Two satellite radio companies won temporary licenses on Monday to use ground-based repeaters to expand the reach of their new digital radio services designed primarily for vehicles, despite the protests of mobile telephone carriers.
XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. need to use ground repeaters to bounce signals from satellites to actual radio receivers in order to provide service to hard-to-reach areas like major downtown areas where skyscrapers block direct lines of sight.
XM Satellite plans to launch 100 channels of service in the Dallas-Forth Worth and San Diego markets Sept. 25, almost two weeks later than scheduled. It delayed the start of service after attacks on the World Trade Center and the Pentagon.
With the new temporary licenses granted by the Federal Communications Commission on Monday, the company plans to offer subscribers nationwide service in November while rival Sirius plans to launch its own service sometime during the fourth quarter.
The use of repeaters has drawn fire from telephone companies, including BellSouth Corp. and AT&T Wireless Services Inc., which are concerned the devices could interfere with portions of the radio spectrum they hold.
The FCC has yet to develop rules for the use of ground-based repeaters and XM Satellite and Sirius asked for temporary authority to use repeaters until the agency draws up the final rules.
“We are grateful that the FCC has moved so expeditiously in the face of the tragic events that have obviously affected all aspects of government,” said XM President and Chief Executive Hugh Panero. “Now it’s time for new businesses like ours to show that the tragic events will not deter us.
Sirius had no immediate comment.
CONDITIONS ON REPEATERS
The FCC imposed conditions on the companies that will prevent them from turning on the ground repeaters until they have coordinated with wireless communications services providers like BellSouth and AT&T.
The satellite companies would have to reduce the power level or stop using any repeater if the wireless providers notify them of interference and XM and Sirius will have to make available the locations and technical parameters of the repeaters to the wireless users of the spectrum, the FCC said.
The temporary licenses will expire on March 18, 2002, or when the FCC adopts permanent rules on the use of ground repeaters, whichever comes first.
Washington, D.C.-based XM Satellite has said it plans to have about 50,000-60,000 subscribers by the end of the year, paying $9.99 a month for the service, and ratchet up to about 4 million customers by 2004.
The various channels will offer rock, pop, country and classical music as well as news. The company is focused primarily on offering service to automobiles but plans to add devices for home use.
General Motors Corp., the world’s largest automaker, plans to offer XM Satellite service in more than 20 car and truck models in 2003 and Porsche Cars North America (PSHG-p.F) has agreed to offer the service as an option in its cars.
The company primarily competes against Sirius Satellite Radio Inc., which plans to launch its own nationwide service in the fourth quarter of this year to cost $12.95 a month.
XM shares closed down $1.50, or about 15.3 percent, to $8.30, while Sirius shares closed off 70 cents, or 14.9 percent to $4 on Nasdaq. The overall markets were down significantly after trading resumed on Monday after having been shut for four days in the wake of Tuesday’s attacks.