May 19, 2009 22 Comments ›› Erik Wong
Last year a fraud-proof radio rating system made itâ€™s debut. It automatically and passively records what radio station someone is listing to without any work on the listenerâ€™s part.
Not only more accurate, but fraud proof.
Because it is passive, rather than requiring a diary to be manually maintained, opportunities for cheating have virtually been eliminated.Â¹
As the new system was implemented, conservative talk-radio stations surged in the ratings. (Itâ€™s now estimated that Rush Limbaugh is heard by up to 50 million people a day).
However, hip-hop stations (that have been found to encourage over-reporting in the diary format) saw their ratings plummet.
Many liberal talk-radio programs also noticed a sharp decrease in listeners as the new ratings system was deployed. Al Sharptonâ€™s syndicated radio show was cut from many markets due to lack of listeners.
Now the Obama administration is calling the new system â€˜racist.â€™ At the behest of the Obama administration, the FCC is opening an official probe into the matter. Obama claims,
A second concern is that ethnic minorities will be less willing to wear the PPM device than whites.
Radio & Records magazine reports on how quickly the FCC is jumping on the PPM (ratings device):
Nearly six weeks after FCC commissioners discussed, then called for a public look at Arbitronâ€™s PPM listener survey technology, the often slow moving federal agency has jumped quickly, announcing a public inquiry into the commercial use of the technology and â€œits potential impact on audience ratings of stations that air programming targeted to minority audiences, and consequently, on the financial viability of those stations.â€
The FCC action comes after minority groups, both the National Association of Black Owned Broadcasters (NABOB) and the Spanish Radio Association, asserted to the Feds that they were concerned that the new meters were dramatically undercounting their targeted audiences. â€œBecause audience ratings affect advertising revenues, undercounting minority audiences could negatively affect the ability of these stations to compete for advertising revenues and to continue to offer local service to minority audiences,â€ observed the FCC in its announcement on Monday morning (May 18).
The notice of inquiry, as the official statement characterizes it, will investigate the impact of PPM methodology on the broadcast industry as well as whether the audience ratings data is sufficiently accurate and reliable to merit the Commissionâ€™s own reliance on its rules, policies and procedures, the agency said.
The makers of the PPM ratings device issued this statement:
â€œArbitron welcomes the opportunity to better educate all parties about our Portable People Meter service and its advantages over the diary-based system,â€ said company spokesman Thom Mocarsky. â€œThe FCC Notice of Inquiry will allow us to further explain why a passive, electronic audience measurement service is a valuable tool that can help the radio broadcast industry compete with the emerging digital media in the 21st century.â€
â€œWe appreciate that chairman Copps has commended Arbitron for trying to improve our ratings methodology and for committing significant resources to that effort,â€ Mocarsky said. â€œWe also appreciate that commissioner McDowell has acknowledged that Arbitron and a number of broadcasters have said that our new automated approach to ratings measurement offers significant improvements over the older, manual diary-reporting system.â€
And, despite what some trade publications have reported as an â€œinvestigation,â€ Mocarsky wants to set the story straight. â€œIt is important to note that FCCâ€s Notice of Inquiry regarding PPM is not the same as the formal investigation demanded by the so-called PPM Coalition.â€
â€œThe Notice of Inquiry is an open proceeding in which any and all parties may express their views on a wide variety of issues. This is very different from a closed, adversarial proceeding before an administrative law judge,â€ said the spokesman.
Mocarsky noted that in the ex-parte notices that Arbitron has filed regarding our one-on-one meetings with the FCC, â€œWe have consistently expressed our willingness to participate in a Notice of Inquiry.â€
â€œWe have said that an open proceeding can foster dialogue, education and an exchange of ideas among parties holding differing viewpoints, while a closed investigation would likely lead to â€œfreezingâ€ the parties into a litigation-like adversarial postures,â€ Mocarsky said. â€œWe also said that a closed investigation would divert valuable Arbitron resources away from our continuous improvement initiatives that are enhancing the quality of our PPM services.â€
Harry Cole wasnâ€™t as optimistic about the inquiry. The veteran broadcast communications lawyer with Fletcher, Heald & Hildreth, PLC, in Arlington. Va., said the FCC has opened â€œa huge can of worms.â€ He acknowledged that the inquiry is a â€œpet project of Adelstein and Copps but with considerable downside for the FCC.â€
Cole, who was returning an R&R call for his colleague, attorney Francisco Montero, who represents the Spanish Radio Association, said, â€œI donâ€™t have a horse in this race but there are a number of people who wanted to see this happen. Some minority groups are cheering for it. I am not sure that anyone will benefit from it.â€
Cole, whose law practice focuses on broadcasting, including transactional, regulatory and appellate work, and who has represented clients before the Supreme Court and the FCC, said the inquiry was the only thing the FCC could do and that it is â€œat least a couple of years away from adopting any rules. The Notice of Inquiry is the first step. They are easily years away from rules if they are so inclined.â€
But, he noted, the announcement of a public inquiry could have a psychological impact on Arbitron. â€œThis ratchets up the pressure on Arbitron to make everyone happy.â€ But Cole admits heâ€™s at a loss for what that could be since Arbitron has apparently gone to great lengths already to smooth out the bumps with minority objections by reaching settlements with the attorneys general in New York, New Jersey and Maryland in January over the PPM.
The FCC may have backed itself into a corner by questioning the quality of the PPM data, he said. â€œThis raises the question of continued legitimacy of all future decisions made by FCC, not just worried about the PPM data but it now also raises questions about the old data,â€ he theorized. He said, as does the FCC, that the Commission uses Arbitron data to make many of its decisions. While the new PPM data does not recognize a radio stationsâ€™ brand loyalty like the old one did, â€œthat effective emission in PPM,â€ he said sparks a new concern that PPM â€œcould be more accurate and too accurate.â€ That, in turn, sparks an admission of inaccuracy in the diary process.
â€œNo one is surprised by this [inquiry], but I am little surprised by how they have approached it and, deep down inside me, I think the best thing that could happen is that it gets stuck deep down inside [the FCC] and nothing happens.â€