Sirius XM owns the Digital Audio Radio Spectrum ("DARS" in red) right smack dab in the middle of the WCS bands.

The great war between Sirius satellite radio (SIRI) and the Wireless Communications System Coalition has taken another interesting turn as the Federal Communications Commission ponders whether to lift the price caps the FCC imposed on Sirius as a condition for its merger with XM in 2008.

The WCS Coalition—backed by Comcast (CMCSA),  Nextwave (WAVE), and other wireless companies has spent years trying to resolve spectrum interference issues with Sirius so it can offer wireless broadband services in two nearby spectrum bands. Now the group says drop the caps if the FCC rejects Sirius requested rules that the wireless coalition thinks will screw up its networks.

“It would be premature for the Commission to lift the price cap that was put in place to protect consumers against unwarranted Sirius XM price increases. Rather, the WCS Coalition respectfully suggests that the Commission retain the existing price cap on an interim basis, and defer any decision to lift or modify the price cap until the Commission can address [Sirius's] pending petitions for reconsideration. By first assuring that spectrum will be available for the delivery of Internet-based audio services to automobiles and other places where consumers listen to Sirius XM, the Commission will then be able to lift the price cap without fear of anti-consumer impacts.”

Some background on this godforsaken mess, which we have been covering here for some time. For at least half a decade Sirius, XM and companies in the WCS band have been trying to work out a peaceful coexistence non-interference deal. The owners of the WCS spectrum occupy the 2305-2320 and 2345-2360 MHz bands, while Sirius occupies 2320-2345—smack dab in the middle of WCS.

Finally last year the FCC implemented the non-inteference recommendations mentioned in its National Broadband Plan, but Sirius continued to object to them, and filed a petition for reconsideration against the provisions, which the satellite radio company argued were too lax.

But now, as the third anniversary of the Sirius XM merger approaches (July 28), the FCC must consider whether to lift the three year subscriber price caps that it imposed as a condition for the union. Present Sirius subscription prices range from $6.99 for an a la carte package to $19.99 for the Sirius XM “all-in-one” deal. Obviously Sirius wants the option to raise prices, and said so in a recent filing with the Commission, arguing that the Internet has made the radio business robustly competitive, so the caps aren’t needed:

Satellite radio competes for listeners with an expanding array of audio entertainment choices—most of which are available to consumers for free. These choices include terrestrial AM/FM radio, HD radio, iPods and other portable audio devices, and they increasingly include Internet-based services, such as Pandora, Rhapsody, Slacker, Lastfm and iheartradio.

Pandora alone is reportedly available on over 200 devices in addition to the computer. This competition for audio entertainment is especially acute in vehicles, with several automakers introducing features integrating Internet-based services, further reducing any remaining arguable hurdles to the seamless use of smartphones, iPods and other portable audio devices in vehicles.

But WCS pushes back that, yeah, the environment is potentially competitive, but not if the FCC screws up our new wireless broadband services in those bands with the revised non-interference rules that Sirius wants:

“It is ironic that Sirius XM would in this proceeding point to Internet-based services as competitive threats,” the coalition writes, because “Sirius XM continues to advocate a wide range of rules and policies that will severely limit, if not effectively preclude, the offering of broadband services over WCS as envisioned by the National Broadband Plan.” And:

As the Commission considers Sirius XM’s request to be freed from its price cap, it can and should find that Internet-based audio services have the potential to compete with Sirius XM. But the Commission cannot ignore that Internet-based services will only realize that potential if there is sufficient spectrum that is both available and appropriately regulated to meet the exploding demand for mobile broadband.

It never ends. More public comments to the FCC on this issue here.

In a textbook example of the abusive power of a near-monopoly, the ‘net was set ablaze yesterday upon the news that major internet backbone provider and content distribution network (CDN) company Level 3 called out cable-modem internet service provide Comcast for demanding additional fees for delivering video and other content to Comcast customers. Comcast’s demands come on the heels of Level 3 inking an agreement to become the exclusive US distributor of Netflix “watch instantly” streaming movies and television programming. Quite obviously, Comcast is also in the television business, causing many a public interest advocate to see this action as an anti-competitive move, and just the sort of thing that happens when there are no network neutrality protections for internet content.

While this case has to do with video content specifically, how things turn out will have implications for all types of content on the internet, including radio.

You see, the internet has historically operated based upon peering agreements. That is, one service provider connects to another under the agreement that each will transmit content that originates on the other’s network. As a backbone provider, then, a company like Level 3 would agree to freely transmit content that originates on an ISP’s network in exchange for the ISP delivering Level 3′s content to its customers. At its core peering is supposed to be non-discriminatory, where bits are bits, and it doesn’t matter whether those bits are text, graphics, audio or video. But with Comcast one can only conclude appears that the fact that Level 3 is transmitting video is at issue. In fact, industry expert Dave Burstein tells ArsTechnica’s Nate Anderson that, “As far as I know, no primary backbone provider like Level 3 has ever been required to pay to deliver traffic to another major carrier.”

Level 3 says that it “believes Comcast’s current position violates the spirit and letter of the FCC’s proposed Internet Policy principles and other regulations and statutes,” and therefore is asking for scrutiny by regulators and legislators. For his part, on Tuesday FCC Chairman Julius Genachowski told reporters that, “It would be premature to comment on it without knowing what the facts are. The staff is looking into it.”

While streaming a Netflix movie consumes anywhere from 5 to 10 times the bandwidth of listening to an online radio stations, a victory for Comcast in this matter might cause the company to start looking to hit up services like Pandora or last.fm–which each have significantly larger audiences than Netflix–for additional fees. Such fees could seriously affect the ability of these services to continue to offer free options, or raise the cost of their pay service.

More significant is the threat to smaller webcasters, whether they’re noncommerical stations like WFMU, commercial stations like Indie 103, or a large streaming radio host like Live 365. Even though most stations won’t deal directly with Comcast, any that serve a sizeable online audience use a third-party streaming host or CDN that will have to deal with Comcast directly or via a third party. Eventually any additional fees that Comcast charges will get passed along to the station.

Netflix and Level 3 are big enough companies that they can ill afford to walk away from Comcast’s nearly 16 million internet customers. But such fees might be enough to make it too expensive for a smaller webcaster to serve Comcast customers, forcing them to limit or eliminate service to them. This could lead to Comcast internet customers having less diversity to choose from. Of course, households that can choose a different ISP would be able to do so, but too many broadband consumers in the US don’t have a second ISP to choose from.

A more damaging outcome would be if other ISPs decided to follow Comcast’s lead, driving up costs for all webcasters. One of the most revolutionary aspects of internet radio is its low barrier to entry. Any effort by ISPs to impose fees on audio or video traffic delivered to their customers would threaten this advantage, likely harming noncommercial and smaller webcasters. Large, corporate-backed webcasters, like Pandora, will probably withstand the fees, just like it seems Netflix will. But the overall diversity of web radio will suffer.

Its CEO Alfred Liggins III praised Comcast for helping Radio One develop its TV One cable channel.

“The result is that today, as one of the nation’s two major African-American-oriented channels (and the only one owned by African-Americans), our network now reaches more than 50 million homes via cable and satellite and has an audience with enormous race, gender and generational diversity.

In addition to supporting TV One, Comcast has a history of giving diverse voices a megaphone. The company assisted in launching African-American-owned channels like Hip Hop on Demand, the Africa Channel and Crossings and boasts an unrivaled package of 50 Spanish language channels and 150 titles available on-demand. The newly formed company plans to build on this track record in a number of exciting ways.”

Radio One has mostly been in the spotlight of late for its quarrels with advocates of the Performance Rights Act, which would require broadcast radio stations to pay royalties to performers as well as copyright holders.

Critics of the Comcast/NBCU merger warn that the union would represent another step towards an Internet/cable entertainment oligopoly.

A gaggle of major Internet content companies say they support the Federal Communications Commission’s proposed new net neutrality rules, and the signers of their letter include Sony Electronics.

“This framework will ensure that consumers have access to an open Internet, one that would preserve a level playing field for all participants,” they write. “And it does so without regulating the Internet but only applying basic rules of the road to the transmission services that provide access to the Internet.”

Other backers include Amazon.com, eBay, and Skype, all directly or indirectly involved in online audio, streaming radio, or the retailing of radio gear. I am betraying my age when I note that when I think about Sony, it’s not the PS3 that first comes to my mind, but the transistor radio revolution of the 1960s. That’s what put Sony on the international map, of course.

The FCC’s proposed new open Internet rules come in the wake of the agency’s recent legal defeat by Comcast. A DC appeals court rules that the Commission didn’t have the authority under Title I of the Communications Act’s “ancillary” powers to sanction the ISP for P2P throttling. So FCC Chair Julius Genachowski says he’s going to go with a “third way” approach— something between trying to squeak by on other sections of Title I or just declaring ISPs to be Title II common carriers, like telephone companies, thus subject to telecommunications services anti-discrimination rules.

So, in Genachowski’s words, the FCC will

“Recognize the transmission component of broadband access service—and only this component—as a telecommunications service; [italics ours]
· Apply only a handful of provisions of Title II (Sections 201, 202, 208, 222, 254, and 255) that, prior to the Comcast decision, were widely believed to be within the Commission’s purview for broadband;
· Simultaneously renounce—that is, forbear from—application of the many sections of the Communications Act that are unnecessary and inappropriate for broadband access service; and
· Put in place up-front forbearance and meaningful boundaries to guard against regulatory
overreach”

Here’s a piece of Section 202 and you get the idea:

“It shall be unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services for or in connection with like communication service, directly or indirectly, by any means or device, or to make or give any undue or unreasonable preference or advantage to any particular person, class of persons, or locality, or to subject any particular person, class of persons, or locality to any undue or unreasonable prejudice or disadvantage.”

As FCC attorney Austin Schlick puts it, sections 201, 202, and 208 “collectively forbid unreasonable denials of service and other unjust or unreasonable practices, and allow the Commission to enforce the prohibition. Long before the Comcast decision, access providers supporting an information service classification made clear that they did not seek to avoid enforcement of these fair-dealing principles:”

So basically it will be that ISP last mile “on ramp” to the Internet that will be regulated, not the content on the ‘Net itself. I’m unclear that it was ever the intention of the FCC to regulate content making its way across the backbone or third mile lines, but apparently this is what the Commission thinks it needs to do to go forward on a solid legal footing.

Anyway, there’s a long way to go, procedurally speaking, before this gets in cement, but  kudos for Sony and the rest of the gang for giving the approach a thumbs up.

source: wikimedia commons

The great accusation fest which is the struggle between Sirius XM (SIRI) satellite radio and a host of wireless companies went to its next round on Friday, with Sirius accusing the companies of “warehousing” their licenses nearby the service’s bandwidth:

“There can be little question that WCS [Wireless Communications Service] licensees have warehoused spectrum in hopes of receiving regulatory relief to allow them to deploy mobile broadband services – even though such services are precluded under the WCS technical rules the Commission adopted in 1997. The WCS licenses sold for only $13.6 million in the Commission’s 1997 spectrum auction, in large part because of the restrictions the Commission established to protect satellite radio and other adjacent radio services. WCS licensees that have ignored their obligations to build out their spectrum now stand to collect a windfall profit as the Commission considers rule changes to now allow mobile use of the spectrum at the expense of increased interference into the Satellite Radio service. That profit is magnified by the minimal investment in equipment testing and development that WCS licensees have made over the past 13 years.”

Warehousing in spectrum-talk means just sitting on your licenses until you can sell them at a profit or engage in some similarly unproductive activity.

To recap this story for the umpteenth time: the problem here is that licenses in the WCS band and Sirius XM’s SDARS band are scrunched pretty close together, and the FCC fears that SDARS terrestrial repeaters could cause interference to WCS operations. WCS represents Comcast (CMCSA), AT&T, NextWave (WAVE) and other companies that want to launch WiMAX mobile services in their portion of the 2.3 GHz zone.

I’ve tried to stay relatively neutral about this issue, but accusing these companies of warehousing seems a little unfair. The WCS Coalition, which represents them, has been trying for years to get new rules that would allow them to roll out WiMAX on that 20 MHz of band. It certainly seems like that would be the best use for those licenses. So it’s still up to the FCC to get both parties to agree to sensible non-interference rules, and meanwhile try to duck while the accusations fly.

“The Plan proposes resolving longstanding debates about how to maximize the value of spectrum in bands such as the Mobile Satellite Service (MSS) or Wireless Communications Service (WCS) by giving  licensees the option of new flexibility to put the spectrum toward mobile broadband use—or the option of voluntarily transferring the license to someone else who will.”

We’ve been watching the WCS fight for a while here at Radio Survivor, and (more significantly) so have Volvo, Ford, Chrysler, Comcast, AT&T, NextWave, and quite a few members of the House of Representatives, all of whom have communicated with the FCC on this matter (Mercedes-Benz just filed a week ago).

Here again is the “longstanding debate,” in a nutshell. As the table below indicates, Sirius XM transmits its content over spectrum very close in proximity to the Wireless Communications Services band.

The owners of that WCS spectrum, which include AT&T, Comcast, and NextWave, want to step up use of the band for wireless communications services, but the sticky question is how to avoid interference with Sirius XM repeater towers (and vice versa). Last year, WCS reps proposed compromise limits on transmission power for WCS base stations and Sirius XM repeaters of 2,000 watts average EIRP and 400 watts average EIRP per 1MHz. But Sirius XM still insisted that:

“tests and demonstrations that Sirius XM and WCS licensees jointly performed this summer in Ashburn, Virginia, to demonstrate the interference potential of WCS mobile devices to satellite radio service. Sirius XM stated that the results of the tests confirmed that some implementations of mobile broadband devices in the WCS spectrum would have little potential to cause interference to satellite reception while other implementations would cause significant harm to Sirius XM’s 18 million customers. Sirius XM stated that the primary focus of the pending proceedings should be to define WCS operating parameters to ensure that WCS broadband services and devices are compatible with adjacent band satellite radio operations.”

And just last month Sirius told the FCC that Clearwire’s WiMAX mobile service in Philadelphia would provide a more realistic assessment of interference potential than the Ashburn tests.

Meanwhile more auto companies are siding with Sirius on this question. Here’s Mercedes-Benz’s concern:

“We urge the FCC to be cautious and ensure that satellite radio is not degraded by changing the established rules for WCS operations. Sirius XM Radio has spent billions of dollars developing networks that are based on the understanding that mobile WCS devices would not interfere. MBUSA had this same understanding since we have already deployed over 800,000 vehicles with this technology. Unlike cell phones, automobiles are not discarded every year or two – these satellite radios will remain operational and in circulation for years to come.”

Ditto say Hyundai and Land Rover North America.

So it will be interesting to see how the National Broadband Plan proposes to resolve this question. Is the FCC going to propose that Sirius XM allow some of its spectrum licenses to be leased or auctioned to WCS? Just a speculation, of course, but that’s what Genachowski’s comment seems to suggest. March 16th is the day that the FCC unveils the plan, so perhaps we’ll know then.