Gordon Smith Remarks at The 2010 Radio Show


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The WARN Act, signed into law nearly four years ago, set up the template for cell phone providers to send out emergency messages to their subscribers. But the resulting system preferred by carriers -- a text-based system with a 90-character limit -- still hasn't been deployed.

So why are radio critics opposed to ensuring the American people have easy access to radio on their cell phones? Maybe they view free, local radio as competition to the audio and data streaming services cell phone customers have to pay for.

Or maybe they are listening to misguided information. There's a lot of misinformation out there regarding radio-enabled cell phones -- myths about what we're trying to accomplish and what is technically feasible.

Today, I want to challenge those myths, by giving you the facts…the realities.

Myth #1: There is no consumer demand for radio.

Consumers tell us otherwise. Here's the reality: Americans would love to have free local radio on their cell phones. In a recent survey, 73 percent of cell phone owners said having free, local radio as an option on their phone is important to them.

Myth #2: Radio receivers would significantly impact the battery life of cell phones.

This, too, is untrue. A typical cell phone with a radio receiver could provide the user with more than a full day's worth of radio listening on a single battery charge.

Now, keep in mind most people charge their phones daily or every other day, which means a radio chip would have little to no effect on battery life.

Myth #3: Integrating radio into cell phones is a costly additional expense for manufacturers.

The reality is the cost to the manufacturers would be very low. When mass produced, radio chips can be integrated into cell phones for pocket change. In fact, three out of four cell phone owners say they would consider paying the one-time cost of enabling a phone with a radio receiver -- that's how much they want local radio.

Myth #4: Critics argue that the size and weight of a chip would be too big and heavy for consumers.

No one wants to bulk up their cell phone, even though we want more options and features. So luckily for cell phone users, a radio chip is smaller than the head of a nail and weighs less than a Tic Tac.

I hope that by sharing the realities, you can help to correct the false information that you hear. If cell phone service providers and handset manufacturers would look past the myths, they'd see that including radio in cell phones could open new revenue opportunities for all our industries.

I've mentioned how this platform would increase radio's reach -- potentially 257 million American subscribers. And through RDS, a song heard on the radio through a cell phone can be "tagged" for later purchase, giving consumers a direct sales point for music…and broadcasters and cell phone providers a new revenue stream.

And I'm told that HD Radio technology in a cell phone will be practical within about a year, creating additional services and revenue streams that become possible with a digital platform.

A radio receiver would also free up network capacity for mobile phone providers. Listeners seeking music could access news and entertainment over-the-air rather than through streaming applications that use the same network bandwidth needed for phone calls.

And as more cell phone providers offer pay-as-you go data plans, a free music alternative would be very attractive to consumers seeking more affordable options.

Clearly, the inclusion of radio in cell phones is a win-win situation for consumers, radio and manufacturers. So, how do we ensure all cell phones are radio ready?

As you know, this issue has been part of our performance tax discussions with musicFIRST -- the group that represents artists, record labels and unions. Our goal in entering into discussions was to shape a better outcome for the industry. And despite good faith discussions, we remain strongly opposed to the Performance Rights Act pending in Congress.

With your help, we have been successful thus far in staving off the Performance Rights Act in the House and Senate.

--Continued on page 3



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