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News Archive: July 2006

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7/31/06 - FCC Does Media Ownership Redux [link to this story]

On June 28 the FCC voted to restart its project to revise its media ownership rules. The formal Notice of Proposed Rulemaking to begin this process was released last week. The agency last tried to do this in 2003, but most of its proposed changes were blocked by court order in 2004.

The last time around was a near-disaster. Then-chairman Mikey Powell tried to ram through a christmas-load of changes that would have let large media conglomerates get much larger. The FCC tried to use hopelessly biased "research" to justify industry moguls' wet dreams. Millions of people cried foul on the scheme, and it still took the courts to stop it.

This week the FCC released its introductory proposal for the do-over plan. It's vague, like the last time, with many more questions than answers. Whereas Mikey Powell really disdained public involvement in the process, present chairman Kevin Martin has pledged a half-dozen public hearings on ownership issues. However, he has not yet pledged to release the "research" that will justify this try at unleashing further media consolidation.

More telling is the fact that he's just allotted just 120 days for public comment in the opening round.

Media ownership is a defining issue for anyone interested in media reform of any flavor. However, it just doesn't quite trip my trigger like it should. That is why I plan to rely on the Mediageek for news and analysis, especially since Paul's promised a multi-part breakdown of just what is at stake in this particular proceeding.

Additionally, Free Press has set up Stop Big Media to track developments and make filing comments with the FCC on media ownership relatively pain-free.

7/28/06 - NAB Seeks FM Translator-Grab for AM Stations [link to this story]

A very intriguingPetition for Rulemaking was recently filed by the National Association of Broadcasters. It asks the FCC to let the owners of AM stations apply for FM translators, so that they may rebroadcast their AM signals to provide better service, especially at night, when many AM stations must operate at reduced power or go off the air completely. NAB believes the FCC needs to give a much-needed "boost" to the lot of these beleaguered stations.

The FCC has considered and rejected this very notion twice in the last 25 years, but NAB thinks the third time is the charm because of new sources of interference to the AM band. What new sources? Computers and traffic signals are mentioned, but a footnote otherwise plugging digital radio casually drops the comment that AM broadcasters are "encountering ever more interference problems as a result of an increase in ambient noise."

This is the closest NAB will ever come to admitting that "HD" digital radio makes a racket of the AM dial. That's because it takes triple the bandwidth to broadcast a hybrid analog/digital AM signal than it does to broadcast in analog alone. Thus AM stations broadcasting in a hybrid mode have the potential to interfere with three times as many other stations. You can see how this makes a mess as the number of AM stations broadcasting in hybrid mode grows.

The more powerful AM stations in the largest markets also happen to be the earliest adopters of digital, so the danger is fairly imminent. The FCC currently prohibits the broadcast of hybrid AM signals at night because of this very problem. When it eventually lifts this prohibition, the static-hash will go national. (The FCC will not consider any changes to digital radio regulations at its August meeting, after pulling a proposal off the July agenda.)

This is a would be quite a boost, all right, in the theft-sense of the word. Allowing AM stations to implement networks of FM translators is a hedge-bet against digital AM signal interference. Not only that, but FM translators can also go digital, which would provide AM broadcasters with coveted access to the side of the digital radio business where the "real money" is expected to be made - on FM. AM broadcasters can't whine about being left to languish in an ocean of interference if they're FM broadcasters, too.

Several major amendments would need to be made to the FCC's FM translator and AM station rules in order to allow this to happen. But if it did, here's a sketch of the impact. There are 4,759 AM radio stations on the air nationwide. NAB's proposal seeks to guarantee each AM station enough FM translator coverage to be heard for at least 25 miles. That's going to take more than one translator station.

By way of comparison, 13,306 new station applications were filed in the 2003 Great Translator Invasion. While a great many fewer than that will ultimately end up on the air, in the NAB's case you can be damn sure every AM station will apply for every FM translator it can get. It doesn't take much of a multiple to see the potential influx.

In contrast, just over 1,000 LPFM stations have earned their call letters since 2000, of which 744 are actually on the air.

You don't fix a fundamentally faulty AM digital radio system design by overrunning the FM band. You fix the faults directly or pursue another design. It's too bad the FCC doesn't have the balls to tell that to iBiquity, the proprietors of "HD Radio." Will it take the NAB's petition seriously? Two of its listed authors were relatively high-level FCC staff members working issues like these from the other side of the revolving door not very long ago.

7/27/06 - Cable-via-DTV Company Goes Bankrupt [link to this story]

This month U.S. Digital Television filed for Chapter 7 bankruptcy. USDTV used digital television spectrum to broadcast a dozen encrypted basic cable channels at a price designed to undercut basic cable package rates. Subscribers used a set-top box descrambler to watch.

The company got some startup funds from Fox and the Hearst-Argyle station chain, but it wasn't enough to grow the business to anywhere near a sustainable subscriber base. So after a run in just four cities, reaching an average of about 4,000 subscribers per city, USDTV is looking for an angel, or at eventual liquidation.

This is the second attempted business model using DTV spectrum for non-DTV purposes to go bust. The first was a Clear Channel-sponsored effort to turn digital television stations into Internet service providers. Others, involving the delivery of movies, music and software on-demand, are still afloat. How about using the extra spectrum afforded to DTV to offer extra (free) channels of content, as was promised when the DTV spectrum giveaway went down a decade ago?

7/25/06 - Translator-Traffickers Mint Another Million [link to this story]

Since 2003, the unscrupulous folks at Radio Assist Ministry/Edgewater Broadcasting/World Radio Link have sold hundreds of FM translator station construction permits scarfed up in a questionable fashion to mostly-religious broadcasters looking to establish or extend turnkey radio networks on the cheap.

Horizon Christian Fellowship was one of RAM/EB/WRL's biggest early clients. It bought 20 FM translator construction permits along the West Coast from Radio Assist and Edgewater in a series of deals worth $219,000 in early 2004. Horizon has loose ties to the Calvary Chapel fellowship of churches, and many Calvary Chapels are well-known for their abuse of FM spectrum. Horizon, like Calvary, grew from a single church in California to a network of churches throughout the U.S., Mexico, Japan, and Russia.

RAM/EB/WRL used the money from its early business with Horizon and a Calvary Chapel client to bid more than $1.5 million for 16 full-power FM station construction permits in an FCC auction. Adding full-power FM stations to the portfolio gives the triad the ability to set up custom regional radio networks, where one or more full-power FM stations beam programming to dozens of translator-repeaters. Reportedly, Horizon has already picked up some full-power FM station construction permits from World Radio Link, numbers and price unknown.

In January, Horizon bought nine more translator station construction permits in a series of deals involving both Radio Assist Ministry and Edgewater Broadcasting for $52,000. These and other transactions at the time helped RAM/EB/WRL book its first $1 million in translator speculation revenue.

A lot's happened since then. In April, the FCC approved Horizon's purchase of 19 more translator station construction permits from Radio Assist Ministry in eight states for $120,764.

On June 2, the FCC okayed Horizon's purchase of another 11 translator permits in six states from Edgewater Broadcasting for $81,763.

This was followed on June 22 by FCC approval of two more deals: one involving Horizon's purchase of 19 permits in seven states from Radio Assist for $120,764, and one involving Edgewater's sale of a dozen construction permits in nine states for $89,196.

On July 14, another double-transaction was waved through. One involved Horizon's purchase of two dozen construction permits in 12 states from Radio Assist for $152,544. The other involved Edgewater selling seven permits in five states to Horizon for $52,031.

Finally, on July 18, the FCC waved through another two-fer deal. Radio Assist sold Horizon 15 permits in six states for $95,340; Edgewater sold Horizon 15 permits in 10 states for $111,495.

For those keeping score at home, that's eight transactions involving 122 FM translator stations across 19 states, for $823,897: RAM/EB/WRL's most profitable run by far. It also makes Horizon RAM/EB/WRL's largest client in terms of revenue: some $1.1 million alone (that we know of).

In the latest series of sales, Horizon committed to pay anywhere between $6-8,000 per station, and made an up-front payment equal to 25-40% of the total purchase price, with the rest contingent upon FCC approval. In most of the deals, individual station construction permits were curiously priced out either at $6,356 or $7,433.

The paperwork behind Horizon's acquisitions signal more than the construction of a garden-variety media empire. This is about conquering the FM dial via saturation for the Lord. While some of these new translator stations will rebroadcast Horizon Christian Fellowship's own programming, others will rebroadcast stations that World Radio Link itself will program, though most will rebroadcast material from other well-known godcasters, like the American Family Association, Educational Media Foundation, and WAY-FM.

However, many of these translators will pick up the signal of a full-power FM station as fed through another translator station, in some cases owned by another entity, making many of these new stations the furthermost links in a daisy-chain of translators that can extend the reach of a parent full-power station across several states.

Such brotherly behavior, where one godcaster relays another's programming through multiple stations of varied ownership, certainly muddies the water with regard to who owns what, and what can be heard where.

I wonder if retransmission agreements are involved, by which the owner of a given translator gets a cut of "listener support" that is received from within its coverage area. Charismatic and business-savvy people like Horizon's founding pastor/CEO, Mike MacIntosh, don't invest more than a million dollars in broadcast infrastructure, most of which will relay the ministry of others, without expecting a healthy return on investment.

Interestingly, the FCC's electronic paperwork of a few of this year's transactions includes a note that they are replacement filings, due to the fact that "A NON-RELEVANT CONFIDENTIAL AGREEMENT...WAS INADVERTENTLY ATTACHED" to the original submissions.

As with previous reports on the practice of translator speculation and trafficking, this one only scratches the surface. RAM/EB/WRL have been quite busy this year doing many other deals which I have not had the time to examine. So are other speculator/trafficker groups. These particular transactions are just the most flagrant of the foul bunch. They are just glimpses of what I increasingly suspect is a complicated network of interlocking station ownership, designed to mutually propagate the business of broadcast evangelism.

7/22/06 - Sirius Confesses to Power-Jacking Transceivers [link to this story]

Sirius Satellite Radio also filed a document with the SEC this week with regard to overpowered satellite-to-FM transceivers and its role in developing and marketing them. Check this:

[C]ertain Sirius personnel requested manufacturers to produce Sirius radios that were not consistent with the FCC’s rules. As a result of this review, we are taking significant steps to ensure that this situation does not happen again....

"Willful and repeated" violation of the rules is a factor the FCC is supposed to weigh when assessing penalties against violators. There's been at least three months' worth of correspondence between all parties on this issue. Both XM and Sirius have admitted to the marketing of non-compliant equipment. Sirius, to its credit, has gone a step further. There's irony in the fact that satellite broadcasters have done more to encourage the proliferation of microradio technology than any hell-raising kit-maker could ever hope to.

However, FCC enforcement cases involving corporate piracy of the airwaves never seem to contain the same prosecutorial zeal as that found in those involving more stereotypical defendants. The NAB will want a proverbial head on a stick. Perhaps the drafting of consent decrees has already begun.

7/20/06 - XM, Sirius Pull Pirate Transceivers [link to this story]

So it would appear that various models of mobile satellite radio receivers are indeed little pirate stations that can intermittently and over short ranges jam other FM radio stations as their owner/listeners drive around. A Securities and Exchange Commission filing made by XM this week discloses that XM and at least one receiver manufacturer have been contacted by the FCC about bringing certain models of mobile satellite receiver "into compliance" with "FCC emission standards."

Aftermarket, add-on mobile receivers contain small FM transmitters that take the satellite signal and relay it to a car stereo tuned to a certain FM frequency. Similar kits are available to allow people to listen to other audio devices on the road. The National Association of Broadcasters says some models of these transceivers contain FM transmitters that are too powerful, and thus technically require licenses to operate. Interestingly, the NAB report suggests some of these devices may also interfere with the reception of digital "HD" radio signals, since these, in the words of its report, occupy

"vacant" adjacent channels, it is likely that these are the exact channels a user would choose upon which to operate one of these devices. To the user, the "noise" like HD Radio carrier appears to be a vacant channel. However, with the wide modulation capability and strong signal levels emitted by these devices, it is likely that significant interference to the much lower power HD Radio signals would be caused.

XM and Sirius previously tried to pass off this problem as one of improper installation, not design.

Some Sirius receivers also apparently have over-beefy FM transmitters onboard, and this week the company discontinued production of select models. No word on whether Sirius is also in correspondence with the FCC.

It would be interesting to know just how much wattage these transceivers are throwing. Roughly speaking, the FCC's limit for FM transmission power under Part 15 is less than a quarter of a watt, but past coverage of the interference caused by these transceivers suggested they generated signals that could be heard as far as a quarter-mile away. Considering that a transceiver's antenna could be no bigger than the antenna of the vehicle in which it travels, that suggests a watt or more of power.

XM proposed a change to transceiver design that would "reduce emissions through the antenna or cigarette lighter adapter," but the FCC just nixed that fix, no explanation given.

XM is quick to note that "no health or safety issues are involved with these wireless XM radios," though if you, as an individual, were to run a stand-alone FM transmitter of that amount of power and pump your own programming through it, you risk a $10,000 fine or worse. No single microradio station ever caused this much widespread consternation about interference. Care to place bets on whether the FCC's inquiry will lead to any sort of penalty for XM, Sirius, or any affected receiver manufacturers?

This news has affected both companies' stock prices, which emphasizes the relative youth of this newcomer to the radio space.

7/18/06 - Microradio's Second Wave [link to this story]

The FCC has now conducted more enforcement actions against unlicensed AM and FM stations in the first half of 2006 than it did in the entirety of 2005, which broke all previous records for cat-and-mouse action. However, this milestone was reached by a bit of paperwork puffery on the part of the FCC. For example, as field agents hunted recent activity on San Francisco Liberation Radio's old frequency (93.7), they sent warning letters to two people and the owner/manager of the building they apparently live in. In the recent past, tagging one would have sufficed.

This year the FCC also broke its drought of issuing forfeiture (fine) notices to pirate stations. Four people have been presented with $10,000 government invoices so far this year, compared with none in 2005. Each case took at least a year to reach that level of escalation, and based on the FCC's prior collection history, it will be lucky if it actually sees dough from half of them.

A few people have also received Notices of Apparent Liability ("pre-fines"); the latest was issued to a man in Florida this month, a year to the day that the FCC opened up its case. Interestingly, although the local police were heavily involved in the proceedings, the authorities elected to go the FCC route instead of with a state felony charge.

To me, the longer view is most interesting. The graph at right represents my count of the number of enforcement actions the FCC has conducted against unlicensed AM/FM/SW broadcasters every year, since 1997.

Note the wave that begins to grow in 2002. The FCC proposed licensed, low-power FM radio in 1999, considered it in 2000, and formally began implementing the service in 2001-02.

The National Association of Broadcasters formally declared war on microbroadcasting on January 12, 1998, which explains the spike that year. The lull of the next three years was a political gesture. Once LPFM stations started to take to the air, the heat was turned back up.

But I do not believe this fully explains the spike in enforcement actions. In 2004, the FCC hit about 30-40 stations with 92 total enforcement actions. 70-80 stations were on the FCC's radar in 2005, when it served up 143. This year, the number of affected stations is already well north of 50. Thus it would appear the number of stations is growing, in rough proportion to the number of enforcement actions taken by the FCC. The administrative inflation, which began last year, bears further watching.

The important conclusion seems to be that LPFM did little, if anything, to satiate the public demand for increased access to the airwaves. It certainly piqued a lot of interest in microbroadcasting, and perhaps made many realize just how easy it is to do, with permission or not.

7/14/06 - FCC Punts on HD Rulemaking [link to this story]

Thursday's Commission meeting was delayed by five hours; during the delay the agency revised the meeting agenda, announcing that the digital radio item had been pulled. No reason given, except, "it isn't done." One could say the same about the HD Radio protocol itself, but that's not stopping radio's major players from shoving it onto the air.

In related news: how much fresh content does digital radio multicasting really offer? Most HD-R side-channels run what is called a "hard clock," meaning a set playlist with few or no updates. According to Mark Lapidus, "When they [reviewers of HD radio receivers] don't discover the repetition, I figure that they just really haven't listened very much. However, real listeners will catch on quickly as they hear the same song at the same time every day." What kind of content diversity does one expect when the largest provider of HD multicast programming is Clear Channel?

7/11/06 - FCC to Further Rubber-Stamp IBOC/HD Radio [link to this story]

The Federal Communications Commission's monthly meeting goes down on Thursday, and the second-to-last item on its agenda is the adoption of a Further Notice of Proposed Rulemaking on the certification of "HD Radio," the digital audio broadcast technology of-choice for the U.S. radio industry.

Though the HD Radio system has not yet been formally certified, a relatively vigorous campaign is underway to deploy it. Rush deployment before formal certification of a technology results in what is called "the creation of facts on the ground," demonstrating the technology's functionality and increasing the pressure on its regulator to approve its usage (since it's already out in the wild, failing to certify it puts the regulator in the position of nullifying billions of dollars of investment).

The FCC could very well give radio stations blanket authorization to go digital with little or no extra administrative effort (right now stations must write a letter informing it of their digital operation and its technical parameters). The multi-channel mode of digital broadcasting, which just debuted this year and was not initially offered as a feature of the in-band, on-channel (IBOC) protocol used by the HD system, should also get an official nod.

AM broadcasters, especially, could feel some pain over this. The fattened signals of HD radio stations are especially prone to interference on the AM band, and the problem is especially wicked at night. Up until now, AM stations have been restricted to broadcasting in the daytime only. Perhaps the FCC will now allow stations to go digital at night, either with some sort of reduced power and/or unless they cause interference complaints. That should sound lovely.

If this "deliberation" is like previous ones, the Commissioners will speak of the general wonderfulness of radio's digitalization and are quite unlikely to bring up HD's negatives, including its interference problems and proprietary nature.

The double-suck thing about the FCC's digital radio proceeding is, it began at about the same time as the great LPFM debate began. As others have noted, while the grassroots lobbyists glommed onto LPFM as "the closest thing you can get to immediate gratification in a spectrum policy proceeding," the business of making the industry's own broadcast technology the medium's standard in the digital realm tottered along with little notice (relative to the interest LPFM generated). This may turn out to be a major strategic error, if the fattening of every station's footprint on the dial squeezes the weakest stations the most.

Not like the FCC has paid much attention to the public interest in the context of digital radio. Though LPFM may have been the focus at the time, many of those motivated by the LPFM rulemaking engaged in the digital radio debate, especially in the second and subsequent full rounds of comments and reply-comments. I've been reading this record of public debate as part of my research in school. I'm nowhere near done, but already a few things are pretty clear.

The first is that the FCC all but ignored the public input it received, and those it deigned to address were brushed aside with language nearly identical to the industry's perspective on the technology. That's because HD Radio's developer, iBiquity, and its founding investors (name your broadcast chain here) flooded the FCC's docket with well-scripted talking points, and paid regular, insistent visits to FCC headquarters to personally push the issue along.

As a result, the FCC did not even attempt to compare the industry's preferred standard with any others. The FCC claims that since there was no industry backing for an alternative, there was no reason to explore alternatives. No need for an independent, comparative analysis of this fundamental shift in radio as we know it.

I think we're being served up a half-baked technology that in the short term will make major broadcasters extra money but in the long term will provide services that won't even be called "radio" anymore. The money-momentum is already too far along to stop HD from having a go at us. Now the marketplace will decide whether this is really the future of radio or not.

I've heard nothing about any pirate-play with the HD protocol as of yet, though they say someone's already done it with digital television. A new can of worms for a new century.

7/6/06 - BusRadio Gets Deceptive [link to this story]

The ethically-deficient crew behind BusRadio, looking to take the captive marketing of kids in school "to the next level," have now put the most damaging of its marketing materials behind a "members-only" firewall. This after a slew of unfriendly press exploring its business model, which is to pipe advertisements for sponsors into school buses. Though BusRadio's hyped its launch in a few Massachusetts school districts this fall, one has already backed out following parental backlash.

Queries to now display a splash page, and access to requires a username and password combination. It is extremely difficult to obtain a combination via the sign-up form (more than 85% of all requests are rejected). This content is apparently restricted to "sponsors" (read: ad clients). However, is now chock full of information that heralds BusRadio's efficacy at keeping kids quiet and in their seats.

The company's site developers were also forward-thinking enough to code the BusRadio domains in such a way as to prevent Google and The Internet Archive from caching any pages. Even more interestingly, BusRadio employees have been directed to scrub references to the company from their MySpace pages, or scrub the pages themselves.

BusRadio is thus attempting to whitewash the Channel One-esque nature of its business in exchange for portrayal as a "bus safety program." BusRadio's sugar-daddy, the venture capital firm Sigma Partners, has not been able to raise the full amount of startup funding it had initially planned for. Cutting off BusRadio's venture capital at this stage in the game, coupled with enough parental revulsion, might very well strangle this bankrupt idea before it can grow any roots.

7/3/06 - Classic British Ex-pirate Pays Ransom, Expands Audience [link to this story]

The legendary Radio Caroline has for years been engaged in rebuilding itself, in hopes of perhaps securing a broadcast license and even, just maybe, broadcasting again from studios onboard one of its former ship-homes. It claims to have taken a major step toward this recently when it secured the rights to be heard over Sky Digital, the dominant satellite TV provider in the U.K. Sky dwarfs its cable and satellite-based competitors, reaching some 29 million British homes. Caroline is now heard on Sky Digital channel 0199, in homage to the original pirate station's broadcast wavelength of 199 meters (~1510 KHz).

The symbolism warms the heart until you realize that Sky Digital is part of Rupert Murdoch's News Corporation empire, and it costs £20,000 ($36,000) per year to secure and maintain a channel on the Sky system. I realize that the motivations of British pirates are different from Americans, and many seek to become fiscally sustainable and eventually turn a profit by operating under a commercial model, but paying a global media mogul a hefty yearly rent, with money raised from listener donations, seems like a roundabout if not backward way of going about an eventual resurrection.

There's also the station's featuring of an evangelist media mogul selling fundamentalism from Missouri as part of its morning line-up, slugged under the moniker of "Caroline Viewpoint." Back in the 1960s the game was rebellion against a state-dominated broadcast radio environment, and money was a means to an end to break that licensing blockade. But now, the point is...? No disrespect intended to the Caroline legacy; it just seems like things are a bit twisted up today.