Open access satellite radio

Submitted by acohill on Mon, 02/19/2007 - 10:48

The impending merger of XM and Sirius satellite radio providers is a good example of why open access networks make sense. Sirius and XM have not grown as expected, largely because the two companies provide redundant and duplicative systems. Nobody cares about which satellite a radio station comes from, and people particularly do not care to spend hundreds of dollars on special radios that only work with one provider. If we were doing this with TV, we'd all have to buy one TV to watch NBC, and another TV to watch CBS.

That's the current satellite radio model. It is also the current broadband model. Want to use Verizon's VoIP telephone service on your Comcast cable modem? Good luck. You have to switch to Verizon broadband, install different equipment, and pay different rates before you can even talk about getting what you want, which is dial tone.

The correct business model for XM and Sirius is to merge, and then sell channel access to the highest bidder, on a level playing field. In other words, the merged Sirius/XM becomes a neutral carrier for hundreds of channels of music, news, and entertainment, and the business model is to make a small amount of revenue share on each channel. With a little tweak to the radios we buy to get this entertainment, we could buy on a per channel basis instead of getting 150 channels when we really only listen to 4 or 5 on a regular basis. Bundling content (the radio channels) with the infrastructure (the satellites) is a Manufacturing Economy business model. There are better ways to make money while simultaneously giving buyers of content (us) more choice.

The same is true of broadband. Communities should build a single integrated digital road system that any service provider can use to deliver goods and services. Done right, telecom costs will go down while everyone selling services will make more money. And the community will also share in the revenue for providing the transport system, just like Sirius/XM should do.