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Long Live the King - Broadcasting & Cable

Long Live the King

Committed to the First Amendment
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In one audacious move, Howard Stern last week told the FCC and his misguided radio foes to shove it. His deal with Sirius Satellite Radio was genius—a flipping of the bird to sanctimonious regulators and wimpy radio execs who wanted to dethrone the King of All Media. They censored Stern—and drove him into a $500 million payday. Now he's even talking about brokering a deal where his current bosses at Viacom buy Sirius.

Yes, it was about money and a massive ego, but it was also about a regulatory climate that said, "We don't want you."

We don't think it was any coincidence that Stern's announcement coincided with the National Association of Broadcasters Radio Show in San Diego. At that blabfest, NAB President Eddie Fritts exclaimed, "There is a terrific buzz surrounding this convention." Sure, there was. It was the sound of thousands of radio execs wondering if their industry was dealt a severe blow by a howling FCC that badgered Stern on indecency and got nervous owners like Clear Channel to march to a new, timid drum.

If Stern brings only a fifth of his fans, Sirius will be making good money, and over-the-air broadcasting will become less relevant as a marketplace of ideas, particularly those that don't pass the government smell test.

From an FCC that talks about bridging the technological divide between the haves and have-nots, Stern's decision is weird irony. The consequence of the commission's stifling of edgy and extreme, or just mildly offensive, speech has been to create a divide between free and pay media.

With Opie & Anthony on XM, Stern headed for Sirius, and—so we've heard—Bubba the Love Sponge talking with one or the other, there may soon come a day when the only way to hear authority tweaked and conventional taste offended is to pay for the privilege. The founding fathers that conservative politicians love to invoke fought and died for the privilege of offending authority. (Back then, it was the King of All Britons.)

The unintended consequence of driving offensive speech to pay channels will have been to create a competitive satellite-radio industry. Said one Wall Street analyst, "We think this deal will likely transform satellite radio into a much more competitive industry and provide tremendous momentum to Sirius' business." A little buzz about that at the NAB Show, too, we bet.

Satellite radios will eventually become standard equipment on millions of cars. We can see lots of commuters who pay 4 bucks for a latte paying $12.95 a month to keep the Stern morning rush flowing as well.

As it turns out, Congressional attempts to boost FCC fines appear to be dead until at least next year. It hardly matters. Damage has been done, with broadcasters caving and the FCC cracking down after being hauled before Congress.

Washington's actions had a surprise ending. Stern's defection made a business out of fledgling one and weakened the old radio business censors were trying to "fix."

Free enterprise. Free speech. Sweet revenge. Kudos, Howard.

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