Trade groups representing consumer electronics makers and mobile carriers have voiced opposition to a recent proposal by the radio and recording industries to require all mobile devices in the US to include FM receivers. The proposal, made by the National Association of Broadcasters (NAB), comes as the trade group attempts to come to an agreement with a group affiliated with the Recording Industry Association of America (RIAA) in a long-standing battle over whether radio stations should pay royalties to record labels and performers for playing their songs.
The NAB released the framework of a potential compromise over so-called performance royalties earlier this month: Radio stations would pay a royalty of 1 percent or less, and in exchange the US Congress would require all mobile devices to include FM receiver chips.
CTIA, a trade group representing mobile carriers, and the Consumer Electronics Association ripped into the proposal. "The backroom scheme of the NAB and RIAA to have Congress mandate broadcast radios in portable devices, including mobile phones, is the height of absurdity," Gary Shapiro, president and CEO of the CEA, said in a statement. "Forced inclusion of an additional antenna, processor and radio receiver will compromise features that consumers truely desire, such as long battery life and light weight."
The government shouldn't mandate product features that consumers don't want, he added. "Rather than adapt to the digital marketplace, NAB and RIAA act like buggy-whip industries that refuse to innovate and seek to impose penalties on those that do," Shapiro said.
While FM radio mandate is just a proposal, "we felt it was appropriate to oppose it swiftly and sternly," added Megan Pollock, CEA's communications director.
NAB, in an effort to expand radio audiences, has been seeking an FM receiver mandate for digital devices for several years. But the proposal doesn't make sense, with many smartphones able to stream music and other content from the Internet, including streams from commercial radio stations, said Jot Carpenter, CTIA's vice president for government affairs. Several mobile devices available in the US have FM receivers, but they are not among the top-selling devices, he said.
"The business model has evolved away from a chip, in favor of Internet-based delivery," Carpenter said. "If consumers were clamoring for an FM chip, I can assure you that our manufacturers and our carriers would find a way to provide that."
Manufacturers of many mobile devices would have difficulty finding space for a new antenna and receiver, he added. "Real estate is at a premium inside these things," he said. "There's just not a lot of excess real estate inside these devices."
CTIA will strongly oppose any FM receiver mandate, he added. "We don't want to be in this fight, but if you're going to put us in it, we're going to fight every step of the way," Carpenter said. "We're going to make this utterly painful until you say, 'OK, this is a bad idea.'"
But an FM receiver mandate has several benefits, said Dennis Wharton, executive vice president for communications at the NAB. Most web-based music services don't include emergency alerts that radio stations broadcast, he said. Requiring FM receivers in mobile phones would help better inform the public about emergencies or bad weather nearby, he said.
In addition, carriers may be able to generate a new revenue stream by allowing radio listeners to tag songs they like and share in the profits when a listener buys the song, he said. The proposal "wouldn't be just an expense for the carriers," Wharton said.
The NAB has long opposed performance royalties for radio, while the recording industry has pushed for the new fees without much success. The debate in Washington over performance royalties dates back more than 20 years.
However, in 2009, the judiciary committees in both the Senate and House of Representatives approved performance rights bills, although the Congress didn't pass the legislation. That committee action prompted the NAB and the MusicFirst Coalition, representing the RIAA and other groups, to discuss a compromise.