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.Continue Reading FCC Begins Formal Inquiry Into Arbitron PPM Audience Measurement

Last week, the FCC released a Public Notice asking for comments on whether it should begin a Section 403 investigation into the use of Arbitron’s Portable People Meter ("PPM").  A coalition of broadcast groups, the "PPM Coalition," principally comprised of broadcasters providing service to minority communities, sought the investigation as a way of delaying the implementation of the PPM technology next month in a number of large broadcast markets.  In their request, which can be found on the Minority Media and Telecommunications Council website, the PPM Coalition argues that the investigation is justified based on the Commission’s objectives (and various administrative and legislative mandates) to improve minority ownership in broadcasting.  The PPM Coalition contends that methodology problems in PPM implementation result in artificially low ratings for minority owned stations.  These parties argue that, if the system is implemented, a number of minority-programmed stations will disappear.  Arbitron has argued that the Commission does not have the jurisdiction to regulate ratings services (who are obviously not FCC licensees) or the methodology that they use.  Comments on the request for an investigatory hearing are due on September 24, and replies on October 6 (two days before the PPM system is to be implemented in eight markets).

Section 403 of the Communications Act gives the Federal Communications Commission the power to conduct investigations of any complaint of any violation of its rules or of provisions of the Communications Act, or to explore any other matter relating to the provisions of the Act.  Such investigations are often conducted before an Administrative Law Judge, but can be conducted before the Commission itself, and allow the FCC to use full discovery techniques (e.g. document production requests and depositions) and to conduct an evidenciary hearing.  In the past, the process was used much more frequently.  It has been used both to investigate specific complaints of possible misconduct by individual licensees, and to conduct broader inquiries into business practices in a regulated industry to decide if FCC regulation was necessary.  For instance, in the 1960s, there was an investigation into network practices to determine if those practices required FCC action to regulate the network-affiliate relationship.  In recent years, the power has been rarely used, and when used has tended to relate to specific allegations of misconduct to determine if the FCC should bring some sort of enforcement action against a regulated entity.Continue Reading FCC Seeks Comment on Whether to Begin Investigation of Arbitron PPM – How Far Does FCC Regulatory Power Extend?