NAB 'should consider' stupidity of FM chip lobbying campaign

Part of my job as editor is to sift through some of the more outlandish news about the wireless industry, and decide which issues merit coverage and which don’t. So when I initially read about an attempt by the National Association of Broadcasters and the Recording Industry Association of America to get a bill through Congress that would mandate cellphone manufacturers to install a chip to support FM radio on every cellphone sold in the United States, I dismissed it as stupid, unlikely and a waste of taxpayer’s money – because it is stupid, unlikely and a waste of taxpayer’s money.
But sadly, the NAB is powerful enough that this item hasn’t gone away yet. Indeed, the NAB came out with a survey this week that said 76% of cellphone owners surveyed “would consider paying a one-time fee of 30 cents to gain access to their local radio stations through a built-in radio chip on their mobile phone.” Notice the phrasing: would consider. I find it amazing that 24% wouldn’t even consider it. “Would consider” is not a commitment or even a statement that they want it. It simply means they would give it a thought. For 30 cents, the best NAB could come up with is “would consider.”
The background behind this lobbying effort is crazy: The NAB and the RIAA have been fighting over royalty payments. In short, performers don’t get paid when their songs are on the radio – again because NAB is one powerful lobbying group. (They do get paid when their songs are on satellite radio or Internet radio). The solution the two groups came up with is to push legislation that would force people to pay more for cellphones and other gadgets by including FM chips in them.
It gets even crazier: The NAB said the reason cellphone carriers and manufacturers weren’t including FM chips in their devices was because they would lose money. “It could be a simple case of anti-competitive behavior,” NAB’s Dennis Wharton said. “Every minute a cellphone user listens to free, local radio is one less minute spent using the wireless industry’s fee-based applications. Moreover, since listening to local radio would require no network bandwidth, cellphone subscribers wouldn’t be forced to pay the escalating rates associated with streaming data-rich, fee-based applications.”
Um, yeah, except device manufacturers have offered phones with FM radio included and had any one of those phones been an out-of-the-park success, I can guarantee all cellphone devices today would have FM chips located in them, without a government mandate.That’s how the free market works.
The NAB and RIIA are touting public-safety in their lobbying effort, an effort at face value that almost appears legitimate. The Federal Communications Commission is trying to figure out how to get text alerts included as part of emergency warnings, and the state of California and Sprint Corp. are working on a pilot effort to test the technology. But this issue is not about emergency warning information, it’s about performance royalties.
Through the years, the wireless industry has had to comply with some serious government mandates (and industry hasn’t enjoyed such a great reputation here): manufacturing cellphones for hard-of-hearing people, enabling digital wiretaps and more accurate E911 calling come to mind. But putting an FM chip inside a cellphone to solve a dispute over royalty payments between two large lobbying groups is ridiculous. Nevertheless, the wireless industry will have to spend money to fight the effort if NAB continues to push it.