@ NAB: HD radio could be reason for operators to embed FM chips

LAS VEGAS – High-definition radio could bring the value proposition of adding an FM chip to mobile devices because the service can offload traffic from the wireless operator’s network and drive revenue to the operator by using music tagging services to push consumers to buy music from the wireless operator’s website rather than a third-party site, said Lane Bruns, a VP at iBiquity Digital Corp.
Bruns’ value proposition was a positive note in an often contentious afternoon panel at the NABShow, sponsored by the National Association of Broadcasters here in Las Vegas. Broadcasters charged that wireless operators are ignoring FM radio services, even when their devices have the chips preloaded in them, in favor of getting revenue from streaming radio services, like Pandora. Broadcasters, on the other hand, have been no friend to the wireless industry with a proposal before Congress that would mandate that wireless operators include FM chips in all of their devices. The attempts to cooperate even as the two industries butt heads on a number of regulatory issues underscores each industry’s attempts to remain relevant to their core audiences as the way people consume content changes and over-the-top content providers threaten existing business models.
Along with offering music, news, weather and sports to cellphone users, broadcasters would like to provide emergency alert services via FM chips to wireless subscribers. “In a real emergency, we are the best option” at delivering important alerts to end users, said Jeff Smulyan, president and CEO of Emmis Broadcasting. Emmis said broadcasters and wireless operators could partner to provide mobile marketing like coupon services to end users near the point of sale. The only problem with that is wireless operators can already do that over their own networks. By using the broadcast channel, Emmis said, carriers can eliminate “the crushing load for data transmission” operators are facing today.
Trying to force mandates on the wireless industry is not a good strategy, said CTIA’s Brian Josef, VP of regulatory affairs. Today, 41 phones in the United States have enabled FM radios, including two popular smartphones – HTC Corp.’s EVO 4G and Motorola Mobility’s Droid X. However, wireless carriers have not found that their customers want FM radio on their devices. One global manufacturer surveyed end users and FM radio was listed as the 31st “got-to-have” feature out of 33 features, Josef commented.
Regarding using FM chips to send emergency alerts, most operators are going forward with plans to use cell broadcast technology – here in the United States and across the globe –to comply with the Cellular Mobile Alert System because the technology resides on the operators’ networks. Relying on a third party to provide government-mandated alert services could leave operators vulnerable to litigation, Josef noted.
Broadcasters want to dictate wireless operators’ business models, which operators obviously are going to resist, Josef said.
Bruns said HD radio technology can be the business model that satisfies broadcasters and wireless operators. Using HD radio to drive an end user to AT&T Mobility’s music store rather than someone else’s could even propel the wireless operator to preload the application on the device, he said. HD radio has the possibility to make operators embrace active FM radio chips in their devices, just like operators initially resisted Wi-Fi service until they needed the Wi-Fi network to take traffic off the cellular network. “It takes zero bits from their pipe” instead of bandwidth-hungry applications like streaming radio.