Clarifying the Critics Side of NAB's PRA Proposal

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AG News: Friday - 8/27/2010

Clarifying the Critics' Side of NAB's PRA Proposal

Dennis Wharton, NAB Executive Vice President of Communications, penned a rebuttal to "critics" of that organization's proposal to include FM chips in cell phones as a requirement for radio accepting its own Performance Royalty Act proposal. Perhaps a rebuttal to the rebuttal is in order, as there are elements within Mr. Wharton's response that are mixed with "facts" having nothing to do with what critics charge.

I take this challenge because there is blame left to go around; there are charts pointed to that leave other charts (and information) out; there is logic used which is illogical when the full story is considered; and there is incomplete data offered to convince the choir that NAB has been in this fight since the beginning.

You may sum this up as being similar to HD Radio's battle for space on the dashboard, beginning seven years after it needed to be started.

Mr. Wharton, I understand your frustration. Meeting a brick wall with an idea you consider optimum is something I am familiar with since first trying to discuss how the internet - and its digital partner, the cell phone - started banging on radio's door in 1997. Countless times warnings were given to radio industry leaders that there was a train coming down the track, and no leader took its seriousness seriously.

The internet is only one side of this issue. But it's important because Performance Royalties were first, painfully, introduced to it at a time when NAB, RAB, and all of radio industry's executives (despite the warnings that the fight would be on their doorstep in a few years) believed "we'll just keep our mouths shut and hope these outlandish royalties shutter a nascent internet radio industry."

PRA has arrived in the broadcast circle carrying a stack of problems that have forced NAB, in closed door meetings with musicFirst, to bang out a "proposal" for acceptance. Let's keep in mind that NAB has said over and over "...no agreement has been signed with MusicFirst, which represents the labels in the talks, and that negotiations are continuing." I read this as: "Here's what we propose, though musicFirst has not signed off on it yet - the points you just read will probably change."

With this being the case, what is it that NAB is using its biggest drum for? The placement of an FM chip in cell phones as prerequisite to any consideration for agreement to PRA.

Let's look at just a few of Dennis Wharton's claims, meant to silence critics of this approach. The "facts" used are skewed, and in some cases not facts at all.

Fifty-four percent of people in a study said they would listen to local radio more if they had a radio-enabled mobile phone. Read the study here (and see slide 62 for details).

Left out is a mention that this Alan Burns report is about women aged 15-54, who listen to AC and CHR radio formats. Nor is it mentioned that slide 64 contains three quotes having a more profound effect on the industry: a) Radio’s future is in jeopardy with young people. b) Wi-Fi in cars is also a major threat to radio usage. c) Better content addresses all of those problems.

A 2008 study from TNS found that 45 percent of mobile users in Latin America and Asia cite AM/FM radio as one of their top three reasons for purchasing a mobile phone....

It could be said that radio has a distinctively higher level of relativity to peoples' daily lives in countries other than the United States.

A 2008 study commissioned by NAB’s technology advocacy program, NAB FASTROAD, concluded that the growth of FM capability in mobile handsets is “very robust” from a global perspective, and expected to reach 45 percent by 2011.

Global is not what you want to base your data on because of this fact: Radio stations in all other countries pay a Performance Royalty - the few exceptions include Iran and North Korea (besides the United States).

Radio serves as an information lifeline during times of crisis.

For each mention of 9/11 and Katrina, you'll find dozens of times that local emergencies were not met with a response deemed acceptable by residents. Your example of "Snowmaggeddon 2010" has its own detractors - here's but one. I've written about my own experiences seeking emergency information on radio here.

Cell phone subscribers deserve access to radio’s free service.

See Above: "...lifeline during times of crisis."

So what’s motivating critics to oppose the inclusion of radio receivers in cell phones? It could be a simple case of anti-competitive behavior.

Or, it could be an example of the radio industry scoffing at digital's importance through the years, but then the "new kids" grew up.

The WARN Act, signed into law nearly four years ago, established a process by which cell phone providers volunteered to devise a system for reaching their subscribers during times of emergency. The cell phone industry’s answer to date has been a text-based system limited to 90 characters, which has still not been deployed.

Please read "EAS, IPAWS evolve to meet government mandates" in "Broadcast Engineering." It outlines "The Integrated Public Alert and Warning System" (IPAWS), our nation's latest emergency notification system which uses cell phones, computers, mobile devices, web pop-ups, RSS feeds, broadcast, etc.

Relative to your "Curious what a 90-character emergency text might look like? Here are two possibilities..."

Leave out the extemporaneous words in your example (at left) and it's easily envisioned how consecutive text messages would work to convey an emergency message. Youth does it all the time, describing personal activities.

As for your other example (posted at right), it seems to carry information needed to push cell phone owners to a broadcast outlet - if that, as you claim, is your major concern.

I could go on with the inequities by comparing Arbitron PPM data with diary results, making arguments that the number of people listening to radio today is suspect. But I won't, because of this simple "fact" which is at the apex of the PRA argument: Radio Industry leaders and NAB ignored warning signs of a change in media consumption until it was too late.

While it would be advantageous to the radio industry to have a chip mandated in all cell phones, the forces at work to prevent it from happening are far above a simple government legislation. (BTW: Where are those 240+ Representatives who signed the "Local Radio Freedom Act"?)

Had you and your peers taken heed when calls were first made, starting this discussion years ago at The NAB Radio Show, there would be no fight against PRA now. You would have found negotiating with cell phone manufacturers for chip inclusion much easier early on. And NAB would be backed by a unified chorus of media, pulling hard to prevent a performance rate from being imposed on broadcasters.

But everyone in radio sat silent, and now radio leaders find themselves speaking to the choir about a topic other industries consider not their problem. This doesn't make them critics, but it does show them acting in the same way that broadcasters responded when others called on NAB for help - "It's not my problem." How can you chastise this response?

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From: Rusty Hodge
Soma FM

There is no way that handset manufacturers will allow a power-hungry IBOC chipset in their phones. If they're forced to, they'll surely include a way to disable it. What they should be rallying behind is a version of DVB-H that's audio only (which I recall Qualcom has demonstrated) using standard audio encoding technologies (AAC/AAC-HE) already optimized in cell phone chipsets.

Cell phone users don't want EAS alerts for every Amber Alert that goes out, or every alert that targets a small geographic area.

From: Greg

I believe this all a ruse to open to door to a potential, future HD Radio chipset mandate on mobile devices, and Ryan at Orbitcast picked up on it, too: 'And though the NAB won't say it, this type of mandate paves the way for requiring that HD Radio chipsets be included in mobile devices. Future-proofing yet another failing medium.' - http://tinyurl.com/2cobh9r

With many of the NAB/NRSC Board Members as investors in iBiquity, this makes perfect sense. The NAB, with its support of IBOC and allowing IBOC interference, has been willing to throw analog under-the-bus. iBiquity is desperate for an IPO, and getting HD Radio onto mobile devices would provide the perfect excuse.