Radio from the sky Satellite: Think of this still-unavailable technology as pay-per-listen.


You've got your satellite television. You've got your satellite telephone. You've even got your satellite Internet service, which transmits Web pages to your personal computer.

What in the world could be next?

Try satellite radio.

In the next two years, two companies each plan to bring 50-channel digital satellite radio to an American audience, especially to people in their cars. A third company aims to deliver what it calls "information affluence," through scores of music and news channels, to Africa, Asia, the Middle East, and South America.

The U.S. services plan to charge $10 a month to subscribers, who will need a $200 antenna and radio, or a tape-deck plug-in device.

Think of it as cable radio. Pay-to-hear. Satellite TV for your ears.

And the most obvious question is: Why would anyone pay for something that can be gotten now for free?

Ask this of David Margolese, 40, who has pursued the vision for eight years as the chairman of CD Radio, and he says: Think cable TV.

"The same question was asked of television in the late '60s, the early '70s, when it was 'free,' " Margolese says. "Remember those six channels and the rabbit ears? But cable came along and delivered high-quality pictures and more choice. And we see the result of that."

Lon C. Levin, the 43-year-old president of the American Mobile Radio Corp. in Reston, Va., remembers growing up on Long Island, listening to stations such as WNEW-FM in New York City play album sides and long, uninterrupted musical works.

"We intend to do what FM radio did in the '60s and '70s: cater to young adults," Levin said. "They were the ones that could play 'Tommy' from beginning to end. You just don't have that any more."

He added: "We are offering greater quality and an overwhelming amount of more choice - and, in a sense, an overwhelming amount of availability."

With satellite radio, the same stations can be tuned in anywhere. So if following your bliss means loading up the VW microbus and piloting it cross-country, you can groove to Yanni - or Bach, Bird or Elvis - from Bangor to Burbank. (Not, however, from Terra Haute to Tierra del Fuego: The U.S. services will not use the same frequencies as WorldSpace Corp., of Washington, which will serve South America and other international locales.)

CD Radio plans to offer 30 channels of music and 20 of news, sports and information. The musical lineup (as on its Web site, includes channels for symphonic music, chamber music and opera, contemporary jazz and classic jazz, Latin ballads and Latin rhythms, Broadway's best, and reggae.

American Mobile Radio, a subsidiary of American Mobile Satellite Corp. - - which is about a year behind CD Radio in planning, anticipates roughly the same mix of channels. It plans to lease some channels to outside programmers.

Satellite radio has been compared to the digital music channels that run on some cable TV systems. Cable's music services are seen as having mixed success. Margolese said the $10-a-month digital audio channels are purchased by a half-million people, or 2.5 percent of those to whom it is available, which he finds encouraging.

The satellite radio companies say that because they're not local, they shouldn't affect AM/FM radio's role as a local news and program source. But they say they do see underserved musical niches.

Of the 30 musical formats CD Radio plans to offer, Margolese said, 17 are not available in the nation's biggest media market, New York City. Those 17 formats - including operas, Broadway tunes and reggae - represent more than one-quarter of all record-store purchases, he said.

In an interview in the fall, Reed Hundt, the outgoing Federal Communications Commission chairman, was asked what could be done about Philadelphia's loss of its only classical music station, WFLN-FM, and the declining diversity of music. His response: "Satellite radio."

CD Radio says its music stations will be ad-free, though it will run national advertising on its talk stations, which will include Bloomberg News Radio and C-Span's radio service. American Mobile expects to run ads on all its channels.

"I don't believe people are averse to commercials," Levin said. He said that people only mind a lot of advertising, and that his company will have fewer than on commercial radio.

CD Radio, which is building headquarters and programming studios in New York, plans to transmit radio signals to a pair of satellites 22,300 miles above the Earth in geosynchronous orbit. The satellites will retransmit the radio signals to Earth at a frequency of 2.3 gigahertz, in the so-called S-band.

The company has developed a silver-dollar-size, adhesive-backed antenna that can be stuck on a rear car window (it will be destroyed if someone tries to pry it off). It sends the wireless signal to a radio card, a tuner-display device that pops into a dashboard cassette or CD player.

CD Radio is aiming for drivers, including the 34 million people who commute one to two hours a day. In addition to a plug-in card that can be used with conventional radio-tape decks, they hope to see electronics-makers produce car stereos that integrate S-band radio. American Mobile hopes to capture the boom-box and home markets with portable radios.

Unlike the satellite TV services, each of which requires a different receiver, the DARS companies are supposed to be developing receivers that can pick up either service.

The biggest problem with satellite radio is that it requires a direct line of transmission from the satellites to the antenna, which is difficult to achieve in cities and many suburbs.

To remedy that, CD Radio and American Mobile are seeking final FCC approval to build hundreds of Earth-based transmitters or repeaters, to blanket the 40 largest radio markets with their signals.

Broadcasters have fiercely contested those plans. John Earnhardt, a spokesman for the National Association of Broadcasters, said that putting up repeaters would be no different than building radio transmitters across the country: "If it's satellite, what's the purpose of putting stations all over the ground?"

"It's really diabolical," said Levine, the president of Mount Wilson FM Broadcasters, which owns KKGO-FM in Los Angeles and two other radio stations. Levine said the network of ground-based systems would almost flip the original concept of satellite radio on its head by creating a coast-to-coast ground system with satellites filling in the rural areas.

The satellite companies reject that argument. CD Radio is spending about $700 million, only $50 million of which is on land equipment, Margolese said. Existing businesses have always fought threatening new technologies, he said - AM broadcasters opposed FM radio, and TV broadcasters opposed satellite TV.

Consumer-electronics manufacturers also have argued that the new radio systems won't work, saying that S-band signals are difficult to receive and would require large investments. "If they ZTC succeed, we sell radios," said Gary Shapiro, president of the Consumer Electronics Manufacturers Association. "But based on tests we did we don't see how they can pull off a service like this."

The satellite companies contend that the FCC says, and their own tests show, that the systems can work.

Ultimately, the real test will be with consumers.

Pub Date: 5/11/98

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