• by Erik Sass  @eriksass1, May 18, 2009

The Federal Communications Commission said Monday that it is opening an inquiry into radio ratings calculated using data from Arbitron's Portable People Meter, a passive electronic measurement device that has replaced paper diaries in the country's top markets.

The move seems to suggest that under Barack Obama, the FCC will take a more aggressive approach to regulatory issues than it did during the Bush administration.

The FCC inquiry will focus on Arbitron's method for collecting PPM data from its sample audience groups -- especially minority audiences, including African-Americans and Hispanics in key age demos.

Soliciting comments from experts and interested parties, the FCC noted that "broadcasters, particularly minority broadcasters, have raised serious concerns that the PPM methodology is flawed and that its under-counting of minority audiences will harm diversity and competition by harming the revenues of minority and urban-formatted broadcasters."

Over the last year, minority broadcasters have complained that under-counting of minority listeners has led to steep apparent drops in their audiences when Arbitron switched from paper diaries to PPM. Saying this threatens to put them out of business, they formed an advocacy group in 2008 called the PPM Council, which included broadcasters and industry organizations Inner City, Entravision, Border Media Partners, Spanish Broadcasting System, Univision, the National Association of Black-owned Broadcasters, the Minority Media and Telecommunications Council, the Spanish Radio Association, and the Association of Hispanic Advertising Agencies.

These groups wrote public letters to Arbitron and took their case to state attorney generals and Congress. This produced a variety of responses, including legal action by the attorneys general of New York State, New Jersey and Maryland, who charged Arbitron with violating various civil rights statues. (All the cases were eventually settled out of court.)

But the FCC decided not to open an inquiry into PPM in 2008 -- a move that Arbitron applauded, adding that the FCC doesn't have the regulatory power to do so. Here, Arbitron was supported by broadcasters including CBS Radio, Bonneville, Entercom, Buckley Radio Group, Greater Media, Citadel, and Emmis, which said the issue falls under the purview of the Media Rating Council -- a quasi-official industry body established at the behest of Congress in the 1963 to oversee media ratings accuracy.

So far, Arbitron has not obtained MRC accreditation for PPM in most of the markets where it is currently employed. The company says it plans to eventually obtain MRC accreditation in every market.

Now that the FCC is under Democratic control, however, it may be more amenable to taking an active role in regulation. Two weeks ago, Acting Chairman Michael Copps, who replaced the Republican Kevin Martin in January, met with a newly convened Diversity Council to set an agenda that encourages minority ownership of broadcast media.

Further, the PPM issue -- and the support of minority broadcasters -- are both important to Obama, who, as a presidential hopeful, wrote a letter to Arbitron urging the company to address PPM's alleged shortcomings. Still, some doubt on its jurisdiction remains; the FCC is also seeking comment and expert opinion as to whether it has the right to launch a more intrusive investigation and potentially enforce regulatory remedies.