM or Sirius” the buyer has the “free” radio installed and the ability to alter it with aftermarket products. The tenant/ leasee of an apt does not have that option over a contracted phone carrier.
The difference between what someone needs and pays for to be able to call 911 and what someone wants to listen to are at 2 ends of the priority chain. The FCC is correct in breaking these exclusive phone carrier contracts with apt. bldg. owners. In the end the Govt. has a responsibility in ensuring each of us have a choice in what we need but should stop in providing regulations in what we want. We as consumers have that power. Our $ determines the winners and losers.
If everyone wanted XM Id have to think FORD would have given that as a manu. option by now. What do you think keeps the aftermarket radio business going? What keeps the aftermarket anything going?
Im not saying you are wrong in your thinking, Im just putting the fight out there incase the Govt wants to play that game with Satrad.
As we all know HD is pushing it.
>>> XM lost the game of content after football and Howard Stern went to Sirius. The only reason that XM is still alive is because of their exclusive deals with car companies.
Homer totally disproved this idiotic idea here last week.
That you mentioned football is laughable — the $300M or so SIRI spent on NFL was a near-total waste of money. The fact that SIRI spent the billion dollars on NFL and Stern, yet STILL cannot claim a significant majority of retail sales is telling.
It is a fact that XM captured the OEM market — and it did so by providing technologies that Sirius has been unable to replicate. XM’s net revenue share across all OEMs is no worse than SIRI’s (remember, SIRI is forking over about 25% of its revenue for F and DCX installs).
Your remark is typical uninformed Siriot nonsense.
Hippocritical ass (FrontMed, Stack pointer), I showed you SIRI is getting net retail subcribers at over a 3 to 1 ratio even with adding in the extra churn for XMSRs extra existing retail subscibers SIRI is still at a ratio of 3 to 2. So who are you kidding. I also showed how if you take the two companies and start them out at the same time which one is the choice people are making. Canada is the perfect example where SIRI has 80% of the retail market and about 70% of the total market (given the information up to date), there SIRI only started 2 months later then XMSR
I will agree with you about football, most people watch it on TV. Where baseball is more a radio thing. But to say that Stern was a bad deal is nutty. Stern was Sirius’s springboard into the mainstream. You cant be that dense to think it was a quintsidense that at the same time Stern came to SIRI they went from getting around a 100,000 a quarter to over a million for that quarter. Also it just so happens that was the quarter SIRI went from getting a small fraction of the net subs that XMSR was getting, to beating them for the first time, and ever sence. You know full well Stern got SIRI enough subs to pay his salery almost twice over.
Also did you read the DOJ’s decision? You were proven wrong again and again.
P.S. Hippocritical ass, now that you have been proven wrong again. Can we expect you, to show up as yet another name. Like I said it is a sad and pitiful thing when you have to come in with a different name on the same arguement, just to make you feel better that someone else agrees with you.