Ibiquity Digital Corp., patent-holders on the In-Band On-Channel (IBOC) digital audio broadcast standard adopted by the U.S., announced its license fee structure earlier this month. Ibiquity’s technology is proprietary – therefore, going forward, digital radio broadcasting requires two licenses to broadcast: one from the government and one from Ibiquity.
In hopes of enticing early adoption, the initial “one-time” general IBOC license fee to Ibiquity begins at $5,000 per station. If stations wait just three years to convert, however, they will find that fee to be five-fold.
Then, there are the residuals: stations that multicast (i.e. carry multiple program streams on one channel) must pay Ibiquity 3% of the revenues derived from the second DAB channel, or $1,000, whichever is greater. This fee will be assessed annually. This is somewhat ironic because National Public Radio led the effort to develop IBOC-compliant multicast capability (something commercial broadcasters initially rebuffed).
The real money’s expected to come from datacasting – the provision of non-broadcast services using some of the DAB bandwidth. Ibiquity wants 3% of any datacast revenue, too – and that will be collected quarterly.
Future upgrades to IBOC will also come at a price, especially those “that contain more features,” which is vague enough to mean almost anything (patches will be free).
Ibiquity does plan some exemptions for noncommercial broadcasters, although so far it is light on details. The Corporation for Public Broadcasting has been offering grant money to help non-coms offset the cost of transitioning from analog to analog/digital, but nobody’s said anything about an ongoing subsidy to assist with intellectual property rent-payments.
At the 2001 convention of the National Association of Broadcasters, Ibiquity President/CEO Robert Struble made a direct comparison to Microsoft. He said, “We’re a software company. If you buy a transmitter, you’ll need new software from us.” All hail the new monopoly-by-standard.
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