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At the NAB Radio Show in Dallas in September, FCC Commissioner Pai promised that the FCC would take action to revitalize the AM band (see our story here). For years, AM has suffered a gradual erosion in listening, as interference on the band has increased – not necessarily from other AM stations, but instead from background noise that is now part of the environment in most urban areas. This interference is caused by everything from fluorescent lights to plasma TV screens to various other electronic devices that are prevalent in the modern world. At the NAB Show in Las Vegas the week before last, Commissioner Pai reprised his discussion of AM improvements, this time moderating a panel of experts to discuss the potential remedies to the problems faced by the AM radio service. So just what remedies may be possible?

The panel set out several possible solutions to AM interference issues, all of which have potential downsides or problems. These include the following:

• — More FM translators for AM stations
• — Blanket power increases for all AM stations
• — A reduction in skywave protection
• — The adoption of a cellular architecture for AM stations
• — All-digital operation for AM stations

Let’s look at each of these options below.

The first proposal, for more FM translators for AM stations, is a quick fix. Obviously, it does not address the fundamental interference problems with the AM band as it does nothing to eliminate AM interference. But it would provide a way of extending the life of the AM stations that could get translators to serve their service areas.

The problem, of course, is getting enough FM translators for all of the AM stations. In larger markets, where the FM spectrum is already very congested, there is no real opportunity for new translators, as the FCC is finding in its attempts to insert LPFM stations into these markets. Even outside those most congested markets, the number of translators available in many markets is small, as the FCC limits AMs to using translators that are already licensed. While the current processing of the translators left over from the 2003 window may open up some new opportunities for AM stations, many of these translators are not in the right places, and the FCC currently limits the distance from which a more rural translator can be moved into a larger market.

There are waiver requests pending at the FCC (including something referred to as a "Tell City" waiver) that, if approved, would allow translators to be moved into markets where they are needed to operate on the frequencies that are available in those markets. There is also talk about a window for the filing of new translators that would be restricted to AM licensees, but such a window is likely not possible until late 2014 or 2015, after the upcoming LPFM window opens and closes, and the bulk of the applications filed in that window processed. But even if there was a window, or if the Tell City waiver process was approved, there still would likely not be enough translators to go around to meet the needs of all AM licensees. Moreover, this would do nothing to solve the underlying interference issues.

Another proposal that has been advanced would be for a blanket increase in the power of all AM stations to try to overcome the background noise that has developed on the AM band. While there have been proposals for a doubling of the power, the discussion on the NAB panel was that this increase probably would be insufficient to overcome the noise. International studies have been done that suggest that AM power would have to be increased by 4 to 10 times to truly overcome the background noise, especially in urbanized areas. Such power levels would create all sorts of environmental and RF interference issues, especially for stations in urban locations, and would also vastly increase operating costs. For these reasons and others, there are substantial questions as to whether a power increase really is a solution.

There have also been proposals to decrease the protection afforded to clear channel stations, to somehow decrease "skywave" interference (the skywave signal is the signal that AM stations have, especially at night, where the signal bounces off a layer in the atmosphere and can be heard at great distances from the transmitter site), and perhaps even to go to a more cellular architecture in AM with many low power transmitter sites to decrease the interference of AM stations to each other. These very technical potential solutions all would look at the reduction of AM interference from one station to another, but would do little to address the background noise issue.

A long-term solution that has been proposed is to go to an all-digital AM band. There has been some discussion of moving the digital operations to TV channels 5 and 6, which are adjacent to the FM band, but these channels are still used by some TV stations. For the foreseeable future, the FCC is also going to want to reserve these channels for TV use, especially in light of the potential TV repacking after the upcoming incentive auctions. The FCC has actually already taken comments on this proposal in a rulemaking and could move on this proposal tomorrow (see our articles here and here) , but the concerns of TV operators and the repacking after the incentive auction seem to have stopped this proposal in its tracks.

Going all-digital in the existing AM band also appears to be a viable solution. Inside Radio yesterday ran extensive coverage of the tests done by the NAB and certain broadcast groups on all-digital AM operations – essentially shutting off the analog signal and running the station just in a digital format on its current channel. See the report on those tests that Inside Radio posted here; That conversion seemed to offer significant relief from background interference, and clear coverage, especially in cars, for distances at or beyond the current analog coverage areas. The biggest issue would be the receivers for the digital signal. While IBOC receivers that are already in the marketplace for AM operations (the so-called HD radios using the Ibiquity system) would work for an all-digital AM station. But there simply are not that many AM/FM HD radios in the hands of the general public. On the NAB panel, someone suggested that there might be 20 million of such receivers in circulation by the end of next year – while there are over 400 million AM analog receivers that are currently in the hands of the public. Would AM broadcasters be ready to spend the money for a digital conversion, abandoning all their current analog listeners, in hopes that these folks would follow the station into a new digital world? It is a big question that needs to be carefully examined.

No doubt, these and other issues will be evaluated by broadcasters, broadcast trade associations and the FCC in the coming year. But the issue is now, thanks to Commissioner Pai, on the FCC's radar screen. Let's hope that the evaluation of these and other ideas proceeds quickly to address the issues that so many AM stations currently face.

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After Thanksgiving - everyone's thoughts turn to technology policy.  Well, maybe not everyone, but reading Thursday's New York Times, David Pogue wrote his column celebrating his 10th anniversary in the paper with observations about truths that he has discovered about the technology world.  Many of those same truths apply to broadcast policy, and are particularly relevant with a week coming up in which the FCC may take its first steps toward dramatically reshaping the media landscape as it considers the future of the television spectrum, and potentially repurposing some of that spectrum for wireless broadband.  Pogue's first observation was that new technology does not replace old technology - instead it merely provides more choice to the consumer.  He points out that TV did not replace radio, and that satellite radio didn't replace radio either.  Instead, these services became complements, perhaps eroding the audience of the established technology in some ways, and perhaps making the older technology redefine its mission, but the older technology survived, and remained relevant.  We've written similar observations about the future of radio - it's a technology that reaches masses with no incremental costs for adding new listeners - and is now and, for the foreseeable future will be, the most efficient way to reach large audiences with popular formats.

It is a similar story with other communications media.  And we sometimes over-react to short term trends believing that some audience erosion for a particular technology will result in its doom, when in fact it may just result in some form of re-invention.  In the last two years, we've seen print media go from being left for dead, to being part of one of the most talked about media deals of the last month - the merger between the Daily Beast and Newsweek to bring a print component to a new media darling.  Television, too, is not dead yet - it still the most watched source of video programming, whether distributed over the air or through some multichannel video transmission source, with over-the-air programming about to get a new take as mobile DTV begins its roll-out in the coming months. Recently, there has even been the occasional article about consumers "cutting the cord" - relying on over-the-air TV, supplemented by web video content, to drop their cable or satellite connection.  As Pogue suggests, all these media will continue to survive and offer choices to consumers.  But Pogue does not take into account the potential impact of a fundamental change in regulatory policy that intervenes to disrupt the natural progression of the marketplace.

At next Tuesday's FCC meeting, the Commission will begin its consideration of the future of over-the-air TV, as initially laid out in its Broadband Plan.  While we will see the specifics of the FCC action this coming week, they are rumored to include proposals to encourage the compression of the TV band - encouraging TV stations to move into the VHF band (apparently, despite laws imposed by physics, not by man, which have thus far dictated that these channels suffer from more interference and worse coverage than DTV stations that operate on UHF channels), to share channels (by multicasting programming now appearing on separate channels, perhaps in Standard Definition instead of true HD), and, in some cases, to surrender channels entirely in exchange for some share of auction proceeds from so-called "incentive auctions."   How these changes will be implemented will be seen after the meeting.  Assuming that the changes are voluntary options afforded to broadcasters and not mandates, the changes may assist in the natural evolution of television.  But, if mandated or otherwise forced (e.g. through spectrum taxes on some perceived value of the frequencies), then regulatory changes may artificially affect the natural progression of the media.

Pogue also notes his observation that people often have very personal reactions to technology, and those reactions can color their perceptions about whether change is good or bad - with two people looking at the same change but from different personal biases having completely different reactions to the same change.  We have noted that how a personal bias can affect the reaction to regulatory events, for instance in reaction to changes in rules regarding HD radio, with some detractors being the first to comment on any post we write about that technology, convinced that it will do nothing but degrade the FM band, while others see it as a way to bring new life to radio.  That same observation applies to the changes being considered for TV.  Some, apparently including many at the FCC, see broadband, and wireless broadband in particular, as the way in which people will receive entertainment and information in the future - essentially dooming TV as we have known it for the past 70 years.  Others see a renaissance of over-the-air television being upon us with the new potential of the Digital Television transition being recognized through new opportunities for programmers on multi-cast channels and, with mobile DTV just beginning to be rolled out, for new services that will reinvent the service for the future.  After all, it has been less than 18 months since the digital transition for over-the-air TV was completed.  Another truism we have heard about technology is that people tend to overreact to changes in the short-term, while underestimating those changes in the long term.  Of course, those long-term consequences are the most difficult to predict.  One hopes that the actions of the government in the upcoming week don't reflect the attitudes of a few who overestimate the impact of new technologies and artificially restrict the choices of consumers in selecting their own media future. 

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The FCC's January 2010 Order authorizing FM radio stations to increase power on their hybrid digital radio operations was published in the Federal Register on Thursday establishing the effective date of the new rules as May 10th.  As we wrote earlier, the Commission's Order allows stations to increase from the current maximum permissible level of one percent of authorized analog effective radiated power (ERP) to a maximum of ten percent of authorized analog ERP.  So as of May 10, 2010, eligible FM stations may commence operations with FM digital operating power up to -14 dBc (that is, up to a 6 dB increase), consistent with the existing IBOC notification procedures and with no further authorization from the FCC.  Eligible stations may simply avail themselves of the voluntary power increase, but must notify the FCC electronically of the increased digital power within 10 days of commencement using the Digital Notification form via the Commission's Consolidated Database System (CDBS).

The exception to the ability to increase power is super-powered FM stations, which, regardless of their class, are limited to the higher of either the currently permitted -20 dBc level or 10 dB below the maximum analog power that would be authorized for the particular class of station, as adjusted for the station's antenna height above average terrain. The Audio Division's web site contains an FM Super-Powered Maximum Digital ERP Calculator available here to assist super-powered stations with determining the maximum permissible Digital ERP. Licensees of super-powered FM stations must file an application, in the form of an informal request, for any increase in the station's FM Digital ERP.  For power increases over 6 dB, licensees will be required to submit an application to the FCC, in the form of an informal request, for any increase in FM Digital ERP beyond 6 dB.  Licensees wishing to operate with an FM Digital ERP in excess of -14 dBc must make a calculation and determine the station's max permissible Digital ERP as detailed in paragraphs 17 through 20 in the Order, available here. 

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This afternoon the Commission released an Order authorizing FM radio stations to increase power on their hybrid digital radio operations. This power increase is a welcome boost to HD radio operations and was eagerly awaited by many FM stations broadcasting in digital.  In a nutshell, the rule change allows stations to increase from the current maximum permissible level of one percent of authorized analog effective radiated power (ERP) to a maximum of ten percent of authorized analog ERP.  In raising the power permitted for digital radio operations, the Commission acknowledged that the current digital power levels are insufficient to replicate stations' analog coverage and that indoor and portable coverage are particularly diminished.  Building on proposals advocated by National Public Radio (NPR) and iBiquity, the Commission has provided for an immediate voluntary 6 dB increase in Digital ERP (except for super-powered FM stations, as discussed below).   In addition, stations will be allowed to seek authority for increases over 6 dB up to a maximum of 10 dB using an informal application process.

Once the Order becomes effective, eligible FM stations may commence operations with FM digital operating power up to -14 dBc (that is, up to a 6 dB increase), consistent with the existing IBOC notification procedures.  Stations availing themselves of the voluntary power increase must notify the FCC electronically of the increased digital power within 10 days of commencement using the Digital Notification form via the Commission's Consolidated Database System (CDBS).   The exception to this is super-powered FM stations, which, regardless of their class, are limited to the higher of either the currently permitted -20 dBc level or 10 dB below the maximum analog power that would be authorized for the particular class of station, as adjusted for the station's antenna height above average terrain.   The Audio Division's web site contains an FM Super-Powered Maximum Digital ERP Calculator available here to assist super-powered stations with determining the maximum permissible Digital ERP.  Licensees of super-powered FM stations must file an application, in the form of an informal request, for any increase in the station's FM Digital ERP. 

For power increases over 6 dB, licensees will be required to submit an application to the FCC, in the form of an informal request, for any increase in FM Digital ERP beyond 6 dB. Licensees wishing to operate with an FM Digital ERP in excess of -14 dBc must make a calculation and determine the station's max permissible Digital ERP as detailed in paragraphs 17 through 20 in the Order, available here.  

The revised rules will become effect 30 days after publication in the Federal Register, which will likely occur within a couple of weeks. There is a chance that the effective date of the new rules could be pushed back if the administrative review regarding the collection of data isn't completed before then, but that is not expected to be an issue here.  In any event, the Commission's Order states that stations can seek to commence operations with increased HD power of up to -14 dBc before the effective date of the new rules by filing a request for Special Temporary Authority (STA). So digital FM stations that are itching to increase their power ASAP should start working on a request for STA seeking to utilize increased power.

Finally, two additional notes, both dealing with the potential for interference. First, today's Order solidly rejected the suggestion by some commenters that Low Power FM (LPFM) stations were more likely to be affected by full power stations operating with increased FM Digital power and thus should be afforded greater protection from the blanket increase in Digital ERP.  Although the Commission in the past has seemed to be leaning towards affording LPFM stations greater protections (as we've discussed in previous posts), today's Order firmly states that "Analog LPFM... stations are secondary services, and as such, are not currently entitled to protection from existing full-service analog FM stations."  In rejecting the notion of special protections for LPFMs, the Commission stated that it viewed the protections sought by the commenters as a potentially "dramatic change in LPFM licensing rules and the relationship between LPFM and full-service stations."  In sum, "Licensees will not be required to take into account nearby LPFM stations in calculating permissible digital power levels in excess of -14 dBc."

Second, the Order adopts an explicit digital FM into analog FM interference resolution procedure for full-service FM stations.  If a full-service analog FM station is receiving verifiable listener complaints of interference within its protected contour from a digital FM station operating with a Digital ERP in excess of -20 dBc, the licensee of the affected analog FM station should contact the licensee of the digital station and the stations must work cooperatively to confirm the interference and to attempt to eliminate it using voluntary tiered FM Digital ERP reductions.  If the stations fail to reach an agreement on how to remediate the interference, then the affected analog FM station may file an interference complaint with the FCC's Media Bureau.  In order to file such a complaint, the affected analog FM station must have at least six reports of ongoing (not just transitory) objectionable interference and submit a map showing the location of the interference and details about the nature and extent of the problems.   

The Commission's Order notes that although there are approximately 1,500 radio stations operating in digital in the country today, notifications of new digital operations has been in decline for the past two years, meaning fewer stations have been commencing digital operations.  It will be interesting to see whether the increased power levels now permitted for digital radio will breath new life into HD FM radio operations. 

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Last month, the FCC released a Public Notice requesting further comments on the proposal to increase the power of HD radio operations.  We have written about that proceeding a number of times, including posts here and here.  The increased power for the digital radio signals has been sought by many broadcasters who believe that current HD radio power levels do not  produce strong enough digital signals to penetrate buildings and fully serve radio markets.  On the other hand, other broadcasters fear that the increased power for the digital signals will create interference to existing analog stations operating on adjacent channels.  Today, the FCC set the dates for the filing of these additional comments - comments are due on July 6, with replies due on July 17. 

While comments have already been filed on the proposal to increase digital power, the FCC has raised a number of specific issues on which it wants comments, especially in light of the studies sponsored by NPR in cooperation with a number of other broadcasters, which seek to do a comprehensive review of the interference potential of higher powered digital operations.  NPR is shooting to have that report to the FCC in September.  The specific questions raised in the new FCC notice are:

• Whether the FCC should wait to decide on the power increase proposal until after the NPR study is done
• Whether current operations by radio stations operating in HD, and the various tests that have already been run, demonstrate the need for higher power operation on a permanent or provisional basis
• Whether new standards of interference to adjacent channel stations should be adopted, and if the interference should also protect LPFM stations
• Whether there should be specific procedures adopted to resolve any interference issues that do arise. 

Many of these questions have been addressed to one degree or another in previous comments.  Other than the question of whether to defer any decision in the proceeding until after the NPR study has been completed, the one new issue raised in the FCC's request for comments is whether LPFM stations should be protected from potential interference from any HD radio operation.  LPFM, which was originally established as a secondary service where stations could be dropped in where they would fit and preempted if there was interference from a full-power station, are receiving more and more protections from incursions from other stations.  Here, again, the FCC is asking if these supposedly secondary services should be protected from uses from primary stations.

Interested parties should file their comments on the dates set out above.

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NPR Labs has announced that it is going to conduct a further study, financed by the Corporation for Public Broadcasting, of the potential of interference from a proposed increase in the power of HD Radio operations.  Last year, NPR had raised issues with the proposal by Ibiquity and a number of commercial broadcasters for power increases in the digital radio operations of FM radio stations.   At the end of last year, the FCC asked for comments on the proposal for increased HD radio power, and on NPR's concerns about the power increase.  As set forth in this week's NPR press release, the new study will be conducted in conjunction with other broadcasters in an attempt to arrive at a way to increase HD radio power without creating undue interference to the analog operations of existing stations.

While the FCC comment period in this proceeding has ended, the FCC is always willing to accept informal comments until a decision is reached.  The Commission is particularly interested in informal comments if those comments propose a way to resolve the conflict between parties to a proceeding.  If NPR is able, though this testing, to come up with a solution that will protect analog operations while allowing for a power increase in some or all HD radio operations, you can expect that the results will be reflected in the FCC's final action.  Thus, this study may have important ramifcations for the future of HD Radio. 

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Come the New Year, we all engage in speculation about what’s ahead in our chosen fields, so it’s time for us to look into our crystal ball to try to discern what Washington may have in store for broadcasters in 2009. With each new year, a new set of regulatory issues face the broadcaster from the powers-that-be in Washington. But this year, with a new Presidential administration, new chairs of the Congressional committees that regulate broadcasters, and with a new FCC on the way, the potential regulatory challenges may cause the broadcaster to look at the new year with more trepidation than usual. In a year when the digital television transition finally becomes a reality, and with a troubled economy and no election or Olympic dollars to ease the downturn, who wants to deal with new regulatory obstacles? Yet, there are potential changes that could affect virtually all phases of the broadcast operations for both radio and television stations – technical, programming, sales, and even the use of music – all of which may have a direct impact on a station’s bottom line that can’t be ignored. 

With the digital conversion, one would think that television broadcasters have all the technical issues that they need for 2009. But the FCC’s recent adoption of its “White Spaces” order, authorizing the operation of unlicensed wireless devices on the TV channels, insures that there will be other issues to watch. The White Spaces decision will likely be appealed. While the appeal is going on, the FCC will have to work on the details of the order’s implementation, including approving operators of the database that is supposed to list all the stations that the new wireless devices will have to protect, as well as “type accepting” the devices themselves, essentially certifying that the devices can do what their backers claim – knowing where they are through the use of geolocation technology, “sniffing” out signals to protect, and communicating with the database to avoid interference with local television, land mobile radio, and wireless microphone signals.

The FCC will also have to complete the digital transition of TV translators and LPTV stations, which are not bound by the February 2009 conversion deadline. The FCC will need to set a digital conversion deadline – a conversion that many translator and low power licensees are not looking forward to paying for, but which may be necessary to preserve their over-the-air viewership as the analog tuner becomes an historical relic.

 

Radio, too, has its own technical issues to deal with. The Commission will be faced with resolving proposals for increased power for HD Radio operations (In-Band On Channel or IBOC digital radio), which some broadcasters have opposed as holding the potential for adjacent channel interference. The Commission will also be faced with resolving proposals for making the measurement of AM antenna patterns easier but, on a most fundamental level, it has also been asked to recapture some of the television spectrum, including Channel 6 and possibly Channel 5, and to use that spectrum for new radio stations. While some worry about the increased competition that new radio channels could bring, others see the expanded FM band as a way to eliminate congestion on the current band – giving LPFM stations places to operate without restricting FM upgrades or endangering FM translators – and others have even suggested that some or all AM stations could be moved onto these channels. This is likely to be a long-term project, but one that may get serious consideration this year.

 

Programming, too, may come in for more review this year. The Commission’s rules, adopted a full year ago, requiring TV stations to document in minute detail their public interest programming on Form 355, has never been implemented, as the form has never been approved by the Office of Management and Budget as being in compliance with the Paperwork Reduction Act. As this form required so much new information, for no appreciable purpose, it seems unlikely that it could survive such a review. Thus, the Form may be revised before being implemented, or it may wait for new FCC programming rules to be adopted as part of the FCC’s localism proceeding, mandating some form of public interest programming, which could then be used to justify the collection of some data requested by the questions on Form 355.

 

Other aspects of the localism proceeding seem likely to be resolved in 2009. The proposal for a fully manned main studio during all hours of operation, located in the station’s city of license, seems to be less likely to be adopted as regulators realize the costs that such a requirement would impose. Yet requirements for some form of mandatory ascertainment of community needs, plus some enhanced disclosure of public interest programming, seem more likely. Some of the proposals rumored to be on the table include requiring that broadcasters be judged by whether they perform certain tasks set out on a menu of options by which they would demonstrate their service of the public interest. One would hope that any set of menu options would be broad enough to recognize all the diverse ways that broadcasters serve their communities, and not so restrictive as to make every station meet the public interest in the same cookie-cutter way, and thus eliminating diversity in approaches that has allowed the broadcast industry to flourish.

 

The return of the Fairness Doctrine, which many conservative pundits have predicted, is unlikely because of the constitutional and practical problems of implementation. Yet some fear that  mandated political coverage and issue-responsive programming, which is more likely,  may effectively take the place of the Doctrine. Restrictions on violent programming could also be at the top of the Congressional agenda, as Senator Rockefeller, the new head of the Senate Commerce Committee, has supported such regulation in the past. . 

 

In the advertising world, the FCC will be resolving its embedded advertising and product placement proceeding, where some “public interest” groups have advocated a total ban on such advertising, while others have suggested immediate sponsorship identification, through a crawl or superimposed caption, of any product for which consideration has been paid for its inclusion. The related issue of video news releases – whether stations have to identify on-air anything given them at no charge (e.g. a script, video footage, etc.) before its inclusion into a news report – will also likely be resolved. Some have also suggested that the Commission may be planning some adjustments to its payola rules, though what those changes would be, and how they would improve on the current rules, is hard to fathom.

 

There is also real concern that the Congressional committees which oversee the FCC may well push proposals for limits on prescription drug advertising. The new chairman of the House Energy and Commerce Committee, Henry Waxman, has favored a moratorium on such advertising while the industry works out rules that restrict various perceived abuses. If industry voluntary agreements don’t satisfy Congress, new restrictions on advertising directed to children are also possible, especially in connection with ads for food considered unhealthy (however that may be defined).

 

Copyright issues could also impact the broadcast industry this year – perhaps in ways more fundamental than any of those other issues listed above. For radio, we may see the webcasting royalties issue be resolved one way or the other. Congress has given webcasters and the recording industry until February 15 to settle the webcasting royalty issues and, if that doesn’t result in a resolution of the issue, the pending appeals will be argued this year and perhaps resolved by the end of the year. 

 

2009 will also bring about a renewed attempt by the recording industry to impose a performance royalty on broadcasters for their over-the-air signals, the “performance tax” as it has been labeled by the NAB. That performance royalty would require broadcasters to pay the recording industry and recording artists royalties for the use of music over the air – in addition to the ASCAP, BMI and SESAC royalties that are already paid to the composers. The recording industry was able to get that proposal through the House Judiciary Committee last year, and will make a renewed attempt to have it adopted by Congress. If such an attempt is successful, this could potentially result in the transfer of billions of dollars from broadcasting to the recording industry.

 

TV has its own copyright issues, as the law permitting Dish and DirecTV to import local broadcast stations into local markets must be renewed, and some have suggested that this might be the time to reexamine the must-carry and retransmission consent process for both cable and satellite. While nothing firm is on the table, this issue could arise just as retransmission consent fees are beginning to offer television broadcasters a meaningful new revenue stream.

 

All of these issues seem like plenty - but we haven't even discussed the resolution of the indecency cases currently pending before the Supreme Court that should come this year.  The Commission ended 2008 with several large EEO fines, and this year may bring the resolution of long-pending petitions for reconsideration of the current EEO rules, as well as resolution of whether the Form 395 Annual Employment Report  will make its reappearance and whether the information on the form should be available to the public to judge the EEO performance of broadcasters or should the information be used simply for industry profiling.  Commissioner Adelstein suggested that the information should be public in his concurring opinion on these recent fines.  The FCC's change in its multiple ownership rules to allow some broadcast-newspaper combinations is still on appeal as it becomes increasingly irrelevant (as newspaper companies don't have the money to buy broadcast station, and broadcasters probably don't want to buy newspapers), and other issues as to the local radio ownership rules and the attribution of TV JSAs are still pending and may be resolved one day - perhaps this year.  Even political rules may be revisited in 2009 - as the Commission has never issued rules implementing the BCRA requirements, and it also has a long-pending proceeding to determine how to assess spots sold by on-line auctions for lowest unit rate purposes. 

 

With these (and other) possible changes in the regulatory landscape, one can only hope that the government regulates with a light touch. While the Democrats who have been on the FCC during the Bush years have advocated tough, detailed regulatory mandates, the Obama administration has offered the hope of a less doctrinaire, more inclusive regulatory process. Given the economic outlook for the coming year, and the costs and likely disruptions of the digital transition, an administration that promises hope should deliver some to broadcasters simply by taking a break from excessive regulation to give everyone a chance to adjust to the new realities of 2009. But stayed tuned to these pages to see what develops in this new year. 

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The FCC has requested public comment on the proposal (about which we wrote here) to increase the power of the digital radio transmissions from 1 per cent of a primary station's power to 10 per cent of that station's power.  The proposal to increase power for stations using the HD Radio system is supposed to help overcome reception issues, especially in buildings and in areas with terrain obstacles.  The Commission pointed to the discrepancy between that request, which minimized problems that would occur from such a power increase in HD Radio's In Band On Channel digital operation, and the report issued by National Public Radio (about which we wrote here) that suggested that such a power increase would result in significant interference.  This proposal may well divide FM broadcasters between those who feel that it is more important to increase power to help digital broadcasts penetrate buildings and other obstacles, and those who fear that this increased power will interfere with their analog operations - particularly affecting stations operating on channels adjacent to stronger stations operating in digital or with a fringe signal in their target market.  Comments are due November 28, and replies on January 4.  As with any proposal on radio's digital conversion, this is bound to be controversial. 

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A recent proposal to increase the power levels at which HD Radio stations operate - to improve coverage and, perhaps more importantly, building penetration so that people can receive digital channels inside buildings - has been the subject of a cautionary study released by National Public Radio.  That study was summarized in a story in the NPR magazine Current (an executive summary can be found here, and the entire 280 page study is here).  The study agrees that an increase in power suggested by the recent proposal would increase HD Radio coverage and significantly increase building penetration, but it would do so only at the cost of causing interference to existing analog stations - in some cases significant interference.  Such interference would be especially troublesome in receivers in cars, where radio broadcasters have long concentrated some of their most important programming to capture people in the place where competing entertainment options are most limited.   

The NPR study does suggest that there could be ways to limit the interference using directional antennas or lessening power but using digital boosters that could be tuned slightly off-center on their frequencies to protect adjacent channel stations.  HD radio operates on the sides of a station's analog channel (thus its original name - "IBOC" for In-Band On-Channel), thus potentially causing interference to adjacent channel stations.  By suppressing the signal on the side of the signal nearest to the adjacent channel station and sending the digital bits out of the other side of the channel, some of this interference could be minimized.  Yet systems capable of such protections have not yet been fully developed.

NPR has been in the forefront of the development of digital radio, as it sees the vast opportunity for providing multiple streams of programming on a single FM channel, serving various constituents with varied programming.  See, for instance, our post on the services offered by Washington DC NPR affiliate WAMU.  Because of NPR's leadership on the issue, the caution reflected by this study may be given serious consideration.  As noted in the Current article, this topic will be discussed at panels at the NAB Radio Show in Austin next week - panels that may well be worth attending to hear the differing viewpoints on this proposal. 

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The FCC recently issued a Notice of Inquiry, asking if it should consider mandating that XM Sirius receivers also be able to receive HD Radio or to play material from other audio sources.  This proceeding was promised as part of the FCC's approval of the XM-Sirius merger, as a potential way of ensuring that competition in the audio entertainment marketplace remained robust after the merger.  While the Commission required that XM Sirius allow manufacturers to build receivers that could incorporate HD Radio or other audio entertainment technologies (e.g. MP3 player, Internet connectivity, etc), it did not require that any receiver contain such technology.  This proceeding asks if any sort of requirement along these lines should be adopted.  It also seeks information generally about the audio entertainment marketplace.

Specific questions posed by the FCC in this proceeding include:

• Would a mandate promote lower prices and more choices for consumers of audio entertainment?
• Should it be expected that audio devices with multiple audio entertainment capabilities will be developed without an FCC mandate?
• Would an XM Sirius radio with HD Radio capability promote dissemination of state-level EAS messages?
• How well has HD Radio been developing on its own?
• Would multi-function devices facilitate the development of HD Radio?
• Are such devices necessary for the development of HD Radio?
• What other public interest benefits, if any, would result from such a combinations?
• What technological issues would there be in multifunction devices (e.g. manufacturing cost, battery life, size and weight, interference, etc.)?
• If a requirement was adopted, how long would any required phase-in period need to be?
• Should any requirement cover all radios, or just certain types (e.g. in-car, portables, home receivers, etc)?
• Does the FCC have the authority to adopt any such mandate?

That last issue, the FCC statutory authority to adopt rules in this area, is a general question considered in several other recent FCC proceedings (for instance, see out post here).  Just because the FCC might think that something is a good idea does not mean that it can adopt rules in an area.  Rules requiring that equipment manufacturers take certain actions have run into problems in the Court of Appeals in the recent past as the FCC has only limited jurisdiction over such manufacturers, so any mandate here will need careful justification or perhaps even a specific statutory mandate.

A Notice of Inquiry is but the first stage of the adoption of any FCC rule.  After receiving comments in response to the Notice, the FCC will assess those comments, and decide whether or not to propose specific rules, which would be contained in a Notice of Proposed Rulemaking - requiring further public comment and further FCC consideration.  Comments in this proceeding are due 60 days after its publication in the Federal Register, with Reply Comments due 30 days later. 

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In a proposal filed by many of the nation's largest radio broadcasters, a request was made that the FCC allow FM stations operating with the HD Radio (or "IBOC system" - for "In Band On Channel" as the digital signal is transmitted on the same channel as the current analog signal) to increase power by up to 10 dbu, which is said to be less than 10% of a station's authorized analog power.  The proposal cites the power increase as one that, in most cases, can be made without interference to adjacent channel stations.  In certain instances, particularly those of grandfathered short-spaced stations, only certain lesser power increases would be permitted under this proposal.  The proponents contend that the increased power will help stations replicate their analog service and increase building penetration so that the service can be received inside large office buildings and even in parking garages.  The proponents submit engineering studies that support their position.

I have worded this post very cautiously.  We write about many significant and controversial issues on this blog - e.g. indecency, music royalties, multiple ownership rules - but the most animated responses we usually receive is when a post deals with HD Radio.  While we have written about many broadcasters who have adopted the HD radio system and are using the multicast ability to bring new services to their communities, we recognize that there are many critics of the programming on HD Radio, or the design of the tuning functions on the radio, or for the lack of the consumer "value proposition" for the purchase of a new radio required to receive the digital transmissions.  However, we have found that there are also many who feel vehemently that there are engineering issues with the service.  So we post this notice of the FCC filing, and look forward to the response that we will receive.

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Last Friday, the rules on over-the-air digital radio for AM and FM stations - the IBOC system or, as it is commonly known, HD Radio - became effective.  The most immediate effect of the new rules, which we summarized here, is the ability of AM stations to operate using the IBOC system at night.  The Commission determined that such operation offered more benefits than any interference it might create.  The final rules also allowed stations to begin digital operations - and multicast operations - on a permanent basis without prior FCC approval.  As these rules take effect, some stations are beginning to look to the multicast channels to provide new programming opportunities.

NPR has, in many ways, led the efforts to utilize digital radio for multicast operations.  In today's Washington Post, there is an article about the city's NPR affiliate, WAMU, which has recently announced plans to take its multicast operations to a new level.  WAMU had in the past programmed a substantial amount of bluegrass music, a local DC favorite.  Over time, that programming had been reduced as the station broadcast more and more talk programming.  The station had moved bluegrass to a full time Internet radio stream, and has now announced plans to move all of the remaining bluegrass and roots music programming (which had been limited to Sundays) to one of its IBOC digital multicast streams - and to include live announcers during at least some of this digital programming.  The Post article quotes the station manager as saying that the local Best Buy now knows that HD Radio is different from the service that XM or Sirius provide.

The lack of consumer awareness of HD Radio has been something that many critics of the service have written about repeatedly.  Mark Ramsey's Hear 2.0 blog has repeatedly lamented the tepid consumer response to HD Radio, most recently pointing to satellite radio's push to get new subscribers through having their radios as original equipment in new cars, and suggesting that HD Radio should be looking to market in similar fashion.  Many critics have contended that the service needs a value proposition - something that gives consumers a reason to seek it out.  Perhaps unique programming efforts like that of WAMU can provide that value.  The NAB is itself taking steps toward promoting such efforts, announcing that it is awarding two stations HD Multicast Awards at the Keynote address of the upcoming NAB Radio Show in Charlotte.  Perhaps with the effective date of the new rules and efforts like that of WAMU and the stations to which the NAB is giving awards, this new service will realize its potential and provide a return on the investment now being made by hundreds of stations throughout the country as they initiate their own digital transition.

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