Impact of Arbitron Audience Ratings Measurements on Radio Broadcasters, 26235-26241 [E9-12638]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 74, Number 103 (Monday, June 1, 2009)]
[Notices]
[Pages 26235-26241]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12638]


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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 (https://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

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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

[[Page 26240]]

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: https://www.fcc.gov/cgb/ecfs/ 
or the Federal eRulemaking Portal: https://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