- The Washington Times - Friday, February 27, 2004

XM Satellite Radio long has pinned its fortunes on persuading drivers of the 200 million cars on the nation’s roadways to sign up for its service and abandon the static and weak signals of AM-FM radio.

Now the company hopes the traffic jams those drivers create give consumers another reason to tune in to their digital, subscription radio service.

Today XM plans to begin broadcasting District traffic and weather reports. On Monday it plans to start beaming local traffic and weather information for 14 more markets, including Baltimore.

XM billed itself as the first radio station able to broadcast programming nationally when it began more than two years ago. Now it’s going local.

That move has AM and FM stations arguing that the small but rapidly growing digital radio service is violating its license by providing local programming.

XM says it is complying with the terms of its Federal Communications Commission license.

The District company also says it is merely responding to the demands of its 1.5 million customers.

“Our subscribers have said this is what they want. They’ve told us the only time they turned away from XM was to get” local traffic and weather, XM spokesman Allen Goldberg said.

Competitors — the nation’s 14,000 terrestrial AM and FM radio stations — argue XM has come up with a clever way to violate the spirit of the license granted by the FCC while still meeting the terms of its agreement.

The issue revolves around the use of XM’s network of repeaters, the devices that strengthen radio signals beamed from its two satellites. XM won regulatory approval to install the repeaters in dense urban areas where buildings can make it difficult for receivers to capture satellite transmissions.

XM agreed not to use repeaters to broadcast local programming.

But that’s just what the company will do beginning today, said Dennis Wharton, spokesman for the National Association of Broadcasters (NAB), the trade group in the District that represents terrestrial radio stations.

“We think it’s clearly a violation of the spirit of the agreement. This is licensed to be a national service only,” he said.

Next week the company will introduce reports for cities including Baltimore, Philadelphia and New York.

XM will dedicate a single channel for each city, and deejays will provide reports 24 hours a day.

A tiny broadcast booth at XM’s headquarters just off New York Avenue NE has computer screens with all the information Allen Scott needed to piece together reports for the District and Philadelphia last week while testing the new system.

Mr. Scott and 30 other full-time and part-time traffic reporters will read information compiled by Mobility Technologies, based in Wayne, Pa.

Some traffic reports will be repeated, especially those running during the middle of the night, but deejays plan to update information every two to 10 minutes.

Mr. Scott, who became widely known in the District during his tenure as a deejay on WHFS-FM (99.1) before leaving three years ago, said presenting traffic reports is hectic and bears little resemblance to his former job, where bathroom breaks weren’t as difficult to squeeze in.

“It’s extremely crazy,” he said. “But it feels good to be back behind the microphone.”

Last week he read a traffic report for the District, and the information could be heard nationally. Since XM beams each city’s traffic and weather news nationally, Mr. Goldberg said, the reports aren’t strictly local.

Subscribers in the District will be able to listen to one station to get information about Capital Beltway traffic, for instance, and tune into another station for information on Baltimore traffic.

“From our standpoint there is no controversy. We are providing these channels on a national basis,” Mr. Goldberg said.

XM, which charges $9.99 a month for its subscription radio service, plans to begin broadcasting traffic and weather reports for six more cities beginning in April. Subscribers need an XM receiver to get the service.

Mr. Wharton said the NAB may take legal action in an attempt to stop XM’s traffic and weather broadcasts, but he maintains that the broadcasts won’t represent a significant threat to AM and FM radio.

Terrestrial stations have broadcast traffic reports, local news and information about school closings for years, he said.

“Does this make them more competitive? I suppose in markets where they’ll offer the programming you can make that claim. But the vast majority of listeners still identify with and will continue to identify with the hometown service, as opposed to some canned service thousands of miles away,” Mr. Wharton said.

Broadcasting local traffic and weather is unlikely to help XM add subscribers, but it could help reduce the number of customers who cancel subscriptions, said Dominic Ainscough, senior analyst with the Yankee Group, a technology research firm in Boston.

On average, 1.4 percent of XM customers canceled subscriptions each month in 2003.

But Beltway gridlock may give XM subscribers one less reason to switch back to AM-FM.

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