The FCC today issued a Notice of Inquiry into the use of the Portable People Meter technology of radio audience measurement now being rolled out by Arbitron in radio markets throughout the country.  Several months ago, various groups petitioned the FCC for an inquiry into the PPM, contending that it has certain methodological flaws that undercounted particular groups, including minority groups, and thus could have an impact on the financial viability of the stations listened to by such groups (see our summary  of the petitions and the issues raised by these petitions).  The Notice of Inquiry asks about those perceived flaws, about the potential impact of any flaws on the use of Arbitron market definitions for purposes of the FCC radio multiple ownership rules, and on the more general question of whether the FCC even has the jurisdiction to regulate the use of the PPM.

Specific questions on which the FCC seeks comments include:

  • Does the use of this technology really undercount minority populations?
  • If so, what has been the impact on the economics of minority-formatted stations in markets where the system is in use?
  • Are there specific information gathering techniques that should be improved in the PPM system?
  • What has been the effect on the PPM system of settlements between Arbitron and the Attorneys General of several states – where Arbitron promised to change its sampling process?
  • What is the impact of Media Ratings Council accreditation for the PPM in certain markets, and its lack of accreditation in others?
  • Do the questions about PPM reliability have any impact on the use of Arbitron to define radio markets for FCC multiple ownership purposes?
  • What is the FCC’s jurisdiction to review Arbitron’s practices in connection with the PPM? 

Details of these questions can be found in the FCC’s Notice of Inquiry at pages 12-17.

The last question – as to whether the FCC has authority to conduct this inquiry – is perhaps the most important, and likely to be the most controversial.  The Commission asks if its authority is based on the use FCC’s use of the data for multiple ownership purposes?  Or is the jurisdiction based on the fact that tones are broadcast within the broadcast signals in order to make the system work?  Or is there inherent authority for the FCC to investigate any business that is so "intertwined" with the broadcast industry that the FCC regulates?  No doubt, opponents of the inquiry will suggest that the FCC voluntarily picked Arbitron for multiple ownership market definitions.  They will probably also contend that inclusion of the tones in the signal does not give the FCC the authority to regulate the receivers of the data and what is done with that data once transmitted.  And finally, there will no doubt be arguments about how far the FCC’s inherent authority extends.

These questions will be argued in the comments filed by the interested parties.  Comments will be due 30 days after this notice is published in the Federal Register.  Replies will be due 30 days later.