FCC CHOOSES TECHNOLOGY TO TRANSITION RADIO TO DIGITAL

FCC said IBOC would usher in digital radio more efficiently and rapidly than any other technology developed so far and would provide robust competition to other competing radio technologies, including satellite radio. Commission announced notification procedures that would allow AM and FM stations to begin interim IBOC digital transmissions immediately on voluntary basis. System was approved for daytime and nighttime FM use but for daytime AM only until iBiquity completed testing on nighttime interference problems. Company said it expected to complete testing this year and was confident results would allow FCC to complete its authorization of AM nighttime service in 2003.

“This is an amazing item,” Comr. Abernathy said of IBOC: “We don’t get that many items where it’s sort of a win-win for everyone and is a no-brainer to support it.” She said she was particularly pleased that during transition, consumers’ old radios would continue to work and they would be getting better service once they purchase new digital radio receivers. Comr. Copps called technology “fantastic.” He held out IBOC as example of how inter-industry competitive rivals could put aside their differences and work together. Companies involved in DTV transition would be wise to follow radio’s digital “model,” Copps said. Abernathy and Copps said they were eager to run out and buy new IBOC receivers once they became available next spring. Chmn. Powell said of FCC'’s action: “I think it’s a very proud moment for the Commission and a proud moment for the industry.” In presenting item to commissioners, Media Bureau Chief Kenneth Ferree called action “a historic order. It marks a coming of age of the original wireless technologies. Broadcasters were wireless before wireless became cool.” IBiquity CEO Robert Struble told reporters and analysts in conference call that Commission action came almost exactly 4 years after his company filed petition for rulemaking on IBOC, which he said was “blindingly fast by FCC standards.”

In joint statement, Comrs. Martin and Abernathy said technology held great promise for revitalization of AM radio. Both expressed some concern that it might cause some interference with existing services, in particular those serving blind or visually impaired, but said they believed impact would be minimal and that parties involved would attempt to resolve their differences without govt. intervention. “We are optimistic that, in the short term, interference issues can be resolved, and in the long term, the quality and availability of radio reading services will benefit from the technological advancements of digital audio radio service,” they said. Commission intends in further notice of proposed rulemaking to seek comment on measures to protect established subcarrier services.

NAB Pres. Edward Fritts hailed decision, saying he believed broadcasters would embrace IBOC for traditional and advanced services. “With today’s FCC action, local radio stations are poised to deliver one of the most sweeping advancements in broadcasting in nearly a century,” he said. CEA Pres. Gary Shapiro said his group was “ecstatic” about ability to turn “promise” of digital AM and FM into “reality for the millions of consumers who count on AM/FM radio on a daily basis.”

FCC said figuring prominently into decision was testing by CEA-NAB National Radio Systems Committee (NRSC) showing IBOC systems offered better audio quality, more robust signals and potential for new auxiliary services, such as data transmission and audio-on-demand. Commission also announced support for public process to develop formal IBOC AM and FM standards based on input from NRSC, which is expected to complete standards work by early next year. Struble said he didn’t want to minimize standardization process, but said it was “pro forma” effort because technology needed to produce transmitter or receiver already was “built into the equipment.” Commission deferred consideration of IBOC licensing and service rule changes to further proposed rulemaking notice. Commission didn’t set timetable for complete digital transition. “There will be an ample transition period built in,” Ferree said. “We're a long way from that day.” He stressed that this was not about taking spectrum away, but using spectrum more efficiently. Struble said estimates varied widely from 5 to 12 years on how long it might take for IBOC radios to replace existing analog receivers.

In taking its action, FCC said it no longer was considering proposed approach of requiring new spectrum in TV Ch. 6, but it’s not “categorically foreclosing” new spectrum options. If new spectrum is identified for broadcast use, further consideration of both IBOC and non-IBOC out-of-band digital audio broadcasting approaches may be warranted, FCC said.

Struble said iBiquity believed its “partner” broadcaster equipment suppliers, receiver makers and chip manufacturers all would be “positively impacted” by FCC action. He said partners now “could move forward confidently and aggressively with HD Radio,” iBiquity’s trade name for IBOC equipment. First aftermarket receivers are expected to ship in time for spring 2003 selling season, he said, at $100 price premium compared with comparably featured analog radios. Meaningful supplies of OEM radios will follow in 2004, Struble said. Kenwood USA Vp Bob Law told us his company was targeting May shipment of trunk-mountable, Sirius-compatible “black box” IBOC receiver at $350. He said Kenwood planned all-in-one head unit combining HD Radio and Sirius reception capability in 2004.

IBOC broadcasts will begin before year-end in major markets of N.Y.C., Chicago, L.A., San Francisco, Seattle and Miami. Struble said markets were identified by receiver partners as giving best potential for reaching critical mass more quickly. Goal is to reach “saturation” listenership of 50% in given market, which in N.Y.C. would encompass 10 stations, or 70 overall across all introductory markets, Struble said. He conceded goal was lofty one for achieving in 2003, saying more realistic target was 30-50 this year. Average conversion costs per station have been estimated at $75,000, Struble said, depending on quality of station’s “infrastructure.”

NPR supports FCC decision to move forward with IBOC digital radio standard, Exec. Vp Ken Stern said: “We recognize the potential for better sound quality and we are pleased that the commissioners took note of the potential for multiple audio streams via digital radio.” Possibility of broadcasting more content within existing spectrum is “great opportunity” for public radio to serve more of the American public, he said.