(1) up to eight commercial radio stations in radio markets with 45 or more radio stations, no more than five of which can be in the same service (AM or FM),
(2) up to seven commercial radio stations in radio markets with 30-44 radio stations, no more than four of which can be in the same service (AM or FM),
(3) up to six commercial radio stations in radio markets with 15-29 radio stations, no more than four of which can be in the same service (AM or FM), and
(4) up to five commercial radio stations in radio markets with 14 or fewer radio stations, no more than three of which can be in the same service (AM or FM), provided that an entity may not own more than 50 percent of the stations in such a market, except that an entity may always own a single AM and single FM station combination.

In the FCC’s latest proceeding on whether to loosen these and other restrictions, broadcasters argued that satellite radio and Internet services like Pandora make these limits less necessary. The Commission disagrees:

“Satellite radio still only serves a small portion of all radio listeners and millions of listeners do not have broadband Internet access,” the FCC says. “Moreover, these audio programming alternatives are national platforms that are not likely to respond to conditions in local markets. Therefore, we propose that our local radio ownership rule continue to focus on promoting competition among broadcast radio stations in local radio listening markets.”

Speaking personally, I think that the FCC is right about this. Services like Pandora or Last.fm have yet to demonstrate any significant local presence anywhere, as opposed to the precious core of broadcast radio stations that really serve cities, towns, and rural areas with live news and information.

But the agency is proposing to eliminate its radio/television cross ownership limits, and everybody’s definitely starting to wonder how Internet only stations and music services compare with AM/FM broadcasters, audience metrics-wise. Folks are getting pretty touchy about the issue, too. Of late, Edison Research did an audience study for Pandora that included some Average Quarter Hour share data. Around the same time, Arbitron issued a statement questioning the wisdom of comparing Internet radio log file data with Arbitron audience estimates.

“There are many areas to be carefully considered when comparing Arbitron audience estimates with those from another source,” the Arbitron commentary noted. “We advise clients to avoid comparing self-reported audience estimates from Internet music services to Arbitron radio audience estimates,” given these differences:

• The difference between “one-to-many” broadcast stations and “one-to-one” Internet music services;
• The differences between Arbitron’s published methodology and calculations for its audience estimates and the estimates used by Internet music services;
• The ability of the provider to determine if a person is completing the survey task and should be counted as “exposed” to the content; and
• The reliability of self-reported demographic data and the steps taken to validate the information.

Meanwhile, Edison hit the ceiling over an Inside Radio piece on the issue that the research group called ”grossly inaccurate.” According to the excerpt published by Edison, the Inside Radio story claimed that the Edison study ranked Pandora figures with local radio stations via Arbitron stats.

“Edison has never (as in never ) reported anything other than the AQH figures for Pandora – full stop,” Edison’s statement insisted. “We defy Inside Radio or any interested party to come up with a ‘ranker’ from Edison that compares Pandora ‘alongside’ any terrestrial radio station.”

So is the consensus that broadcast radio and the Internet remain apples and oranges? Tim Westergren of Pandora would appear to disagree. This week he told the Wall Street Journal that Arbitron’s perspective reflected a “concerted effort” to keep his company out of the broadcast radio loop. “The broadcast industry does not want the world to know about us, basically,” Westergren declared.

Actually, big radio does want to know about Pandora, it seems, to the extent they can use the specter of Internet radio to convince the FCC that it should relax its local ownership rules. That tactic clearly isn’t working, so far. But if Internet radio actually develops a serious local presence, things might change.

Although radio is still very popular, with 92% of respondents saying that they listen to AM/FM radio; people are less likely to say that they are profoundly impacted by it or use it as a way to discover new music. Only 22% of those surveyed say that AM/FM radio has a “big impact” on their lives. People are much more likely to report that their cell phones (64%), broadband Internet (49%) and even satellite radio (27%) are having a big impact on their lives.

One of the most interesting (and sad) findings to me was that radio is becoming less and less of a tool for music discovery. When asked, “Among internet, television, radio and newspapers, which do you turn to first to learn about new music?”, 39% of respondents said “radio” and 31% said “Internet.” Although more people said radio, this is a huge decline from 2002, when 63% of respondents said that they turned to radio first to learn about new music. Most strikingly, among 12 to 24-year-olds, the Internet (52%) has surpassed radio (32%)  as a the first place to turn when seeking out new music.

Other interesting findings include:

-84% use/own a cell phone

-52% of those surveyed have listened to online radio

-44% of those surveyed own an iPod/digital music player

-12% use/own satellite radio

-31% said they were aware of HD radio and 3% use/own HD radio

-The use of an iPod/MP3 player has the most impact on radio listening for 12 to 34-year-olds, with 23 to 27% reporting that they spend less time listening to terrestrial radio due to the use of a digital music player

On the positive side of this, though, among young people ages 12-24, 40% said they would listen to AM/FM radio “a lot more” or “somewhat more” if they were able to access it through a cell phone radio tuner. Additionally, 51% of all respondents said they would be very disappointed if their favorite AM or FM station was no longer on the air, with 78% of respondents saying they would listen to as much AM/FM radio in the future as they currently do “despite increasing advancements in technology.”

So, although technology is nipping at terrestrial radio’s heels; there’s still room for radio to remain relevant for young people if it continues to reinvent itself and expands its reach to mobile platforms. To get more details on this study, see the full report (PDF) on the Edison website.

#12 in our series on radio trends of the decade

Everybody knows the fate of over-the-air radio over the last ten years. “On Demand Killed the Radio Star,” as Boston Globe Media put it in 2005, going so far as to ask whether terrestrial radio is on the way out. Consolidation led to poor broadcasting choices like over-advertising and de-localization, the story goes. MP3 players filled the void. The standard estimate is that radio listening has fallen back to 1994 levels. Among consumers 18 to 24 years old, the tune-in rate has dropped by almost 22%.

But there’s one service that has bucked that trend: National Public Radio. In March, Arbitron surveys indicated that, by the height of the 2008 election, NPR now had an audience of 27.5 million weekly listeners, a jump of 7 percent over the previous year. Total tuning in to all NPR stations had grown to 32.7 million weekly listeners.

Listening to individual NPR shows also soared: 15% up for All Things Considered; 9% for Morning Edition; 21% for Talk of the Nation; and an amazing 13% for non-drive time Fresh Air.

Why this success? Everybody attacks NPR (including me), for all kinds of reasons. It’s too liberal; it’s too conservative; it’s too pro-Israel and/or too pro-Palestinian. The organization endlessly stumbles over issues like whether Mara Liasson should appear on Fox TV news. And NPR’s still got real challenges ahead, among them: this economic downturn, an aging audience, and a radio station base that critics say has become decidedly un-local.

But whatever you think about the service, public radio stands out like a ballerina in a broadcast landscape packed with eight second sound bite shows and ultra partisan talkers. And that’s why it’s ruling while commercial radio is drooling. As we’ve reported, the balance of new radio stations over this decade have been public stations. And NPR is moving fast to build a strong footprint in mobile and Internet-land. By any standard of measurement, NPR is one of the radio success stories of this decade.

It looks like Arbitron’s controversial Portable People Meter is still in hot water with the government. The  device, which measures user listening habits sans a written diary,  is scheduled to be the subject of a hearing by the House  Committee on Oversight and Government Reform on Wednesday,  December 2. This is the committees’ second investigation of the controversial gadget.

“With an unprecedented decline in ratings among popular minority television and radio stations, we must explore the possibility of methodological flaws in the implementation of the PPM,” declared its Chair Edolphus Towns (D-NY, called “ET” by his staff, we’re told).  “As it stands now, the current system jeopardizes the future of minority broadcasting.”

The Portable People Meter is worn by the participant, sort of like a pager. It picks up radio signals around the user and keeps track of the stations to which he or she is listening. Critics of the PPM says its sampling methodology includes too few minority radio fans and that Arbitron recruits an insufficient number of cell phone only households for the device (which are often minority households). Arbitron responds that the  PPM is much more accurate than the old  diary system.

PPM opponents, among them many of the nation’s civil rights groups and minority broadcasting associations (and Stevie Wonder), asked the Federal Communications Commission for a formal investigation of the device, but  the agency offered only a notice of inquiry. Three states have required improvements in the PPM, among them New Jersey. New York, and Maryland.

Anyway, tough talk coming from Towns about this issue:  “I remain deeply concerned that increased use of the PPM may unfairly threaten the financial viability of minority targeted radio stations whose advertising revenues depend on the size of their rated audience.  In addition, there is a serious risk that certain groups of minority listeners will continue to be undercounted, imperiling minority audience radio stations and decreasing the diversity of opinions in radio broadcasting.”

It’s all music to the ears of Hispanic Technology and Telecommunications Partnership, which sent us a  statement on the news. “Arbitron’s PPM system is harming a critical medium that has played a transformative role in the social, political, and economic development of communities of color,” said HTTP’s Sylvia Aguilera. “HTTP calls on Arbitron to use this hearing as an opportunity to correct its flawed PPM methodology and begin engaging in responsible business practices.”