[Federal Register: June 1, 2009 (Volume 74, Number 103)]
[Notices]
[Page 26235-26241]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jn09-41]
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FEDERAL COMMUNICATIONS COMMISSION
[MB Docket No. 08-187; FCC 09-43]
Impact of Arbitron Audience Ratings Measurements on Radio
Broadcasters
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: This document seeks comment on issues relating to the
commercial use of a radio audience measurement device, developed by
Arbitron, Inc., known as the portable people meter (``PPM''). It asks
about the effects of the PPM methodology on competition and diversity,
whether it is sufficiently accurate and reliable to merit the
Commission's continued reliance on it, and the Commission's
jurisdiction to take action in this area should it find an adverse
effect in any of these areas.
DATES: Comments are due July 1, 2009 and reply comments are due July
31, 2009.
FOR FURTHER INFORMATION CONTACT: Mania Baghdadi, Industry Analysis
Division, Media Bureau, at (202) 418-2133, or Julie Salovaara, Industry
Analysis Division, Media Bureau, at (202) 418-0783. Press inquiries
should be directed to David Fiske at (202) 418-0513.
SUPPLEMENTARY INFORMATION: This is a summary of the Federal
Communications Commission's Notice of Inquiry (the ``NOI'') in MB
Docket No. 08-187; FCC 09-43, adopted May 15, 2009, and released May
18, 2009. The full text of this document is available for public
inspection and copying during regular business hours in the FCC
Reference Center, Federal Communications Commission, 445 12th Street,
SW., CY-A257, Washington, DC 20554. These documents will also be
available via ECFS (http://www.fcc.gov/cgb/ecfs). The complete text may
be purchased from the Commission's copy contractor, 445 12th Street,
SW., Room CY-B402, Washington, DC 20554. To request this document in
accessible formats (computer diskettes, large print, audio recording
and Braille), send an e-mail to fcc504@fcc.gov or call the FCC's
Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice),
(202) 418-0432 (TTY).
Summary of the Notice of Inquiry
1. Introduction: In this Notice of Inquiry (``NOI''), we seek
comment on issues relating to the commercial use of a radio audience
measurement device, developed by Arbitron, Inc. (``Arbitron''), known
as the portable people meter, or ``PPM.'' Broadcasters, media
organizations, and others have raised concerns about the use of the PPM
and its potential impact on audience ratings of stations that air
programming targeted to minority audiences, and consequently, on the
financial viability of those stations. They claim that the current PPM
methodology undercounts and misrepresents the number and loyalty of
minority radio listeners. They assert that, because 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. They express concern that such undercounting could
particularly affect the ratings of local, urban-formatted radio
stations that broadcast programming of interest to African-American and
Hispanic audiences. This NOI investigates 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 Commission's own
reliance on it in its rules, policies and procedures. According to its
proponents, the PPM methodology represents a technological improvement
in measuring radio listening. We have a strong interest in encouraging
innovative advancements that lead to improved information and data. We
seek information on whether and how the PPM technological changes
adversely affect diversity on the airwaves as well as the integrity and
reliability of the Commission's processes that rely on Arbitron ratings
data. If there is an adverse impact, we seek comment on further steps
the Commission can and should take to address these issues.
2. Sections 4(i) and 403 of the Communications Act of 1934, as
amended (the ``Act'') gives the Commission broad authority to initiate
inquiries such as this one. The Commission's authority to initiate
investigations under Section 403 is not limited to adversarial
proceedings involving allegations of wrongdoing. Section 403 broadly
authorizes, inter alia, inquiries ``concerning which any question may
arise under any of the provisions of this Act .* * *'' 47 U.S.C. 403.
We have frequently issued Notices of Inquiry under Section 403 in non-
adversarial settings to seek information and comment to determine
whether we should take further regulatory action.
3. Requests that the Commission institute an inquiry have been made
in several contexts. The FCC's Advisory Committee on Diversity for
Communications in the Digital Age (``Diversity Committee'') has passed
a resolution requesting a Commission investigation of Arbitron's PPM
measurement system to determine whether the system is having or will
have a detrimental and discriminatory effect upon stations targeting
minority audiences. Noting that Arbitron is the only company that
currently provides quantitative audience data for radio stations, the
Committee states that the financial success of a radio broadcast
station often depends upon demonstrating to potential advertisers that
the station has a substantial audience of desirable consumers.
According to the Diversity Committee,
[[Page 26236]]
Arbitron's use of an audience measurement service that may not
accurately measure minority audiences could lead to ``irreparable''
financial harm to stations serving such audiences and, thus, lead to
the loss of service that such stations provide to the public.
4. In addition, the PPM Coalition (``PPMC'') has filed an Emergency
Petition for a Section 403 Inquiry (``PPMC Petition''), requesting that
the Commission immediately commence a fact-finding inquiry into the
current PPM methodology. Under the inquiry sought by PPMC, the
Commission would use subpoenas for document production, conduct witness
testimony under oath, and fashion appropriate protective orders as
necessary to avoid disclosure of confidential information. PPMC and
others that supported PPMC's request for a Commission investigation
express concern that the PPM methodology has had a detrimental effect
on the ratings measurements for urban- and Hispanic-formatted stations
and state that this is due to the under-representation of minorities in
the sample panels and a failure to distribute PPM devices within
minority groups. PPMC alleges that the PPM sample is deficient because
only five to six percent of the PPM sample is comprised of cell-phone-
only households, while a significant and growing percentage of young
adults and Hispanics and African-Americans live in cell-phone-only
households. PPMC asserts that 19.3 percent of Hispanic households and
18.3 percent of African-American households are cell-phone-only,
whereas 12.9 percent of non-Hispanic white households are cell-phone-
only. Among other things, PPMC also complains that: (1) PPM has a 66
percent smaller sample size than the diary, often making it impossible
to target age or gender subsets of minority audiences because standard
industry metrics require at least 30 respondents in a cell to run
ratings data; (2) PPM samples are not built using street addresses, and
therefore fail to ensure statistically representative inclusion of
cell-phone-only households; (3) young minorities are reluctant to carry
visible PPMs; (3) Hispanic PPM recruitment methods skew toward English-
dominant persons because potential panelists are identified by origin
rather than by language; (4) PPM response and compliance rates fall
below industry norms; (5) PPMs record exposure to radio signals, but
they do not capture listener loyalty, which is high among minorities;
(6) PPM reports provide less granular data in terms of geography; (7)
PPM reports do not contain income data, country of origin data, or data
that accounts sufficiently for language preferences; and (8) PPM
panelists may be corrupted more easily by radio personnel because the
PPM device often visibly identifies them and their expected
participation is two years instead of the usual one-week participation
in the diary system.
5. PPMC states that radio programmers are taking the preliminary
PPM under-reporting of minority radio listening so seriously that
programmers who can do so are already beginning to abandon formats that
target minority audiences. PPMC and others are concerned that the
stability of the radio industry is at stake because radio broadcasters
rely on the sale of commercial advertising for their only revenue
stream, and Arbitron's data has a direct impact on advertising sales.
While PPMC concedes that Arbitron has indicated its willingness to re-
examine its sampling methods and make improvements by 2010, it contends
that those improvements would be ``far too little and far too late.''
According to PPMC, most advertisers are likely to accept Arbitron's
assertions that PPM results are more accurate than diary results, and
will rely on flawed PPM data.
6. New Jersey Broadcasters Association has alerted the Commission
of the ``unique and urgent circumstances'' in the State, arguing that
``the PPM sampling process employed by Arbitron in New Jersey is
suspect in its erratic deployment and intrinsic underrepresentation of
the population'' of many New Jersey counties, specifically Monmouth,
Ocean, Morris, and Atlantic. ``To demonstrate this fact, consider the
disparity in PPM deployment in two adjacent New Jersey counties,
Monmouth (pop. 588,000) and Middlesex (pop. 732,000). Arbitron deployed
347 PPMs in Middlesex County, but only 96 PPMs in Monmouth. This
represents 261% greater PPM sample size in Middlesex County, which only
has a 25% greater population! Likewise, Morris County (pop. 454,000)
has only 87 PPMs collecting listenership data, while its next door
neighbor Union County (pop. 480,000) has 260 PPMs; an almost 200%
greater population. Ocean County (pop. 564,000) has no PPMs at all
resulting in two different sampling methodologies being used in one New
Jersey market.'' Letter from Paul S. Rotella, Esq., President & CEO,
New Jersey Broadcasters Association, to Jonathan S. Adelstein,
Commissioner, FCC (Jan. 28, 2009).
7. Arbitron opposes PPMC's Petition and challenges the Commission's
jurisdiction and the availability of remedies it can offer. Arbitron
challenges PPMC's assertion that the ratings of minority-oriented
stations suffer when PPM methodology is used. Arbitron provides several
examples where the rankings of such stations remained the same or
improved when PPMs were used. Arbitron maintains that PPM samples
effectively represent Blacks and Hispanics in the 18-34 age group, and
across other factors such as geographic location and language
preferences. Arbitron is also implementing improvements to PPM
methodology, as discussed below. Allscope Media supports Arbitron,
noting that a delay of PPM service will harm the radio industry.
Arbitron is also supported by J.L. Media, Inc., which contends that the
Commission should not get involved in this dispute because Arbitron is
continuously improving PPM methodology and the Commission lacks
precedent for such involvement.
8. Background: Arbitron is an international media and marketing
research firm serving radio, television, cable, online radio, and out-
of-home media as well as advertisers and advertising agencies in the
United States and Europe. Arbitron's main businesses include measuring
network and local market radio audiences in the United States;
surveying the retail, media, and product patterns of local market
consumers; and providing application software used for analyzing media
audience and marketing information data. Stations and advertisers use
these ratings to negotiate advertising prices. To provide service to
local stations and local advertisers, Arbitron has delineated more than
300 local geographic markets (called Metro Survey Areas or Metros)
based on radio stations' audience ratings. More than 60 percent of
commercial radio stations and three-fourths of the U.S. population of
at least 12 years of age reside in these radio markets. Arbitron
publishes listening data on commercial radio stations that obtain a
minimum audience share in the radio market.
9. These radio market definitions are considered the industry
standard and are used by the Commission for purposes of applying its
ownership rules and evaluating them periodically to determine whether
they remain necessary in the public interest. In its quadrennial
ownership review proceedings, the Commission relies on the information
produced by Arbitron to define local radio markets for purposes of
fulfilling its statutory obligation to evaluate the continued necessity
of its local radio ownership rule as well as the cross-ownership rules.
Moreover, the
[[Page 26237]]
Commission relies on Arbitron-defined radio Metro markets, where these
exist, when it makes its determination whether a particular license
application, transfer, merger, or acquisition complies with the local
radio ownership rules.
10. For many years, Arbitron has relied on a diary-based audience
measurement system. A diary is a small foldout, pamphlet-style journal
in which diary keepers record the radio stations, satellite radio
channels, or Internet radio stations they listen to during each day of
the survey week. A diary keeper records the time of day, the location,
and the start and stop times of each listening occasion. The diary also
requests certain demographic, socioeconomic, and lifestyle
characteristics. Arbitron contacts potential diary keepers by calling a
sample of households across the country. The company places over five
million calls every year to potential diary keepers for participation
in the survey. On average, nearly 75 percent of those asked to do so
consent to filling out a radio diary. Potential diary keepers are first
contacted by telephone and then sent the survey via mail. Arbitron
mails 2.6 million diaries to survey participants each year.
11. Arbitron has recently replaced its diary-based rating system in
certain markets with the PPM system. According to Arbitron, the PPM is
a mobile-phone-sized device that consumers wear throughout the day. The
PPM detects inaudible identification codes that are embedded in the
audio of certain programming to which the consumer is exposed. An
encoder at the programming or distribution source inserts the inaudible
identification codes. In addition, a station monitor is installed at
the programming source to ensure audio content is encoded properly. At
the end of each day, each survey participant places the PPM device in a
base station to recharge the battery and to send collected codes to a
household collection device known as a ``hub.'' The household hub
collects the codes from all the base stations in the survey household
and transmits them to Arbitron. Arbitron describes the PPM as an
enhancement over the diary method because it relies on a passive
measurement of actual exposure, rather than memory recall; it delivers
more detailed data that can be utilized by program directors; and PPMs
allow Arbitron to provide audience measurement for children ages 6 to
11 and cell-phone-only households.
12. Arbitron has indicated that it plans to replace its diary-based
audience measurement system with the PPM in the top 50 radio markets by
2010. It has already implemented PPMs in 14 local markets: New York,
Los Angeles, Chicago, San Francisco, Dallas-Ft. Worth, Houston,
Atlanta, Philadelphia, Washington, DC, Detroit, Nassau-Suffolk,
Middlesex-Somerset-Union, Riverside-San Bernardino and San Jose.
According to Arbitron, these markets account for 51.7 percent of the
estimated radio station revenue in the top 50 radio markets. As
discussed below, Arbitron has committed to improving its PPM
methodology and has taken steps to do so. Arbitron states that its has
steadfastly demonstrated its willingness to work with all stakeholders,
including advertisers, stations, the Media Rating Council (``MRC''),
and the Commission to help bring the measurement of radio audiences
into alignment with the measurement of audiences for competing media.
13. The MRC sets industry standards for audience measurement. These
standards are designed to ensure reliability. Among other activities,
MRC establishes and administers ``Minimum Standards'' for rating
operations; performs accreditation of rating services on the basis of
information submitted by these services; and conducts audits, through
independent certified public accounting firms, of the activities of
rating services. Arbitron reports that it has received MRC
accreditation for its PPM services in the Houston and Riverside-San
Bernardino markets. More generally, however, in his statement at the
Commission's July 29, 2008 en banc hearing, George Ivie, MRC Executive
Director and Chief Executive Officer, stated that MRC has ``important
ongoing concerns'' about the implementation details of the PPM
measurement system. Concerns and ongoing dialogue with Arbitron
surround ``two key measurement issues: Response rates and panelist
compliance with the PPM technique.'' In February 2008, MRC announced
that its audit committee voted not to grant accreditation to the PPM
service in the Philadelphia and New York PPM markets. MRC is currently
reviewing the PPM services in Philadelphia and New York, as well as in
a number of other major markets including Atlanta, Chicago, Dallas-Ft.
Worth, Detroit, Los Angeles, San Francisco, and Washington, DC.
14. On July 8, 2008, the Chief of the Media Bureau wrote,
separately, to Arbitron and MRC seeking a response to the concerns
raised by minority and other broadcasters. Both Arbitron and MRC
responded. The letters to Arbitron and MRC from the Bureau Chief, as
well as Arbitron's and MRC's responses, will be included in the docket
of this proceeding. MRC submitted several documents detailing various
aspects of Arbitron's implementation of the PPM system and MRC's
accreditation of it. While acknowledging that the PPM technology has
the potential to be ``disruptive'' on a short term basis, Arbitron
claimed that PPMs provide audience measurements that are superior to
the diary method. It added that it is committed to working with
minority and Spanish-language broadcasters regarding their concerns
that the PPM method is having a disproportionate impact upon them and
their audiences as reflected in decreases in their ratings. Arbitron
detailed specific measures it takes with respect to Black, Hispanic and
Spanish-dominant panelists to enhance their participation in PPM
surveys, adding that the sample proportion of Blacks, Hispanics and
young adults is higher, on average, for PPM service than it was for the
diary service. Arbitron also asserted that broadcasters operating in
markets where PPM methodology has been introduced are learning from the
data and executing new programming and marketing strategies designed to
optimize the ratings results for an electronic meter rather than a
diary methodology.
15. The Attorneys General of New York, New Jersey, and Maryland
have investigated Arbitron's PPM implementation in their respective
states to assess whether the PPM methodology undercounts minority
audiences. Earlier this year, Arbitron entered into separate settlement
agreements with the three states and agreed to improve its sample
participant recruitment methods. On January 7, 2009, the New York
Attorney General and the New Jersey Attorney General announced separate
settlement agreements with Arbitron, in which Arbitron agreed, among
other things to: (1) Ensure a higher level of participation across
racial demographics by increasing the recruitment of individuals who
only use cell phones and by combining an address-based sampling
methodology with telephone-based sampling; (2) make reasonable efforts
to obtain MRC accreditation in those markets; (3) promote minority
radio by funding advertising campaigns and by making monetary
contributions to minority trade associations; and (4) make payments to
the states to resolve the claims against it. In addition, Arbitron
entered into an agreement with the Attorney General of Maryland on
February 6, 2009, to improve its ratings methodology for the
Washington, DC
[[Page 26238]]
and Baltimore radio markets. Arbitron agreed to: (1) Increase its
recruitment of cell phone-only households; (2) recruit racial and
ethnic minorities commensurate with the racial and ethnic composition
of the geographic areas being surveyed, using home addresses and not
just telephone numbers, to identify potential participants; (3) meet
numerical measures of proportionality between Arbitron's sample results
and the actual populations in those radio markets; and (4) provide
additional information about the PPM sample results to broadcasters,
advertisers, and other users of the data. Arbitron reports that it is
successfully meeting its obligations under these agreements.
16. Arbitron has also committed to extending some of these
improvements to all PPM markets. It confirmed in March 2009, that it
has been implementing in all PPM markets a number of the key
methodological enhancements that the company committed to in its
agreements with the Attorneys General of New Jersey, New York and
Maryland. Arbitron's methodology improvements for all PPM customers
focus on four areas: (1) Cell-phone-only sampling; (2) address-based
sampling; (3) in-tab compliance rates; and (4) response metrics.
Arbitron promised to increase the sample target for cell-phone-only
households in all PPM markets to an average of 15 percent by year-end
2010, and in the interim, raise the current target of 7.5 percent to
12.5 percent in PPM markets by the end of 2009. PPMC asserted that
Arbitron's previous five to six percent cap on cell-phone-only
households in its PPM samples under-sampled households with young
adults and Hispanics and African-Americans, who are more likely than
other demographics to use only cell phones. Based on data from 2007,
PPMC stated that the percentage of cell-phone-only households is nearly
16 percent among all U.S. households, 19.3 percent for Hispanics, and
18.3 percent for African-Americans. In addition, Arbitron expressed its
commitment to use address-based sampling for at least 10 percent of its
sampling efforts by late 2009 and for at least 15 percent of its
recruitment efforts by the end of December 2010 in all PPM markets.
PPMC contends that address-based sampling increases the likelihood that
cell-phone-only households are included. Furthermore, Arbitron claimed
that all PPM customers will see greater transparency for more of the
sample metrics in the Arbitron PPM survey research, including the
distribution of sample by zip code and by cell phone status. PPMC
argued that broadcasters need to know ratings by zip codes in order to
tailor program schedules and advertising schedules to advertisers that
serve geographically discrete minority communities. Arbitron also
stated that it will continue to share with all customers any current
and future findings of the impact of nonresponse on the PPM service.
PPMC argues that the fewer people who agree to participate in a random
sample, the less representative the sample is.
17. In addition, Arbitron has created a training program, called
``Feet on the Street,'' which is designed specifically to reach out to
young African-American and Hispanic respondents in Arbitron PPM panels
to help them improve their use of the meters. If such a respondent has
not demonstrated good habits of carrying the meter within the first
eight days of being on a PPM panel, a bilingual Arbitron representative
will meet with him in person within his first 28 days on the panel,
attempt to show him how to use the meter, and provide incentives to use
the meter properly. Arbitron states that the program is scheduled to
have bilingual representatives ``knocking on the doors'' of newly-
recruited Hispanics and African-Americans aged 18-34 in the top ten PPM
markets by the end of April 2009. Arbitron reported that the program's
pilot tests in April 2008 in New York and Philadelphia resulted in
double digit gains in the in-tab rates of young African-Americans and
Hispanics and a decreased turnover rate. Arbitron therefore anticipates
that the program will improve the representation of these groups on its
PPM panels.
18. Discussion and Request for Comment: Broadcasters, particularly
minority broadcasters, have raised serious concerns that the PPM
methodology is flawed and that its undercounting of minority audiences
will harm diversity and competition by harming the revenues of minority
and urban-formatted broadcasters. National Association of Black Owned
Broadcasters (``NABOB'') Executive Director James L. Winston, in
testimony at the Commission en banc hearing, indicated that the
financial well-being of minority owned stations is dependent on their
ability to generate advertising revenue based on audience shares, as
measured by Arbitron. According to Winston, the PPM methodology is
critically flawed, resulting in a bias against reporting of minority
audiences and potentially jeopardizing the viability of minority
stations. Specifically, Winston pointed to PPM test data from New York,
Chicago, and Los Angeles that revealed a decline in average quarter
hour (AQH) ratings and market rank for virtually all of the stations
serving African-American and Hispanic communities. According to
Winston, some of the concerns with the PPM are attributable to
Arbitron's deficiencies in the recruitment, retention, and
participation of young African-Americans and Hispanics in the sample
panel. In addition, NABOB asserts that MRC's PPM accreditation process
may have uncovered additional factors that impact the reliability of
the ratings computed for minority-owned broadcast stations.
19. We seek comment and empirical evidence with respect to the PPM
methodology and its effect on minority and urban-formatted station
revenues in markets where PPMs are currently being used. Commenters
should describe any changes or projected changes in program service to
their local communities as a result of lowered advertising sales
revenue based on a decline in audience ratings as measured by PPMs.
What has been the experience in other radio markets where the PPM
methodology is being used? Do PPMs measure active and sporadic
listening in the same manner and, if not, what impact does the
difference in treatment have on ratings? Are these concerns that the
Commission can or should address?
20. We also seek information concerning Arbitron's sampling methods
to determine the impact on the radio market of commercialization of
PPMs, particularly with respect to the shift to collecting audience
data by PPMs rather than by diaries. Broadcasters and others have
raised concerns that the samples for the electronic data collection may
produce inaccurate estimates, particularly in some demographic groups
and in certain states like New Jersey. Arbitron, on the other hand,
defends the PPM methodology, asserting that the sampling approaches
used for PPMs and diaries are essentially the same. Further, as noted
above, Arbitron has claimed that the PPM methodology is superior to
diary ratings in measuring listening. We have a strong interest in
encouraging technological innovation and do not wish to inhibit the
introduction of a new methodology that represents a significant
improvement. Accordingly, we invite comment as to whether the PPM
methodology produces ratings that are more accurate than diary ratings.
21. Reliable audience ratings are important to determine critical
demographic information about listeners, which radio stations compete
for the same listeners, and how many listeners each radio station
attracts according to specific demographic
[[Page 26239]]
characteristics. This information is used by stations and potential
advertisers to develop station-specific advertising strategies. With
these concerns in mind, we seek comment on the issues raised regarding
Arbitron's sampling, particularly samples selected for deployment of
PPMs. Specifically we seek comment on the issues raised in several
analyses of the implementation of PPMs in Houston, Philadelphia, New
York, and any other markets in which PPMs are being used. We seek
comment on allegations that the sampling methodology undercounts and
misrepresents audience sizes, particularly minority audiences. Are
these allegations valid? If so, we seek comment on means that could be
employed to correct the problems to ensure that the reported audience
ratings accurately reflect actual listening. We also seek comment on
the difference in ratings between markets where an address database was
used to select the sample and markets where samples were chosen using
telephone-based surveys. Could ratings changes have resulted from a
flawed sample selection process? Are cell-phone-only households
underrepresented, as some allege, and if so, what is the effect of the
alleged undersampling of cell-phone-only households? Does this skew the
results and, if so, how? Is there a disparity, as PPMC alleges, between
minority and non-minority groups in terms of cell-phone-only usage, and
if so, to what extent? Commenters are invited to provide statistics on
current cell-phone-only use in the United States. How should we assess
Arbitron's level of cell-phone-only households in its panel samples in
comparison to these statistics? What changes could be made to improve
sample selection to deal with alleged problems? We seek comment on the
suggestion of an Arbitron executive that differential compensation
between demographic groups could be useful to improve the size of
underrepresented demographic groups. We further seek comment on the
likely difference in results between the diary and PPM sampling
methods, such as the effect of the alleged undersampling of demographic
subgroups on the resulting ratings data and the ability to determine
the audience of radio stations targeting specific demographic groups
(e.g., African-American women ages 18-34). We also request comment on
allegations that PPM response rates are below suggested averages and
that Arbitron's failure to raise the average response rate is a factor
in its failure to receive accreditation for the PPM surveys. What could
be done, and what is being done, to increase response rates? The PPMC
observes that ratings by zip code are important for programming and
sales operations, and also notes that country of origin is often a
significant factor in format selection for Spanish radio. We seek
comment on the lack of zip code and country of origin data to accompany
PPM ratings. Will this impair stations' and advertisers' ability to
assess the accuracy of the results? We also seek comment on the
collection of data on listeners aged 6 to 11 years old and whether the
sample from this age range should be reallocated to the 12 and over age
groups.
22. We note that Arbitron has reached settlements regarding its PPM
methodologies in New York, New Jersey and Maryland, has adopted
improvements to the methodology, and has committed to continuing to
improve its PPM methodology. Have these improvements resolved the
problems in whole or in part? Are the commitments made by Arbitron to
improve the PPM methodology in the settlement markets and voluntarily
in others sufficient to cure the problems cited by commenters? Are
these improvements consistent with MRC's standards for accreditation?
23. Finally, we seek comment on the importance and adequacy of MRC
accreditation in ensuring the integrity of the sampling methodology and
the resulting audience measurements. We also seek information on the
status of Arbitron's MRC accreditation applications and any objections,
problems or concerns that have been raised regarding them.
24. Use of Arbitron Data by the Commission: The Commission's local
multiple ownership rules limit the number of radio and television
stations one entity may own in a local market, and they also limit the
cross-ownership of radio stations, television stations and/or
newspapers in the same geographic market. See 47 CFR 73.3555. The local
radio ownership rule limits the number of radio stations one entity can
own within a local radio market. See 47 CFR 73.3555(a). The Commission
must define a radio market in order to determine whether license
transfers, mergers and acquisitions comply with the numerical limits of
the local radio ownership rule. The Commission relies on radio Metro
markets, defined by Arbitron, to determine compliance for stations
located within, or garnering sufficient listeners located within, the
geographically defined Arbitron radio Metro markets. 2002 Biennial
Regulatory Review--Review of the Commission's Broadcast Ownership Rules
and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, 68 FR 46286, 46308 (2003), aff'd in
part and remanded in part, Prometheus, 373 F.3d at 435, stay modified
on rehearing, No. 03-3388 (3d Cir. Sept. 3, 2004), cert. denied, 545
U.S. 1123 (2005). For markets geographically outside Arbitron-defined
Metros, the Commission relies on signal contours to determine
compliance. As described earlier, Arbitron's delineation of radio
markets, which is based on its audience measurement data, is the
industry standard.
25. How do the concerns regarding the reliability of the PPM
methodology implicate the Commission's use of Arbitron data in
reviewing transactions to determine compliance with the Commission's
broadcast ownership rules? Do the alleged declines in audience ratings
for some stations when PPMs are utilized impact radio market
definitions or Arbitron's designation of radio Metro markets? Do issues
regarding the reliability of Arbitron's PPMs raise concerns about the
Commission's reliance on Arbitron radio markets to determine compliance
with the Commission's local ownership rules? Are there any other more
reliable data available on which the Commission should rely?
26. In addition, the Commission relies on the information produced
by Arbitron to fulfill its statutory obligation to evaluate the
continued necessity of its local radio ownership rule as well as the
cross-ownership rules. The Commission is statutorily required to
quadrennially review its multiple ownership rules to determine whether
the rules remain necessary in the public interest. The Commission is
required to repeal or modify any regulation it determines to be no
longer in the public interest. In past reviews, the Commission has
evaluated the performance of media markets as part of its effort to
determine whether the multiple ownership rules remain necessary in the
public interest. Commenters are asked to address the integrity of
future Commission analyses or trend reporting using Arbitron data
derived from PPM measurements. Would the Commission's use of Arbitron
data based on PPM data affect its policies and rules regarding media
ownership, ownership diversity, and competition? If so, how would use
of PPM data impact the reliability of Commission analysis and decision-
making? Should licensees be able to rely on ratings obtained through
the use of PPM methodology for Commission purposes, such as in
demonstrating compliance with local ownership rules
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in transfer and assignment applications? Should MRC accreditation be
required before licensees can rely on PPM methodology in filings with
the Commission?
27. Commission Action: PPMC supports its argument for Commission
jurisdiction in this matter by noting that the Commission relies upon
the accuracy of Arbitron's market definitions as a central component of
its multiple ownership analysis. PPMC contends that the Commission has
ample authority to seek information about the validity and accuracy of
Arbitron's ratings data that may potentially affect the formulation of
the Commission's own rules and regulations. PPMC asserts that Section
403 provides the Commission authority to conduct an investigation into
PPMs. Arbitron opposes this investigation, stating that the Commission
lacks jurisdiction and relevant expertise and cannot address the role
of advertisers and the impact of their decisions regarding the stations
on which they decide to purchase advertising time. Bonneville
International Corporation and other broadcasters support Arbitron's
position that the Commission lacks jurisdiction to review PPMC's claims
and initiate an inquiry.
28. Commenters that advocate particular actions should specifically
address the Commission's statutory authority to take such actions. Does
the Commission have jurisdiction to require the submission of
information concerning PPM methodology or to regulate PPM methodology?
If so, what is the basis of that jurisdiction? Is the Commission's
reliance in its rules and procedures on Arbitron ratings data and
market definitions a sufficient basis to require submission of the data
necessary to evaluate their reliability? Does the impact of Arbitron
ratings data on diversity and competition in the radio industry, which
the Commission is charged with fostering, provide a basis for the
Commission to require submission of information concerning the new
ratings methodology or to take other action? Is the operation of PPMs
so intertwined with a type of broadcasting transmission that the
Commission's jurisdiction extends to this matter? Arbitron provides
participating broadcasters encoding equipment at no cost, which
broadcasters use to embed a unique inaudible code into their audio
signals. The PPMs receive and record these codes. Does the transmission
of encoded broadcast signals to Arbitron's PPMs, made possible with
Arbitron's encoding equipment, bring the operation and use of PPMs
under the Commission's oversight? If so, what statutory provisions
would govern the Commission's jurisdiction over PPMs?
29. If the Commission has jurisdiction over this matter, we also
seek comment on the specific actions, if any, the Commission should
take in response to the information it receives in this investigation.
Should the Commission modify its own reliance on Arbitron market data
in applying its multiple ownership rules if it determines that PPM data
are unreliable? Commenters are also invited to suggest any steps that
they believe would be useful in the conduct of the Commission's
investigation.
30. Comment Filing Procedures: Pursuant to sections 1.415 and 1.419
of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may
file comments and reply comments on or before the dates indicated on
the first page of this document. Comments may be filed using: (1) The
Commission's Electronic Comment Filing System (ECFS), (2) the Federal
Government's eRulemaking Portal, or (3) by filing paper copies. See
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121
(1998).
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/
or the Federal eRulemaking Portal: http://www.regulations.gov. Filers
should follow the instructions provided on the Web site for submitting
comments. For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number. Parties may also submit
an electronic comment by Internet e-mail. To get filing instructions,
filers should send an e-mail to ecfs@fcc.gov, and include the following
words in the body of the message, ``get form.'' A sample form and
directions will be sent in response.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number. Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail (although we continue to experience delays in
receiving U.S. Postal Service mail). All filings must be addressed to
the Commission's Secretary, Office of the Secretary, Federal
Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
31. People with Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an e-mail to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (TTY).
32. Comments and reply comments will be available for public
inspection during regular business hours in the FCC Reference Center,
Federal Communications Commission, 445 12th Street, SW., CY-A257,
Washington, DC 20554. These documents will also be available via ECFS.
Documents will be available electronically in ASCII, Word 97, and/or
Adobe Acrobat.
33. Ex Parte Information: The NOI is an exempt proceeding. Ex parte
presentations regarding the issues addressed in the NOI are permitted,
except during the Sunshine Agenda period, and need not be disclosed.
See 47 CFR 1.1204(b)(1).
34. The Media Bureau contact is Julie Salovaara at (202) 418-0783.
Press inquiries should be directed to David Fiske at (202) 418-0513.
35. Ordering Clauses: Accordingly, it is ordered, pursuant to the
authority contained in Sections 1, 4(i) & (j), and 403 of the
Communications Act of 1934, 47 U.S.C 151, 154(i) & (j), and 403, that
this Notice of Inquiry is adopted.
36. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Notice of Inquiry, to the Chief Counsel for Advocacy of
the Small Business Administration.
[[Page 26241]]
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E9-12638 Filed 5-29-09; 8:45 am]
BILLING CODE 6712-01-P