• by Erik Sass  @eriksass1, October 7, 2008

The long saga of Arbitron's Portable People Meter got even longer and more convoluted this week, with big radio broadcasters taking sides on possible action by the Federal Communications Commission concerning the passive electronic measurement device.

Big radio groups are joining forces with Arbitron against the PPM Coalition, an ad hoc group representing another group of radio broadcasters that called for the FCC to investigate PPM's methodology. Although most broadcasters have a variety of formats, in general, the controversy pits radio groups with mainstream formats against radio groups with formats mostly targeting minority audiences, including African-Americans and Hispanics.

The PPM Coalition was formed by minority radio broadcasters and industry organizations including 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.

In September, the Coalition petitioned the FCC to investigate Arbitron's sampling methodology for PPM ratings, which they say under-represents minority listeners, resulting in dramatic drops in their apparent audience size. That, in turn, endangers their advertising revenues.

Among the radio groups supporting Arbitron are CBS Radio, Bonneville, Entercom, Buckley Radio Group, Greater Media, Citadel, Emmis and Megamedia. In a counter-filing to the FCC, the radio groups said Arbitron had demonstrated in previous legal filings that the FCC "lacks jurisdiction to review the PPM Coalition's claims and initiate the request inquiry."

Because it is a private contractual matter, "any alleged deficiencies in the methodology used for the measurement services can, and should, be addressed under relevant state contract law principles," rather than through recourse to regulatory action, the pro-Arbitron group claims.

The broadcasters added that an industry body already exists to perform reviews and grant accreditation to media ratings methodologies: the Media Rating Council. The MRC was formed at the behest of Congress in 1963 as a way for the media industry to engage in voluntary self-regulation, meaning it lacks official legal or regulatory power.

(So far Arbitron has only received MRC accreditation for PPM ratings in Houston, having been rebuffed several times in Philadelphia. The company says it aims to get MRC accreditation, eventually, in all markets where PPM is introduced. However, it does not plan to delay commercialization of the ratings until it has obtained another MRC accreditation outside of Houston. Arbitron is not the only firm to introduce ratings without MRC accreditation. Currently, Nielsen's C3 ratings for TV are being used as currency for ad sales without MRC accreditation.)

As noted, while most of the big broadcasters supporting Arbitron do own stations with formats targeting minority audiences, they're usually a smaller part of the overall business. For example, out of 140 stations owned by CBS Radio, only about 15 have formats specifically targeting African-American or Hispanic audiences. Similarly, out of 24 stations owned by Emmis Communications, four have formats targeting minority audiences.

The FCC, bombarded with filings from all sides, still hasn't indicated whether it plans to mount an investigation of Arbitron's PPM methodology. However, minority broadcasters are using their political clout to put pressure on the commission in other venues. The FCC has also been asked to mount an investigation by the New York City Council, which has no particular authority over the FCC but does represent voters in several key congressional districts.

Separately, U.S. Senator and presidential hopeful Barack Obama wrote a letter to Arbitron requesting that the company delay commercialization of PPM until it receives accreditation from the Media Rating Council. The letter was also signed by his Senate colleague from Illinois, Dick Durbin.

Finally, New York State Attorney General Andrew Cuomo sued Arbitron last week to force it to delay commercialization of PPM ratings in New York, arguing that it is violating the civil rights of minority groups by under-representing minority radio audiences. In response, Arbitron moved up its commercialization schedule by two days, announcing that PPM is now the official currency for radio ad sales in New York and seven other major markets around the country.

Cuomo's office promptly fired back, stating that "Arbitron's decision to release its unreliable and unaccredited radio ratings system is an affront to racial and ethnic minorities in New York and around the country. The Attorney General's Office cautions all advertisers and broadcasters against using these prematurely released ratings as we believe they are flawed and will be the subject of ongoing litigation."