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New government mandate: FM chips in all mobile phones

Wed, 08/18/2010 - 7:04am
Jason Lomberg, Technical Editor

Jason LombergFor years, radio broadcasters and artists have duked it out over performance rights. Satellite radio and webcasters have to pay a fee for broadcasting music, but terrestrial radio (i.e. AM/FM) is largely exempt (they pay fees to songwriters, but not artists). Enter the highly-contentious Performance Rights Act, which would expand copyright law to include all public performances of copyrighted sound recordings. Radio would literally become pay-to-play. And it’s gotten even wilder: an amendment would mandate that all mobile phones contain FM radio chips.

NABThe FM chip mandate is an attempt to mollify the NAB (National Association of Broadcasters); under the terms of the Performance Rights Act, the industry would pay approximately $100 million to broadcast music on terrestrial radio. The inclusion of FM chips in all mobile devices would purportedly give broadcasters access to a wider audience. But it’s the consumer companies (and by extension, the consumer) who get the shaft in this deal.

This is little more than a government-mandated crutch for a legacy technology—no better than the EPA’s attempts to legislate a longer lifespan for incandescent lifebulbs. The high popularity of Sirius, XM, and internet radio shows where the market is headed. This new government mandate apparently removes a “competitive disadvantage” (to quote an EPA spokesman) for AM/FM Radio.

RIAACEA President Gary Shapiro is furious, and rightfully so. “The backroom scheme of the [National Association of Broadcasters] and RIAA to have Congress mandate broadcast radios in portable devices, including mobile phones, is the height of absurdity,” he said. “Rather than adapt to the digital marketplace, NAB and RIAA act like buggy-whip industries that refuse to innovate and seek to impose penalties on those that do.” It’s understandable that Shapiro would feel blindsided, since the CEA (the very companies to implement the FM chips) wasn’t consulted.

But it’s not just the CEA who feels snubbed. CTIA – The Wireless Association, an international trade group representing the wireless sector, is seething. “This is not a sandbox I want to have to play in,” said CTIA VP of Government Affairs Jot Carpenter. “What should happen is the performance rights advocates and the broadcasters ought to go off and settle their problems in a way that doesn’t involve us. We’re not looking to be a part of that debate or discussion or legislation,” he added.

The belligerents can’t even claim the moral high ground. These aren’t energy efficiency regulations or an issue of public health. This mandate sprung from interagency squabbling over, you guessed it, money. Because the RIAA and NAB couldn’t agree on terms, a third party (the consumer industry) is being unwittingly dragged in. I can’t think of a worse reason for government regulation. I assume the NAB will pay to install FM chips in all mobile devices? Or will the RIAA foot the bill?

According to the NAB, these terms have not been agreed to. Congress still needs to vote on the Performance Rights Act. Still, as RBR-TVBR points out, removal of the FM chip provision would be a deal-breaker for the NAB.

“If there is a decision made by the Board of Directors to go forward and seek legislation, including radio-enabled chips in mobile devices in possible legislation seems to us to be a reasonable idea," says NAB's Dennis Wharton.”

What's your opinion on this contentious issue? Join the discussion below! You can also e-mail the editor directly at jason.lomberg@advantagemedia.com

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