Paul Gluckman

XM Satellite Radio, which previously had stopped short of forecasting it would reach 3 million subscribers this year, now believes it will exceed that by Dec. 31, the company said Thurs. as it released 2nd-quarter results. CEO Hugh Panero and other senior executives said they revised the projection because of strong subscription growth in the quarter, a strong 4th-quarter product mix and the strength of its programming package. XM programming got a boost in a separate announcement Thurs. that controversial shock jocks Opie & Anthony will be carried on a premium XM channel for an additional $1.99 monthly beginning Oct. 4. The XM “infrastructure provides the perfect platform for edgy radio talk-show personalities,” Panero said. XM boasted it had added 1.4 million subscribers the past 12 months and claimed an 81% share of total activated subscriptions in satellite radio. As of June 30, it had 2,100,352 subscribers, having added 418,449 in the quarter -- double the number added in the year-earlier period. XM will recover about $142 million in insurance payments after reaching a settlement agreement in July with insurers over a solar array degradation problem that has drastically cut the life expectancy of its 2 orbiting satellites, the company said in an 8-K report filed at the SEC. The settlement covered 80% of the claims made under policies in which the satellites were insured for $400 million against “constructive total loss,” minus any “salvage value,” the 8-K said. The company already has collected a significant portion of the $142 million, with most of the remainder expected by the end of Aug., it said. XM will go to arbitration, seeking to recover money under the remaining 20% of its claims. Plans still call for XM’s 2 existing satellites to be collocated in one orbital slot with the launch of its ground spare (XM-3). The XM-3 launch had been planned for late 2004, but may spill into early 2005, depending when a launch vehicle becomes available, the 8-K said.

In-band on-channel (IBOC) digital audio broadcasting (DAB) without content protection “will materially aggravate the harm” to the recording industry, the RIAA said in reply comments in the FCC’s inquiry on whether to impose copyright remedies. But there was significant opposition to RIAA’s call for encrypting the IBOC signal and requiring an audio broadcast flag in IBOC receivers. CE, broadcasters and consumer groups said the recording industry had failed to document a threat from IBOC, the FCC lacked statutory authority to impose a solution, and the Audio Home Recording Act (AHRA) and other legislation already protected the recording industry.

The CE industry’s first HDTV set-tops with ATSC tuners, HD PVRs and digital CableCARD readiness will be introduced by Sony in late fall, the company told reporters Thurs. The set-tops will be available in versions with 250-GB and 500-GB PVR capacities at $799 and $999, respectively, Sony said. The 500-GB DHG-HDD500 will pair dual 250-GB hard drives and offer the ability to record at least 30 hours of HDTV content and up to 20 hours of standard-definition programming, while the 250-GB DHG-HDD250 will allow 1/2 as much, Sony said. The models will offer new “iterations” of a TV Guide electronic program guide (EPG) that will support the digital channel map, Sony said. Greg Gudorf, vp in Sony’s Home Products Group, has said such set-tops would typify the innovation the CE industry could bring to unidirectional digital CableCard technology that ordinarily won’t support such features as EPGs and video on demand. The TV Guide EPG would be available subscription-free and delivered by over-the-air broadcast signal, Sony said. The models also will feature “flexible” video formats for meshing with a wide variety of displays. Their targets include the 10 million HD-ready TV households that lack an HD tuner solution and the 30 million digital cable homes with limited choices in HDTV set-tops and limited or no choices of HD PVRs. The Sony set-tops will have USB ports for accommodating future services, and component and HDMI outputs but no IEEE-1394 interfaces, Sony said.

Microsoft and the MPAA reached “a mutual understanding” on how Windows Media Digital Rights Management (WMDRM) can be used in software and hardware devices to protect “marked” content under the FCC’s DTV broadcast flag rules, they told the Commission in a joint ex parte filing. As a result, the MPAA and its member companies now support the bid to have WMDRM certified as an approved technology for broadcast flag applications. That marks a reversal for the MPAA and its member studios, which had opposed WMDRM on the grounds that it didn’t: (1) Place meaningful restrictions on the redistribution of content. (2) Contain adequate compliance or robustness rules. (3) Provide for effective revocation and renewability or for adequate enforcement. Microsoft and the MPAA told the Commission they believe the authorization of remote access to DTV content under broadcast flag “raises numerous interrelated and complex business, legal and technological issues that require careful FCC consideration.” As a “reasonable measure to address this issue” until a more comprehensive remedy can be found, the MPAA “recognizes Microsoft’s incorporation of specific local proximity content controls” in WMDRM as an interim solution, the ex parte said. The parties also agreed to continue working together “to develop even more effective and commercially reasonable technological means of achieving proximity control in future versions” of WMDRM, the filing said.

If the FCC bows to MPAA pressure to impose impractical restraints on the already-secure TiVoGuard digital output protection technology, it would “contradict” the Commission’s goals in the DTV broadcast flag proceeding and foster a result that wouldn’t be very consumer-friendly. So said TiVo in a white paper filed at the FCC in defense of its bid to win Commission certification of TiVoGuard as an authorized content protection technology for broadcast flag -- one of several technologies for which such certification is being sought.

Does the FCC have the statutory jurisdiction to impose content protections on in-band on-channel (IBOC) DAB radio, as the RIAA fervently believes it does, and so has an obligation to do so? Or doesn’t the Audio Home Recording Act (AHRA), enacted 12 years ago to thwart serial digital copying and compensate the creative community for sales lost to single-generation digital cloning of packaged music, preclude the need for IBOC content protections, as CEA, the Home Recording Rights Coalition (HRRC) and some consumer groups maintain?

The RIAA unveiled its plan to seek content protections at the FCC to thwart widespread piracy of music transmitted over the emerging in-band on-channel (IBOC) digital radio (DAB) services, in FCC comments.

Any FCC action that heeds the RIAA’s call for content protection on in-band on-channel (IBOC) radio would be unjustified and outside the Commission’s legal jurisdiction, CEA said in comments on the FCC’s notice of inquiry (NOI) on the copyright implications of digital radio.

CEA is a “strong supporter” of in-band on-channel (IBOC) digital radio, and believes the ability to transmit nighttime AM IBOC signals “is critical to the success of this exciting new technology,” it told the FCC in comments, urging full authorization of the service.

The NAB’s “spurious” petition asking the FCC to declare that satellite radio companies be barred from providing local weather and traffic reports is an attempt to “stifle innovation by restricting the types of services that satellite radio providers can offer,” CEA said in a filing at the Commission. NAB’s arguments “merely serve the economic interests of some terrestrial broadcasters, to the detriment of satellite radio listeners nationwide,” CEA said: “Technological innovation fuels the engine of the American economy and it is the lifeblood of the consumer electronics industry.” It said the traffic and weather services offered by XM and Sirius were “a prime example of this innovation.” As of Fri., when comments were due on the NAB petition, some 25,000 XM subscribers, spurred by an XM campaign, had inundated the FCC’s electronic filing board, virtually all asking the Commission to reject the broadcasters’ arguments. Most submitted single-page comments calling the NAB out of line for trying to restrict subscription content. One commenter, Patricia Mahoney, of Alexandria, Va., said it was the first time she had ever written to the FCC on her own behalf, “not on behalf of a client,” to voice an opinion in an active Commission proceeding. Mahoney, who has represented the Satellite Industry Assn. and Iridium in other FCC dockets, said she has lived in the Washington area almost 34 years and has “never found the free over-the-air broadcast stations even collectively to offer the variety and diversity of programming that I find on XM.” Among those supporting the NAB petition was a coalition of 41 state broadcast associations that urged the FCC to require XM and Sirius “to adhere to their commitments not to offer local services.” Only “truly local broadcasters know the communities they serve and thus meet the specific needs of their communities in ways no distant satellite provider could match or be permitted to disrupt,” the groups said. The “intrusion” of satellite radio into “the local radio-community symbiosis could cause disruption, confusion and even harm to local residents who depend upon radio broadcasts for careful and accurate local services, including news and weather,” they said. Separately, the Satellite Bcstg. & Communications Assn. (SBCA) said in comments that adoption of NAB’s proposed conditions banning locally oriented programming would violate the companies’ First Amendment rights. SBCA said the ban would be sustainable only if “it was a ‘precisely-drawn means of serving a compelling state interest.’ The Commission cannot satisfy this standard in this case because among other reasons, there is simply no evidence in the record that the traffic and weather service is causing harm to terrestrial broadcasters.” The SBCA said the Commission should also dismiss requests to regulate receiver technology.