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Special Reports
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| FM-Capable Cell Phones Would Benefit All |
| But Study Also Finds a Need for Urgency Because the Time Window Is Limited |
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7.16.2008
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WASHINGTON A report commissioned by an NAB advocacy program aimed at fast-tracking advanced services for radio states that the radio industry should move quickly to convince cell phone manufacturers of the benefits of producing FM-capable cell phones.
The fact that the NAB expects to begin outreach immediately to cell phone handset makers touting the potential benefits reflects the urgency of the developments, observers said.
The report states that FM-equipped cell phones could play a significant role in radio’s future by representing a large influx of new listeners and broadcast services.
The study was written by Dr. Joseph Kraemer, director of the Law and Economics Consulting Group, and Richard Levine of Constantine Cannon LLP.
The NAB FASTROAD report says, “The opportunity for broadcasters to define a win-win case for cellular operators is current, but time bound, driven by several factors.”
Among those factors is the FCC’s directive to have the cell phone industry inform the agency by the fall of 2008 whether they will or will not participate in the Commercial Mobile Alert System, under which commercial mobile service providers may elect to transmit emergency alerts to the public.
The FCC and the cell phone industry are currently considering FM-with-RDS as a potential solution to public alerts.
The study notes, “Broadcasters interested in proposing an FM-RDS solution to meet CMAS requirements have a short-term window to interest cellular operators in placing FM tuners in handsets as an element of the operators’ CMAS implementation planning.”
The emergency alerting benefits of FM-equipped cell phones will likely play a critical role, observers said, as cellular operators come under pressure to participate in a national emergency alert infrastructure. The study cites information that FM-with-RDS is a candidate technology that seems to meet FCC requirements within the Commercial Mobile Alert System.
The FCC has asked in a Notice of Proposed Rulemaking whether radio data systems like the Radio Broadcast Data System meet their goals for efficient delivery of alerts over the CMAS.
“The emergency alert part of the study is very important to the FCC’s goals and could be critical to its development. It could justify our whole initiative in and of itself. It is certainly about more than just warning, but that is a big part of it,” said Dennis Wharton, vice president of communications for NAB.
The authors identify approximately 257 million current American cellular subscribers. However, only 12.5 million cellular handsets, about 8 percent of the total sold to date in this country, are FM-capable.
Specifically, most Sony Ericsson handsets introduced in 2008 have FM reception capability. However, the vast majority of phones sold by LG, Samsung and Motorola, the three largest handsets suppliers to the U.S. market, have no FM reception capability.
The report also found that FM radio on handsets is much more prevalent outside the United States.
The benefits to the cell industry of including FM are numerous, the study found, including increased cellular service subscriber satisfaction, ad-sharing opportunities and increased music download potential.
Base turnover
“This goes toward our goal of getting broadcast radio devices on as many devices as possible. This suggests that FM adaptability to cell phones is real and worth pursuing,” Wharton said. “The capability of extending FM services to hundreds of millions of new devices is exciting.”
Once most cell phone makers adopt the FM receiver platform, penetration in the marketplace could be rapid. The study cites statistics that show the embedded base of handsets in the U.S. turns over in approximately 19 to 20 months.
“Assuming FM capability was added to a considerable portion of new shipments of U.S. handsets, within two years there would be substantial penetration of the embedded handset base by FM-capable phones,” the study found.
The study states that listening on handsets would be captured by the diary-based audience measurement system, but fails to address the fact that the current diary system is being replaced, in some markets, by Arbitron’s PPM and how that may affect radio’s ability to monitor cell phone listening.
Wharton said radio broadcasters in this country would benefit greatly if they can serve their product in more places.
“Expanding our brand to as many devices as possible is crucial.”
Cellular operators have long cited a lack of consumer demand in the U.S. for FM on handsets as a reason for not adopting the platform en masse. Technical concerns also linger, according to the study.
“Concerns include adverse impact on battery power; need for a second internal antenna; and lack of FM coverage in rural areas,” the study reported.
The authors of the report also noted that a “critical objection that cellular operators raise to FM-on-handsets is that free over the air music may compete with cellular music services.”
With the new report in hand, the NAB will try to sell handset manufacturers and cellular operators on the benefits of FM-capable cell phones, Wharton said.
“We want to stress the importance of this issue from a consumer perspective and making the pitch that this will make their product even more desirable,” Wharton said.
Wharton said he didn’t expect these new developments to take away from the radio industry’s push into HD Radio.
To read the study, go to www.nabfastroad.org.
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