FCC Issue With sirius and XM
August 13, 2006
The FCC issue as it relates to FM modulators and Sirius/XM has been widely discussed. Both companies have had radios manufactured that have been deemed non-compliant with FCC regulations. Both companies have offered statements regarding the issue.
As things stand now, Sirius seems to have cleared the FCC hurdle (except for the S50), and XM seems to still be seeking approvals. What differs with the companies? Why has one received authorization to resume distribution and the other has not?
Some of the issue for XM boils down to the method by which their FM modulators operate. The XM power cables help generate a stronger signal for FM modulation. Further, the testing requirements now appear to be in limbo, thus making it difficult to engineer a solution that would be acceptable to the FCC (it is hard to design when you do not know what the limitations are).
It would appear that Sirius has taken the route of taking down the power enough so as to pass virtually any test that the FCC would come up with. Is XM waiting for a test criteria decision prior to implementing a fix, or is their current design not codusive to meeting the desired criteria with out excessive cost?
Recent 8K filings by the respective companies also seem to shed light on what the FCC is looking for in addition to getting compliant units:
Sirius' 8K of July 20, 2006:
"We have taken a series of actions to evaluate, mitigate and correct the problem. We directed manufacturers of Sirius radios with FM transmitters to suspend manufacture and shipment to retailers of non-compliant devices and to make the necessary changes in production to bring the radios into compliance.
In connection with our internal review, we discovered that certain Sirius personnel requested manufacturers to produce Sirius radios that were not consistent with the FCCÂs rules. As a result of this review, we are taking significant steps to ensure that this situation does not happen again, including the adoption of a comprehensive compliance plan, approved by our board of directors, to ensure that in the future our products comply with all applicable FCC rules. "
Sirius seems to have indicated a few things here that now look to be important factors:
1. They acknowledged a halt in production and distribution of non-compliant radios.
2. They indicated that they were making the required changes to bring the radios into compliance.
3. They conducted an internal review.
4. They identified that Siriuspersonnell authorized production of non-compliant radios.
5. Theyindicatedd that they have taken significant steps to ensure that this does not happen again.
6. They developed a comprehensive compliance plan that was reviewed and approved by the Board of Directors.
In our opinion the Sirius response let the FCC save some face, but more importantly, it shows that steps were taken to identify how it happened, and plans were made make sure it did not happen again. The issue was taken seriously, as demonstrated by brining it to the Board level.
XM 8k of August 7, 2006:
"On August 7, 2006, the FCC requested additional information with respect to these devices, as well as the Sportscaster, Roady XT, MyFi, Airware, Tao and Roady 2 devices, including the chronology and circumstances leading to the non-compliance, and actions and remedies undertaken to correct the situation.
We will respond promptly to the latest FCC request and have implemented a series of actions involving our radios designed to bring them into compliance; we have also requested our manufacturers to suspend production and/or shipments of radios or accessories with these issues. We are completing the necessary design or installation modifications, as appropriate, and conducting additional testing for XM radios to meet applicable FCC requirements. "
It would appear that the FCC is seeking from XM basically what sirius did nearly 3 weeks prior. What was it about the FCCinquirersy that enabled Sirius to respond in the manner they did, but had XM apparently standing still? Did 3 weeks get lost in the process? Why is it now that the FCC is seeking documentation regarding XM units that are not even being produced any-more? Is it fair to guess that Sirius understood what the FCC was seeking, and even though it meant eating some crow, that they complied? Is this a case of companies that manufacture FM modulators knowing that they were "speeding" all along, and it is now that the FCC broke out the radar?For those that have followed these companiess for some time, look back at message board comments about FM modulators and the power they had. If you look up these old discussionss, you will likely see what is going to happen with this issue going forward, because you will see the chronology of FM modulated units and when the "spike" in power started inSDARS.
Going forward we are likely to see a few things:
1. Radios will have weaker wireless FM modulators, and wired connections will be encouraged.
2. Engineers for both companies will work on solutions to improve the consumer experience while still being in compliance with the FCC.
3. sirius will issue a statement relative to the S50 status.
4. XM will offer the clarifications that the FCC is seeking.
5. FM modulators, overall, will have much morescrutinyy from the FCC.
6. Both companies will likely become more involved in the install business (with installation cards, or installation "subsidies" in lieu of traditional rebates).
This issue is far from over. The one clear thing to note is that XM NEEDS to get hardware in theb channel as soon as possible if they intend on competing at the retail level.
8/13/2006 11:08:00 PM
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