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News Archive: September 2010

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9/30/10 - Net Neutrality Now Sliding Down Tubes [link to this story]

After the clusterf*ck circus, near-"deal"-breaking, and back-channel discussions sparked by a judicial ruling stripping the FCC from preventing data discrimination online, and nothing (substantive) doing from the agency itself as a result, the ball has been tossed to Congress. Where it landed with a thud.

Rep. Henry Waxman (D-CA) was poised to introduce a bill that would have effectively been a "compromise" - on an issue in which "compromise" would have meant throttling the FCC's regulatory authority and leaving lots of loopholes for data discrimination. Bad, bad news.

Fortunately, that bill has apparently died in the womb, and the do-nothing Senate is not expecting any network neutrality-related legislation to make the hurdles before this session of Congress ends. The election-time cash-lubricant style of lobbying goes on, however.

Perhaps more would be getting done if Congressfolk and their staffs weren't so busy defaming and defacing enemies online. What the f*ck, is the Capitol now the country's most prestigious junior-high school?

This is a non-partisan failure: a system failure of governance, not one of a party with actual balls being blocked by a party with none. What is patently clear now is that neither major party has the balls to take a stand on the issue of network neutrality.

In the meantime, the FCC appears poised to allow the same tiered-pricing regime that dominates the wired broadband marketplace be applied to the wireless world, with significant (and unexplored) implications.

Where have the reformistas been in all of this? Suspiciously quiet about the latest wrangling on Capitol Hill, and otherwise putting on tepid "waffle-shows" to chastise regulators and lawmakers for neglecting this important issue. Unimpressive at best.

In the United Kingdom, the two largest broadband Internet Service Providers are all but openly soliciting business that would allow the throttling of traffic based on payment.

Quoting TalkTalk's executive director of strategy and regulation, Andrew Heaney, "There are [already] huge levels of discrimination over traffic type. We prioritise voice traffic over our network. We shape peer-to-peer traffic and deprioritise it during the busy hour."

Nice dodge, good sir, but you forgot to mention one thing - "traffic-shaping" to maintain a certain level of quality-of-service is much different from slowing down traffic based on fiscal incentives. The former is good network-management; the latter is simple greed.

2011 does not appear to be a promising year for an open Internet. The longer regulators and lawmakers dawdle, the more likely it is that ISPs will simply make up their own marketplace-rules as they go along - and they are not likely to be consumer-friendly. What a shame; there is plenty of it to go around, too.

9/23/10 - Making Waves on Verge of Larger Distribution [link to this story]

Michael Lahey, the maker of what most likely is the best documentary yet-produced on the modern microradio/LPFM movement, Making Waves, has announced that the film is now available for free viewing online at Fancast (ironically, a Comcast-owned outlet).

In addition, Lahey says there's a good chance that Netflix will pick up distribution of the documentary. Here's how he says we can all help going about making that happen:

For small, indy films like Waves, my distributor has to show Netflix that there is potential viewership, so they've created a page for Making Waves on Netflix where people can request the film. If enough people request the film, Netflix will then begin carrying it....[The Netflix page] will say "Save to Queue" below the poster. Click on that, and you're done.

When I did the search, I didn't see the prior Waves, but perhaps that's just because Netflix knows enough about me now to put the correct movie on display first. Regardless, its release date is listed as 2004, so if you've got that, then you know you're helping out the right film.

I am very excited that Making Waves may be making a major jump with regard to distribution. The film's simply too entertaining, informative, and well-produced to be relegated to the margins. Fingers crossed.

9/19/10 - HD "Lawsuit" Gaining Traction? [link to this story]

An interesting observation noted by Keeping the Public in Public Radio, who referenced this post to a thread on a broadcast-related e-mail listserve about the possibilities of zinging iBiquity Digital Corporation with legal action, including the potential of bringing the company down as a result, written by someone who's been following the potential litigation effort more closely than I:

Whether any of us believes there's a chance the victims will win, the litigation will cost a fortune. The lawyers are looking for victims and witnesses. Since I've probably done more [HD reception] field testing than anyone...I've been asked to participate either as a witness or a complainant....

I haven't decided if I'll participate or wait for a subpoena. If they use my market as a test they'll probably have an air tight case. IBUZ here is an absolute disaster. HD-2 is useful only as an STL to feed a translator....As it stands, IBUZ can be inoperative for weeks at a time on stations run by the industry's largest corporations.

There's a lot of money to be made here. I just hope I can get my lawyer correspondence course finished in time to get some of it. I'll bet it'll be in litigation as long as the BP lawsuits will.

Time, in the legal sense, is on the side of HD critics - the longer any potential litigation plays out, especially if it ultimately targets iBiquity, the more likely the company will drown in the cost of defending itself.

Finally, an addendum to my previous post: some have e-mailed to chide that I neglected to remark that iBiquity, among all else, is an intellectual property company, of which HD Radio is its primary product, and it (reportedly) holds hundreds of patents, of which only some are related to HD Radio.

Other iBiquity IP (such as audio codecs) are licensed out to other non-terrestrial broadcast users (such as XM/Sirius) and wireless phone service providers.

With that said, I suspect the revenue stream from these areas is small relative to the company's overall income and corporate orientation (which nobody really knows), and is surely not enough to keep the company afloat. Hey iBiquity: open your books and prove me wrong.

9/9/10 - How Does iBiquity Stay Afloat? [link to this story]

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

This first quasi-legal shot-across-the-bow to HD Radio is not directed at the originators of the technology - iBiquity itself. But there are two ways in which, should this legal effort gain momentum, could hurt iBiquity badly:

1. Receiver manufacturers, sniffing even the hint of pending litigation about the claims-versus-quality of HD Radio, will take a full pass or further delay adoption of the technology. Why rope yourself, knowingly, into a possible lawsuit in the future?

2. Manufacturers countersue iBiquity for false advertising et cetera. HD Radio's proprietors have made claims about the technology that simply do not hold up, as this legal probe demonstrates. The fact that there may be enough pissed-off HD Radio listeners down the road will make manufacturers point to the real culprit - the maker of the proprietary HD technology itself - and attempt to shift all blame to iBiquity.

In fact, were these legal-fishermen really looking for good bait, they'd take a hard look at iBiquity itself. Then again, it's not a fat target, so to speak.

Since 2000, the year of the company's founding, iBiquity claims to have spent $150 million on research and development dollars. The company was not founded with much direct capital, but rather "sweat equity" from its predecessors (USA Digital Radio and Lucent Digital Radio), as well as stock-transfers from its supporting broadcast companies.

To date, the Corporation for Public Broadcasting has given member-stations approximately $50 million in HD Radio "upgrade" grants (some of them of the matching variety).

iBiquity has also raised somewhere north of $150 million in direct cash investments from a variety of venture capital firms, many of which have given through multiple rounds of funding.

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

iBiquity claims 3 million HD receivers have been sold to date, the per-unit license fee for each is not disclosed. But hell, let's be generous again and make it the company's gross revenue $10 per radio for another $30 million in licensing fees generated.

In total, based on research and informed projection (since iBiquity is a private company, and press details of its fiscal status are few), the proprietors have "earned" around $300 million over the last 10 years, with more than half of that spent at the point of or before the company's founding.

iBiquity's last reported cash "burn rate" was in excess of $2 million a month; that has likely come down somewhat in recent years.

Just do the math. With 115 employees scattered among three states, the burn rate is still likely to be pretty high. It's like iBiquity is has a money-tree stashed somewhere.

Here's where a lawsuit would be an excellent strategy. If a crafty firm went after iBiquity for making a defective product, or for deceptive advertising, the weight of legal action might just be enough to bring this albatross crashing down.

Too bad there's no money in it.

9/4/10 - HD Radio Roundup [link to this story]

Lots has been happening since I started formally dissertating on the debacle that is HD Radio. Below is a collection of intriguing snippets and informed prognostication:

1. HD Radio Reception. Mediageek Paul Riismandel recently posted two articles on Radio Survivor dealing with real-world HD reception in a major market (in his case, Chicago), using a bottom-end (~$80) HD receiver. The results are not impressive. On FM, Paul sez,

I find that the technology of cramming a digital signal in next to analog one has too many compromises to be successful. The bandwidth for the HD channels is not enough to offer significantly better fidelity for the primary HD channel, and the leftover bandwidth available for HD2 and HD3 provides sound quality that does not surpass what is available online or on satellite radio. Importantly, tuning in a clear HD signal can be a very finicky process that can try one’s patience.

AM-HD engenders even less enthusiasm (love the graphic, BTW): "I consider HD Radio on AM to be mostly useless and not worth the effort. It’s especially not worth the loud digital hash noise I receive on my analog-only radios on the frequencies adjacent to the HD stations. It’s like a line of digital litter strewn across the AM radio highway."

Relatedly, a law firm has begun investigation into a possible litigation against automakers for marketing a defective product - in this case, HD receiver capability with potentially deceptive advertising. According to the law firm of Keefe Bartels LLC, the money quote is this:

HD car radios are plagued by an inability to receive the digital signals transmitted by FM and AM radio stations and a significantly reduced sound quality when such signals are received. Such problems coupled with the increased costs for HD car radios call into question the utility of this supposed technological innovation. Consumers are being enticed to purchase HD car radios that commonly fail to perform or provide any benefits and features. The additional cost to the consumer is both unwarranted and unnecessary when the HD radios do not work as they are supposed to.

One can understand, with situations like these, why receiver manufacturers have been reticent to roll out HD-capable receivers - the transmission robustness simply isn't there. This is an historic reticence, which has plagued "HD" radio throughout its initial development and deployment phase.

2. HD Radio Frustration. One of HD's highest-profile industry proponents, New York's WOR-AM Chief Engineer Tom Ray, apparently reached the end of his rope trying to install an aftermarket HD-capable receiver in an automobile. To quote WOR's news director, "HD Radio sucks!" That's a ringing endorsement.

Relatedly, Continental Electronics Senior Scientists Dave Hershberger published a powerful piece in Radio World detailing the real-world implications of raising FM-HD digital power by as much as a factor of 10, as rubber-stamped by the FCC in January.

The technical detail just embellishes a stark conclusion: "[An FM-HD power increase] will increase receiver susceptibility to...the possibility of 'digital capture' of the receiver....Additionally...higher digital power results in increased intermodulation between the analog and digital signals, resulting in noise components in the stereo baseband area."

In plain English: an increase in FM-HD power levels is quite likely to degrade analog FM reception, especially to the host-station, and every FM station considering an HD power hike must make a reasoned judgment about the "engineering tradeoffs" necessary to implement a more robust HD signal. Is it really worth sacrificing analog reception? This is a critical question everybody's dancing around.

3. International Implications. One of HD Radio's highest-profile non-U.S. enthusiasts, Markus Ruoss in Switzerland, has been fighting against the tide to get HD implemented in his country. According to this recent article, that effort has reached an end. No word for what this means in terms of the "Euro HD Alliance," of which Ruoss was a prime mover.

Meanwhile, in Canada, the Canadian Association of Broadcasters - who were spearheading an effort to introduce HD nationwide - disbanded in June. This while other Canadian broadcasters are turning off their alternate-band DAB transmitters as well, and the reception of DAB in the United Kingdom - an early adopter - leaves much to be desired. Another sign that the failure of digital radio is a technically agnostic phenomenon.

4. Cross-purposes. Much has been made of the National Association of Broadcasters' recent efforts to legislate FM reception in mobile wireless devices.

This is nothing new: as various government agencies began considering a 21st century emergency communications warning system back in 2008, the NAB floated a technical paper explaining how analog FM technology could be easily implemented in wireless devices to augment such a service.

This new effort, incidentally, does not mention HD as a method of transmitting emergency messages. Take that for what you will.

After all of this, what still puzzles me is: how does iBiquity stay in business? Licensing fees from broadcasters and transmitter-manufacturers was supposed to jump-start the company's revenue stream.

But the company's primary source of long-term income is supposed to be royalties from receiver sales. Given the lukewarm reception of the consumer electronics industry to HD Radio, how can iBiquity stay afloat, without a sea-change in its business model?

The company's 10 years old, and still existing on venture capital. Something's got to give, and sooner rather than later.