Early this month, in a seemingly innocuous move, XM Radio offered 15 new satellite radio channels featuring local programming—traffic updates and weather reports. But because FCC rules require XM (and its rival, Sirius) to exclusively provide national programming, each of these local channels is available all across the country. An XM subscriber in Oregon, for example, can learn about a foggy night on the coast of Florida or the traffic en route to O’Hare, just by flipping the dial.


The launch of the new channels has kicked off a highly charged debate about whether the local content is legal. Traditional broadcasters claim it’s not, because the programming targets particular regions. XM and Sirius (which plans similar channels) claim it is, because the programming airs nationwide. So far, the FCC seems to be siding with XM, but the regulatory scuffle points up the pickle that satellite radio is currently in: In order to get permission to exist, XM and Sirius had to swear off local content. But in order to survive, they need to find a legal way to deliver it to subscribers.


Satellite radio broadcasting was first authorized in 1997, when two licenses were issued to the companies now known as XM and Sirius. Their applications had taken seven years for the Federal Communications Commission to approve, mainly because the National Association of Broadcasters charged that the new service threatened “traditional American values of community cohesion and local identity.”



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