• by Erik Sass , July 1, 2009

As executives from the radio business and Arbitron line up to testify before Congress and the Federal Communications Commission considers potential intervention, a key player in the controversy over Arbitron's Portable People Meter has finally emerged from its secret chambers. On Wednesday, the publicity-shy Media Rating Council sent a letter to the FCC affirming that the MRC has the resources and authority necessary to resolve the conflict over PPM radio ratings -- in other words, advising the FCC to butt out.

Known for its secretive accreditation process for media ratings, the MRC was nonetheless clear about its authority: "Our process is sound, and we believe that any attempt to replicate our industry representation and expertise by a government entity would be difficult if not impossible."

Still, it's unclear how the MRC can reconcile the conflicting demands of broadcasters, the FCC and Arbitron itself, given its lack of regulatory power to enforce its decisions.

There are strong political overtones to the current dispute over Arbitron's PPM ratings methodology, which minority broadcasters say under-represents key minority demos -- especially African-American and Hispanic male adults ages 18-34 -- leading to large apparent drops in their audience sizes under PPM measurement.

Minority broadcasters previously enlisted the help of the attorneys general of New York, New Jersey and Maryland. Most recently, the FCC has opened an inquiry into PPM that parallels congressional hearings. However, as the MRC points out in its letter, Congress has already made dispensations for the oversight of media ratings -- the MRC itself.

The MRC is a quasi-official organization formed at the behest of Congress in 1963 to vet media ratings as an industry-supported alternative to direct government regulation. It is funded by contributions from media companies, which agree to use MRC accreditation as a minimum standard for a new ratings system.

With this agreement in place, ratings firms are compelled to "voluntarily" seek MRC accreditation. However, because participation in the MRC process is technically voluntary, companies like Arbitron have considerable leeway to conduct their business while accreditation is still pending.

So far, Arbitron has only received MRC accreditation for ratings from the Portable People Meter, a passive electronic measurement device, in two markets: Houston, Texas, and Riverside, Calif. Its repeated failure to obtain MRC accreditation in other markets has provided ammunition for Arbitron's critics in the radio business, who have long demanded that Arbitron obtain MRC accreditation for PPM in at least one other market before proceeding with the national rollout of PPM ratings.

Arbitron has ignored these calls, saying it still plans to obtain MRC accreditation in every market where PPM is used -- but only after the service has already gone live as the currency for radio advertising deals.

This means there is no legal or regulatory recourse for broadcasters that insist on MRC accreditation for radio ratings. Furthermore, there's no determination of whether the MRC's refusal to grant accreditation to PPM has anything to do with its representation of minority demos, or is related to something else entirely.

That's because MRC evaluating committees are composed of industry experts who evaluate new ratings methodologies in closed conferences to protect the intellectual property of companies submitting methodologies for accreditation. The MRC doesn't reveal any details about its deliberations -- except to confirm when a methodology has finally received accreditation.

Of course, the MRC may still divulge the details of proprietary ratings methodologies to impartial officials and legislators for their own closed conference reviews. This raises the possibility that the congressional hearings and FCC inquiry are intended to lay the groundwork for an official request for information pertaining to PPM accreditation, potentially including the minutes of MRC deliberations and confidential documents submitted by Arbitron.

Indeed, the MRC letter seemed to hint at this possibility with its promise to "render whatever assistance is necessary" to the FCC to understand its inner workings.