A Letter To NAB

September 21, 2006

David K. Rehr Ph. D
President and CEO
National Association of Broadcasters
1771 N. Street NW
Washington DC, 20036-2800

Dear Mr. Rehr:

I have reviewed a copy of the letter( http://tinyurl.com/qjxuc )that you sent to Mr. Nate Davis, and Mr. Mel Karmazin. I can imagine that the letter you receive back from these two individuals will be very respectful and “politically correct”

This letter will not hold back any punches.

You state that you “observed with great interest the recent developments concerning the distribution of satellite radio devices unlawful, unwelcome interference to free over the air radio services.”

Please let me take a moment to clarify your statement……..What you actually meant to say was that you complained to the FCC about these devices, hired consultants to show that they were non-compliant, and then complained even more. Then, the resulting FCC actions were something you cheered about with a big smile on your face.

Now, the news flash…….You can cheer about small “victories”, but should be aware that what you have effectively accomplished is to make satellite radio subscribers use alternate methods of hooking up their receivers which in effect actually IMPROVE the sound quality of the satellite radio listening audience over that which an FM Modulator offered any way.

You then urge Sirius and XM to take what you term as “the next logical step by voluntarily withdrawing and replacing all noncompliant receivers already in circulation to resolve existing interference to terrestrial radio service”

While you may feel that this is the next logical step, it does not make it so. The next logical might actually be in your court. The next logical step may well be for the members of the NAB to offer compelling enough programming to compete with satellite radio where it really matters. You see, it is the success of satellite radio that is the root cause of your actions. You feel threatened by the fact that consumers are adopting satellite radio faster than cable television, satellite television, and cell phones. It would seem that you now understand all of this, and will stop at nothing to combat it in any way possible. Perhaps if your membership had given consumers what they wanted in the first place, they would not be so compelled to leave “free (20 minutes of commercials per hour) radio”.

You then have the audacity to suggest that Sirius and XM “suspend services to subscribers with activated, integrated FM Modulators”

News Flash #2……This suggestion is simply ludicrous. FM modulation is but one method by which a subscriber can listen to satellite radio. The fact is that the receivers with FM modulators can also be hard wired, use a tape adapter, or even an aux-in jack. Are you truly suggesting that subscribers that use their radios without an FM modulator have their services suspended? Given the choices of installation methods, and the fact that the FM modulators offer the least desirable sound quality, as well as the fact that people seem to move to satellite radio for better sound quality, it is quite possible that 75% of the installs you feel are non-compliant actually do not even utilize the FM modulator.

Once again, this seems to be a request born out of frustration that people are freely making the choice to move to satellite radio in droves.

I would like to express that I can understand your frustration, but also feel compelled to inform you that it is YOUR actions (or perhaps inaction is a better term) that put you in the position you are now in today. The industry that you once laughed about at NAB cocktail parties is growing much faster than you anticipated. It is a bigger threat than you ever anticipated. It is more of a success than you ever anticipated. What scares you more than anything else is that the BIG PICTURE 5 years from now is looking bleaker for the NAB with each passing day. It is little surprise that you have taken the road you have chosen. The tactics of attacking the FM modulators, as well as the carefully placed stories designed to make it appear that satellite radio has “peaked”, or that people dislike the services are desperate measures, but we all know that you are in desperate times.

In closing, I would like to give you a bit of advice. The sooner you understand the ROOT CAUSE of your problem, the better off you will be. Satellite radio is not your problem. Your problem lies with poor programming, to many commercials, and an overall uncaring attitude towards the consumer. Had you addressed these long before now, satellite radio would likely not have even been a consideration for consumers. It is obvious by the fast growth of satellite radio, that there are many who are dissatisfied with the product you offer. It is a sad commentary that your choice is not to improve your own product, but to instead attack what is obviously the better product.

I will be watching with great interest the developments of what I would now anticipate to be vast improvements in the quality of the product delivered by NAB members, and look forward to seeing the next logical step……improved programming on terrestrial radio.

Best Wishes

SSG

9/21/2006 09:28:00 PM

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