23 August 2010

Broadcasters want FM on Cellphones; Phone Makers Balk

USA Today

Cellphones are on the cutting edge of technological innovation. But they may also offer an old-fashioned service — FM radio — if a controversial new proposal gains traction in Washington.

Groups representing broadcasters, musicians and record companies say they may ask Congress to require that new mobile phones include equipment to receive FM.

The idea emerged in a proposed compromise for a dispute over whether musicians and record companies should receive royalty payments from radio stations that air their tunes.

It makes sense because "broadcasters provide a tremendous lifeline service" by keeping people informed during emergencies such as hurricanes or terrorist attacks, says National Association of Broadcasters spokesman Dennis Wharton.

But others say that FM radio chips and antennas would drain batteries, add to costs and take up space that could be used for new technologies.

"Broadcasters should man up, stop whining to Congress and start competing," says Consumer Electronics Association CEO Gary Shapiro. Cellphone industry trade group CTIA: The Wireless Association also opposes an FM mandate.

The NAB says it might drop its opposition to royalty payments if its members get benefits in return — including the ability to reach millions of cellphone customers. The group will update its members and hear their views today in a private online "virtual town hall" session.

Marty Machowsky, spokesman for the MusicFirst Coalition — an organization backed by music unions and trade groups that's leading the fight for royalty payments — says FM in phones is fine as "another way for people to enjoy music."

Several manufacturers — including Sony Ericsson, Nokia, Samsung, LG and HTC — already sell phones that can receive FM radio signals.

That shows that FM technology doesn't harm cellphones or add a big expense, Wharton says. He says that in another year or so, it might become economical to also include chips that can handle digital signals from the growing number of stations offering HD Radio.

But Shapiro says that FM-equipped phones have been poor sellers. If a mandate catches on in Congress, he adds, then he'd ask to double radio stations' royalty payments and make sure that "the wireless industry will be compensated."

If the CEA fights the idea, it could "throw a wrench into this," says Jeffrey Silva, an analyst at research firm Medley Global Advisors.

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