Wednesday, October 08, 2008

HD Radio - Hall of Shameless

So Representative Ed Markey has introduced H.R. 7157, the Radio All Digital Channel Receiver Act, on the House floor. The bill's title makes the proposed legislation seem straightforward enough -- who could be against ensuring the public has unfettered acess to all bradcast digital media?

And the goal seems worthy. Now that XM and SIRIUS have merged, there is only one satellite radio service. So forcing the inclusion of an HD Radio tuner into the satellite radio receiver should help break that monoply, right?

Well, there's two things wrong with this.
  1. Satellite radio isn't a real monoply
  2. The legislation supports another monoply

Satellite radio isn't a real monoply
Sure. If you want to get audio broadcast from a satellite, you now only have one choice. So what happens if you chose not to pay the subscription fee? Are you totally cut off from news, music, and sports?

Hardly. There's AM and FM radio, your CDs, your MP3 player, your Internet radio (if you're at home), MP3s stored on your phone, etc. Further, because you don't subscribe to satellite radio, you'll never see a satellite radio tuner -- only subscribers have to purchase one of those.

Now compare that to, say, the electric company. If you choose not to pay the electric company for power, are you totally cut off from electricity? Well, yeah, pretty much.

If the electric company raises its rates, then you just have to dig deeper to pay them. If satellite radio raises it rates, you just cancel your subscription -- there's plenty of other entertainment options out there.

The hidden monopoly
One company -- the iBiquity Digital -- owns all the patents involved with HD Radio technology. So every manufacturer who builds an HD Radio transmitter has to pay a royalty to iBiquity. Every manufacturer who builds an HD Radio for the consumer has to pay a royalty to iBiquity. Every manufacturer who adds an HD Radio chipset to a component has to pay a royalty to iBiquity. Every HD Radio chipset manufacturer has to pay a royalty to iBiquity.

Now the general public has shown little interest in HD Radio, so cash hasn't been flowing into iBiquity in the torrents they expected. But what if every satellite radio tuner had to also have an HD Radio tuner? Well, by piggybacking onto those sales, iBiquity picks up a nice amount of cash -- perhaps even enough to cover their investement in senators and representitives.

I'll be writing my congresscritters instructing them to oppose this legislation. And just to be clear, I'm doing this on principle -- I don't subscribe to satellite radio and have no plans to do so in the immediate future. But getting the government to legislate revenue for a company that can't get it in the general marketplace is just plain wrong.

- Ralph

Day 115 of the WJMA Web Watch.

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