Two major auto manufacturers are upset over suggestions that satellite radio makers XM and Sirius should incorporate HD radio technology into their receivers.  GM, Toyota, and other manufacturers oppose the plan because they suggest it would dilute the quality and competition among the evolving HD radio industry.  More importantly, because large manufactures already incorporate satellite radio receivers in most of their vehicles, and a transition spells more cost and headaches on a large scale.

According to PC Magazine, executives from General Motors and Toyota wrote a letter recently to the Federal Communications Commission (FCC) that stated; “While HD radio is successfully penetrating the marketplace, it is nevertheless still an evolving technology.  Any mandate will inherently distort the normal incentives to cost reduce and further improve the HD product offering.”

This stems from the proposed merger between Sirius and XM that the two companies have been fighting with FCC over.  Though both companies have agreed to certain conditions in order to gain approval of the merger, two senators earlier this month suggested that the companies go one step further and turn over up to 50% of their holdings to independent companies and integrate HD radio into all satellite radio receivers.

The auto makers argued that HD radio is successfully penetrating the market without any government interference. “There has been no showing in the record to support the proposition that if consumers continue to show an interest in HD technology that those manufacturers currently pursuing other entertainment strategies will not take notice and adjust their strategies,” the executives wrote.  “If there’s a mandate, the holders of intellectual property for HD would have no incentive to be fully responsive to the demands of the marketplace,” they concluded. It would “inherently distort the normal incentives to cost reduce and further improve the HD product offering.”

I honestly can’t see what the problem is.  I understand the FCC is concerned with providing strict mandates over both the satellite and HD radio industries, much like they have with television programing and distribution, but combining the two doesn’t make much sense.  In this case, I would have to side with the auto-makers.  By lumping the two technologies together, it more or less provides a free ride for HD radio to dovetail the success and technology of satellite radio.

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Entry was posted on Saturday, July 26th, 2008 at 11:55 pm under Music, Technology.

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