9/17/2010 10:00 AM
The NAB has partnered with the RIAA to pressure the FCC through Congress to require cell phone manufacturers to include an FM receiver in each handset. Why? Obviously out of concern for listeners’ safety.
Uh, no. The real reason behind this cozy new relationship between the RIAA and NAB is strictly bottom line and dollar focused.
Under the deal pending between radio stations and musicFIRST (RIAA), broadcasters would agree to pay about $100 million more to labels and artists. Stations already pay fees to songwriters, but not to labels or performers. As the recent $2 per month increase in my Sirius fee attests, satellite and Internet radio stations are now required to pay performance rights fees to record labels and performers. Congress is about to vote on a bill that would require radio stations to also pay into those same funds.
The possibility of having to pay new compulsory performance fees have made broadcasters hopping mad. In an effort to limit such fees, the NAB has convinced the RIAA to partner with them to get the FCC to require FM chips in mobile handsets and other portable devices. If the plan works, broadcasters get lower performance fees, and the RIAA gets, well, lots of money. The consumer gets, “access to more music choices,” and the radios would be good for public safety, says NAB.
Clearly radio broadcasters and their representative organization the NAB have every right to look for ways to minimize operational costs. What is unique in this venture is that the participants are former adversaries, now joined to try and force a third industry, handset makers, to increase the cost of their product. Of course, the consumer electronics folks are apoplectic over the whole idea.
In a letter to the chairs and ranking members of the two judiciary committees, a coalition of wireless groups said, “It is simply wrong for two entrenched industries to resolve their differences by agreeing to burden a third industry — which has no relationship to or other interest in the performance royalty dispute — with a costly, ill-considered and unnecessary new mandate.”
Naturally, the CEA went ballistic over the NAB/RIAA proposal. Said CEA president, Gary Shapiro, "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," further saying that such an idea is "not in our national interest...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."
Hmm, guess Mr. Shapiro’s never experienced severe weather or a natural disaster when the power failed. If he had, bet he used a portable radio for information because his cell phone would be pretty much worthless.
I choose to stay out of this particular battle but would offer this unsolicited advice to anyone thinking of trying to get the FCC or Congress to require mobile television chips in cell phones: Can you spell Fairness Doctrine?