Fear the mobile device mandate monster, now with HD Radio too!

By Matthew Lasar on October 27, 2010 in Commercial Radio, HD Radio, Satellite Radio

via wikimedia commons

I stand in awe at the sheer number of features the National Association of Broadcasters and its members want mandated on cell phones. First they’re proposing that Congress pass a law hotwiring an FM radio chip into every mobile. Broadcasters are also talking about a TV tuner requirement. And now they also want HD!

Here’s the recommendation [italics added]:

“Congressionally-mandated radio-activated chips in mobile devices such as cell phones and BlackBerry smartphones, with an acceptable phase-in period and inclusion of HD Radio chips when economically feasible.”

The last time anybody mentioned an HD chip mandate, it was Clear Channel and Ibiquity trying to get it in Sirius XM satellite radio tuners (the FCC launched a Notice of Inquiry on the question and let the issue die).

This is all part of the NAB’s proposal to the musicFIRST coalition for conditions that would make it acceptable for broadcast radio stations to pay royalties to the performers whose music they air. musicFIRST represents the artists and labels. The broadcaster “term sheet” offers much lower royalties that the proposed Performance Rights Act, which has been going nowhere in Congress for about a year.

And that’s probably why musicFIRST has rejected the offer.

“MusicFIRST has completed a preliminary analysis of the new term sheet. In it the radio broadcasters unilaterally cut their digital royalty rates and lowered their terrestrial royalty payment. Those changes by themselves undermine the fundamental economic equation that was core to the July agreement [apparently the two sides had a big negotiating session in July]. The NAB’s term sheet gives the idea of a sweetheart deal a bad name. It might even be worse for the music community than the status quo.”

“Fortunately, Congress writes the laws, not trade associations like the NAB. The musicFIRST Coalition will continue to press forward.”

“The bottom line is that no recording artist should be forced to give up their work without consent or compensation, a fact now acknowledged by the NAB’s vote. The musicFIRST Coalition will continue and expand our campaign until this fundamental unfairness is corrected. Radio is the only platform in the United States that doesn’t pay performers. The music community will find it difficult, if not impossible, to support legislative efforts to expand the reach of terrestrial radio so long as this glaring unfairness continues.”

It’s unclear to me what’s going to happen next in this drama. Maybe NAB will cough up a higher royalty rate? But trying to get Congress to mandate three different broadcasting technologies in smart phones . . . what’s going on here? Is this an industry in a state of total desperation?

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