FCC Announces Inquiry Into PPM Methodology

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Posted by madcityradio.com on May 18, 2009 at 13:23:23:

FCC Announces Inquiry Into PPM Methodology
May 18, 2009

The FCC has formally launched a Notice Of Inquiry into Arbitron's PPM methodology, after months of complaints from minority groups and broadcasters over underrepresentation.

In this Notice of Inquiry (which can be read here), the Commission is seeking "comment on issues relating to the commercial use of" the PPM device. The FCC notes that "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."

Acting Commissioner Michael Copps stated that, "we have a strong interest in promoting ownership diversity... If our renewed commitment to promote minority broadcast ownership is to succeed, we must understand the ecosystem in which minority owners operate. We do not regulate Arbitron, but then we do not regulate banks either, and yet we should -- indeed, we must -- take into account the difficulties of access to capital if we are going to develop effective rules. Anything that affects media diversity and minority ownership -- and I am not drawing any conclusions here -- affects our ability to do our job. Moreover, the Commission relies on Arbitron data to evaluate broadcast radio transactions, issue periodic industry trend reports, and conduct congressionally mandated reviews of our media ownership rules. Without confidence in the underlying data, those important functions could be undercut."

Copps continued, "I want to emphasize that this proceeding is not about preserving the status quo or inhibiting technological progress. To the contrary, Arbitron should be commended for trying to improve its ratings methodology and for committing significant resources to that effort."

Commissioner Jonathan Adelstein, who had previously called for an FCC inquiry into the PPM, said that he is "pleased that the Commission is prepared to conduct our own fact-finding and examination to determine whether PPM is 'sufficiently accurate and reliable to merit the Commission?s own reliance on it in its rules, policies and procedures.' If the Commission does not conclude that PPM is in fact reliable and accurate, or if there are still many unanswered questions, the Commission may have to reconsider whether its reliance on Arbitron?s market definitions and audience ratings calls into question the reliability and integrity of the Commission?s own analysis that uses Arbitron information. The Commission may have to also consider whether prohibiting broadcasters? participation in PPM altogether is in the public interest."


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