Is the End in Sight for HD?

John Anderson has an interesting page on his website, here, where he gathers up all his posts on HD radio from the past decade, and they tell a fascinating story about industry skullduggery, deception, and FCC complaisance, as well as NPR Labs complicity in the whole sordid saga — progressing from a distrust of the entire arrangement to wholehearted endorsement and a fudging of the data to ensure adoption (detailed here). What follows, though long, is a rundown of some of the juicier entries:


Fattening radio signals in this manner brings up several concerns, of which the primary involves interference. If all radio stations more than double their bandwidth, closely-spaced and smaller-power stations might get drowned out on the dial by higher-wattage neighbors. Real-world tests of IBOC FM broadcasts in Virginia in 2000 produced harmful interference to other radio stations spaced near the digital guinea pig. Recordings of this interference are available online — they sound, basically, like a buzzsaw cutting through a nearby station’s signal.

Better Sound? Listen Closely…
In addition to the interference concerns, the radio industry’s lofty promises of improved audio quality are turning out to be more hype than truth. In fact, a recent article in Current magazine (a publication for the public radio industry) contained this stunning admission: “(The) IBOC model flanks a station’s analog signal with two low-level digital signals.”


FCC Admits Ignorance on Digital Radio, Adopts Standard Anyway
It took only 14 minutes today for the Federal Communications Commission to dramatically decide the future of radio broadcasting. The FCC adopted a Report and Order authorizing the rollout of digital radio. The vote allows radio stations to immediately install In-Band On-Channel (IBOC)-based transmission equipment and, upon notifying the FCC, begin broadcasting using the new transmission standard. Stations will initially run a hybrid analog/digital signal, so as to not make everybody’s analog receivers immediately obsolete. At some undetermined time in the future the FCC will require radio broadcasting to go completely digital — the hope is when that time comes the public will have forked out the hundreds of dollars each for the new “HD Radios” they’ll need….

The vote was 4-0 in favor of adopting the unproven IBOC standard (the fifth seat on the Commission remains vacant). The Commissioners seemed completely unconcerned about the documented evidence illustrating potentially disastrous interference problems with IBOC technology. But the whopper came from the mouth of Michael Copps, who admitted with incredible candor he had no idea what the hell he was unleashing:

“A few questions remain to be settled, including how the IBOC system will function in the real world; what is the potential for and extent of interference that IBOC could cause to existing services; and the technical feasibility of nighttime AM IBOC transmissions.” [Emphasis added]

Everybody involved pretty much admitted from the outset that the digital radio initiative is all about giving the broadcast industry more avenues to make money rather than actually improving radio from the perspective of the listener. Watching the meeting via streaming video felt rather like watching a puppet show.


Bump in the Road to Digital Radio
Guess what? The sound quality of the new “HD Radio” system sucks! That’s the verdict of none other than the National Radio Systems Committee, the industry-sponsored group that develops radio broadcast standards in the U.S. In an internal memo dated May 14 (.pdf, 94K), Milford Smith, chairman of the NRSC subcommittee on digital radio, announced it is “temporarily suspending its IBOC-DAB standards-setting process.” This is due in part to the results of recent on-air tests and a private demonstration held at the Washington, D.C. studios of National Public Radio.


HD Radio: Pay to Play
Ibiquity Digital Corp., patent-holders on the In-Band On-Channel (IBOC) digital audio broadcast standard adopted by the U.S., announced its license fee structure earlier this month. Ibiquity’s technology is proprietary — therefore, going forward, digital radio broadcasting requires two licenses to broadcast: one from the government and one from Ibiquity.

In hopes of enticing early adoption, the initial “one-time” general IBOC license fee to Ibiquity begins at $5,000 per station. If stations wait just three years to convert, however, they will find that fee to be five-fold. Then, there are the residuals: stations that multicast (i.e. carry multiple program streams on one channel) must pay Ibiquity 3% of the revenues derived from the second DAB channel, or $1,000, whichever is greater. This fee will be assessed annually. This is somewhat ironic because National Public Radio led the effort to develop IBOC-compliant multicast capability (something commercial broadcasters initially rebuffed).

The real money’s expected to come from datacasting — the provision of non-broadcast services using some of the DAB bandwidth. Ibiquity wants 3% of any datacast revenue, too — and that will be collected quarterly. Future upgrades to IBOC will also come at a price, especially those “that contain more features,” which is vague enough to mean almost anything (patches will be free).

Ibiquity does plan some exemptions for noncommercial broadcasters, although so far it is light on details. The Corporation for Public Broadcasting has been offering grant money to help non-coms offset the cost of transitioning from analog to analog/digital, but nobody’s said anything about an ongoing subsidy to assist with intellectual property rent-payments.


Public Broadcasters Want Digital Interference Examined
The Corporation for Public Broadcasting seeks proposals to conduct a study of digital radio interference — both existing and projected — in 75 radio markets around the country, including the top 50. According to the RFP announcement, “CPB is concerned with the disenfranchisement of listeners due to the loss of services public radio currently provides to them and the underperformance or lack of HD service . . . when the conversion of public radio stations to HD is complete.” The document itself notes, “CPB has received reports that existing analog listeners have lost reception of their favorite public radio station when new HD signals have gone on the air.”

This is one of HD Radio’s dirty little secrets. In order to accommodate the simultaneous broadcast of both an analog and digital signal, all radio stations will effectively double their spectral footprints (AM stations triple their bandwidth when they broadcast in hybrid mode). Fattening the signals of every radio station is bound to cause interference between stations located near each other on the dial.

Indeed, this problem was prevalent in the technical studies HD Radio’s developer, iBiquity Digital, and the National Radio Systems Committee submitted to the FCC for certification of the technology. Members of the public reported hearing the interference themselves. However, the increased potential for interference was dismissed by HD Radio’s cheerleaders as the price of going digital, and well worth it. . . .

The FCC’s not likely to intervene: it’s already endorsed the HD Radio framework as the “de facto standard” for digital audio broadcasting in the United States, and requires only informal notice from stations who desire to throw up hybrid signals. In fact, the FCC never independently tested the in-band, on-channel (IBOC) framework that HD Radio is built upon, and never expressed any willingness to.

The FCC also set HD Radio’s bar for adoption criminally low, decreeing that it only had to be “superior to analog” in order to receive the rubber-stamp. That obviated the need for a comparative analysis between the many different DAB protocols that exist in the world. . . . To its credit, National Public Radio has long been a skeptic of HD Radio technology, and developed the multicasting functionality which is now being used as HD Radio’s major selling point. It will be interesting to see what the CPB-sponsored study discovers.


Stations Experiment With Beefed-Up HD
It’s already been well-established that the digital radio sidebands of HD Radio signals have the potential (in both the AM and FM environments) to cause significant interference, both to neighboring stations and, in some cases, to the analog host-signal of an HD-enabled station. The issue is so significant that the Corporation for Public Broadcasting and National Public Radio have embarked on not one, but two studies to examine the problem. The first report was pretty damning.

How does iBiquity, the proprietor of HD Radio, respond? By asking for a 10-fold increase in the power of digital FM sidebands. And while the CPB/NPR jury is still out (results from the latest interference analysis won’t be released for at least the next couple of months), HD’s proponents are now bargaining like a used-car salesman.


iBiquity/NPR HD Power Hike In Play
As predicted, the two major players in the HD Radio space — iBiquity, the proprietor of the technology, and NPR, its primary broadcast innovator — have jointly petitioned the FCC to increase the power level of HD Radio sidebands. They’re asking for a blanket 4x increase to the power of digital sidebands for both AM and FM stations, and includes proposed methodology for allowing selected stations to increase their digital power levels by 10x. The joint filing even includes helpful language the FCC is encouraged to adopt in full as as regulation. The National Association of Broadcasters was not far behind in lauding the deal.

Given that this will obviously involve a modification of the “spectral mask” under which a stations’ power must exceed, this request skewers once and for all the notion that HD radio “does not use new spectrum.”

Interestingly, a day after iBiquity and NPR filed their request with the FCC, NPR finally released its full report on its findings with regard to FM-HD power levels. The report has been greatly sanitized, dilutes preliminary findings, and in only one sentence does NPR come flat out and say that a blanket (10x) digital sideband increase is not “necessarily justi[fied].” It does not include the words, “Even at the lower recommended compromise power of 4% (4x), without the expedited development of additional solutions, unregulated harmful interference could occur, with some listeners in fringe areas finding the stations un-listenable.”

Those who have read the report in more detail question its methodology, basically noting that NPR only used a couple of models of receivers for the tests (far less than they did in their quest to technically quash LPFM).

At this stage, I believe the FCC will move quickly to adopt the proposal provided under the cover of NPR. The joint filing gives everybody what they want: all HD-enabled stations get a blanket digital power increase of 4x, while the aggressive can apply for power to jack their digital sidebands to 10x.

At this point, the only thing that could likely stop this from happening is if the FCC were to take a serious look at a (two-year!) pending Petition for Reconsideration that asks the fundamental question of whether HD Radio itself constitutes a spectrum-grab. This latest development seems to buttress that argument….

The only bright spots are iBiquity’s fiscal situation and its lack of penetration into the receiver market. In January, iBiquity conducted its first bona-fide layoffs, firing 15% (20) of its staff. In July, the company’s director of international business development resigned (which explains why iBiquity CEO Smilin’ Bob is jet-setting all over the globe this fall). That same month, iBiquity raised $42 million dollars in money to keep operating. It came with lots of strings attached: some of the funds came in stock from major broadcast investors (like Clear Channel, CBS Radio, Entercom and Radio One); the rest came from three venture firms. iBiquity’s debt to its investors is reaching $200 million….

[T]he uptake of HD in portable receivers is abysmal; iBiquity had to find some no-name electronics maker to make its own first portable device, and the only other current route to adoption is through the Zune. Most notably, when Apple rolled out its iPod Nano shortly afterward, it included analog radio functionality. To put it mildly, consumer electronics manufacturers are not exactly rushing to embrace HD Radio.

It’s almost like this power hike is HD Radio’s last technical gasp. Will listeners trade off analog listenability for questionable HD improvement? Either way, the consequences could be dire.


Bring The Noise Redux: FCC Okays FM-HD Power Increase
With little fanfare on Friday, the FCC approved a blanket four-fold increase in the power of FM-HD digital sidebands, and also established procedures for stations to apply for a power-hike of up to 10x. This outcome was no surprise. For the last two years the proprietors of HD Radio, iBiquity Digital Corporation, and National Public Radio have been wrangling over just how much of a digital FM power boost is needed to replicate existing FM stations’ analog coverage.

The problem is, even with all of the claims of HD’s proponents (on the record, no less) that a fractional-powered FM digital signal can provide the equivalent coverage area of a full-power analog signal, reality has proven disturbingly different. Not only are FM-HD signals difficult to acquire and lock onto on a mobile platform for the long haul, but the signals fail miserably at penetrating buildings. The FCC and HD Radio’s proprietors believe this is the primary reason why the adoption of FM-HD broadcasting “has dropped significantly over the last two years.”

The FCC’s latest digital radio Order is notable for four whoppers. The first is that, as predicted, NPR’s technical analysis was used as a foil to both approve the power hike and pooh-pooh any concerns of increased interference from the increase in digital FM power. It provided neutral political cover for a questionable technical decision.

The second was the optimistically-projected lack of expected interference from the move: “Based on our analysis of . . . data, as well as five years of interference-free FM hybrid digital operations by approximately 1500 stations,” the FCC blesses the FM-HD power hike. The record does not reflect this conclusion. Not only has the FCC received several complaints from listeners in its ongoing digital radio proceeding about interference between digital FM sidebands and nearby analog signals, but the potential amount of interference between the “host” analog signal of an FM-HD station and its digital sidebands is likely to increase because of this Order. This was noted more than a year earlier — by one of the architects of NPR’s preliminary power/interference studies, no less.

The third whopper is the FCC’s callousness toward what higher-power FM-HD sidebands will do to the reception of nearby LPFM stations. Public-interest lobbyists pressed the FCC just earlier this month to take an incremental approach to any FM-HD power increase, noting the FCC’s promises to look into an expansion of LPFM service. The rub is that, under the FCC’s latest decision, any full-power radio station may conduct FM-HD broadcasts at digital power levels well in excess of what any LPFM station is allowed to broadcast with in analog alone. In a nutshell, the increased power of FM digital sidebands constitute a clear and present danger of interference to the reception of LPFM stations. The FCC blew that off: “As a general matter, adoption of these recommendations would constitute a dramatic change in LPFM licensing rules and the relationship between LPFM and full-service stations. Analog LPFM and FM translator stations are secondary services, and, as such, are not currently entitled to protection from existing full-service analog FM stations.”…

Finally, with regard to any increase in digital interference, the FCC’s Order recommends that the conflicting stations first try to rectify the matter between themselves. If this is not possible, the FCC may be called upon to mediate interference concerns, but only if the aggrieved station applies for relief, and only if the complaint contains

at least six reports of ongoing (rather than transitory) objectionable interference. For each report of interference, the affected FM licensee must submit a map showing the location of the reported interference and a detailed description of the nature and extent of the interference being experienced at that location…. The complaint must also contain a complete description of the tests and equipment used to identify the alleged interference and the scope of the unsuccessful efforts to resolve the interference.

If the interference-appeal meets this onerous criteria, the Media Bureau promises to act upon it within 90 days.

Speaking of dramatic changes, this aspect of the digital radio rulemaking puts the burden of proof of harm on the station(s) receiving interference, not the station(s) causing it. FCC spectrum-management rules, with the exception of secondary services (like LPFM) are generally written in such a way that a new service will, by design, work to minimize its impact to nearby spectrum-neighbors. This new FM-HD interference rule not only flips that paradigm, but encourages interference by discouraging stations to report it….

The fault of FM-HD radio is not in a single technical tweak; it’s in the design of HD Radio itself, which overpromises and underdelivers to the detriment of existing analog services. The fact that the FCC is so willing to sacrifice the integrity of analog radio for a crippled digital replacement is deeply disturbing.


How Does iBiquity Stay Afloat?
Many have pooh-poohed the “investigatory action” by a law firm looking into the degraded reception characteristics of HD Radio receivers in certain models of high-end vehicles. The pre-suit, I will admit, is a fishing effort — but then again, some spelunking efforts actually make for justice….

In fact, were these legal-fishermen really looking for good bait, they’d take a hard look at iBiquity itself. Then again, it’s not a fat target, so to speak. Since 2000, the year of the company’s founding, iBiquity claims to have spent $150 million on research and development dollars. The company was not founded with much direct capital, but rather “sweat equity” from its predecessors (USA Digital Radio and Lucent Digital Radio), as well as stock-transfers from its supporting broadcast companies.

To date, the Corporation for Public Broadcasting has given member-stations approximately $50 million in HD Radio “upgrade” grants (some of them of the matching variety). iBiquity has also raised somewhere north of $150 million in direct cash investments from a variety of venture capital firms, many of which have given through multiple rounds of funding.

iBiquity claims there are “nearly 2,000” stations broadcasting in HD nationwide. Given that many are a) public radio stations, which negotiated a bulk license-deal through the CPB and; b) stations who took advantage of early-adopter discounts, let’s gratuitously estimate iBiquity’s pried $30 million out of broadcasters through license fees (an estimate of $15,000 per station for 2,000 stations).

iBiquity claims 3 million HD receivers have been sold to date, the per-unit license fee for each is not disclosed. But hell, let’s be generous again and make it the company’s gross revenue $10 per radio for another $30 million in licensing fees generated. In total, based on research and informed projection (since iBiquity is a private company, and press details of its fiscal status are few), the proprietors have “earned” around $300 million over the last 10 years, with more than half of that spent at the point of or before the company’s founding.

iBiquity’s last reported cash “burn rate” was in excess of $2 million a month; that has likely come down somewhat in recent years. Just do the math. With 115 employees scattered among three states, the burn rate is still likely to be pretty high. It’s like iBiquity is has a money-tree stashed somewhere.

Here’s where a lawsuit would be an excellent strategy. If a crafty firm went after iBiquity for making a defective product, or for deceptive advertising, the weight of legal action might just be enough to bring this albatross crashing down. Too bad there’s no money in it.


More Lumps for HD Radio
2011 has not started out well for advocates of HD Radio. Last week, Microsoft announced it would discontinue production of the Zune portable media player — one of only two portable devices that had built-in HD reception capability. Earlier in the year, at the annual Consumer Electronics Show, HD Radio’s presence was pretty underwhelming. Not good indicators for increasing uptake by listeners.

In addition, the political campaign to defund federal support of public broadcasting has HD squarely in its sights. Over the last decade or so, the Corporation for Public Broadcasting has invested more than $50 million in HD Radio, through infrastructure “upgrade” subsidies to CPB-funded stations and support of National Public Radio’s in-house research division, NPR Labs.

Unbeknownst to many, NPR has been the key innovator when it comes to HD technology. It developed (in full or in part) such features as multicasting, conditional access, “personalized radio,” and revised FM-HD power levels for regulatory purposes. The majority of funding for NPR Labs comes from the Corporation for Public Broadcasting.

This month also saw a radio merger: Cumulus Media announced its purchase of Citadel Broadcasting, creating the second largest radio conglomerate in the country (behind Clear Channel). Citadel and iBiquity had an ongoing program whereby broadcasters could pay for their stations’ “upgrade” to HD through the bartering of advertising inventory.

The deal was unclear about just how much Citadel was prepared to invest in HD station upgrades and how iBiquity would actually get paid. It’s similarly unclear whether Cumulus will continue the program.

Finally, overall broadcaster sentiment is worse than lukewarm about the prospects of HD Radio. At the annual Country Radio Seminar, held earlier this month, the technology was openly criticized. Marc Chase, a former executive at Clear Channel and the Tribune Company, told the gathering that the industry’s poured “billions” of dollars into HD, with little to show for the investment. Broadcaster discontent has publicly intensified over the last year.

All of these developments further call into question just how it is that iBiquity Digital Corporation, HD’s proprietor, remains in business, and whether or not the technology has a viable future.


2 Responses

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