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The RIAA and radio broadcasters are considering a plan that would ban sales of cell phones without a FM tuner from the U.S.  (Source: GraniteGrok)

The coalition is convinced that Congress will obey their edict, should they give one.  (Source: OMB Watch)
Why let the free market decide when the technology is so essential?

Whether it's suing dead people or simply suing living ones for millions of dollars for illegally downloading a few tracks, media watchdog the Recording Industry Association of America (RIAA) seems to gravitate towards controversy like a moth to a flame.  The divisive organization is back at it again, this time demanding that the U.S. government impose a drastic mandate on cell phone production.

The RIAA will look to introduce a provision into Congress's pending legislation, the Performance Rights Act, which would mandate that all cell phones be built with FM radio receivers.

The seemingly bizarre mandate is the keystone of an elaborate game of financial chess between radio broadcasters and the RIAA, with the implied assumption being that Congress will do whatever the pair say.  

The RIAA wants to cut the longstanding copyright exemption that allows radio stations to pay less than full performance fees to labels and artists (satellite radio and webcasters, by contrast, pay the full fee).  The National Association of Broadcasters (NAB) opposes this measure, but is reportedly near a deal with RIAA-led alliance musicFIRST.

Under the deal radio stations would agree to pay $100M USD more to labels and artists, but in exchange the RIAA would back the broadcasters plan to force 
all cell phones or other mobile devices in the U.S. to feature FM tuners.  Speaking with ArsTechnica, musicFIRST commented, "As regards the chip, this is a key issue for the radio industry.  musicFIRST, too, likes FM chips in cell phones, PDAs, etc. It gives consumers access to more music choices."

The Consumer Electronics Association, which represents the key players of the electronics industry, is ardently opposed to the plan which it says seeks to impose damaging restrictions on the free market.  CEA president Gary Shapiro, "The backroom scheme of the [National Association of Broadcasters] and RIAA to have Congress mandate broadcast radios in portable devices, including mobile phones, is the height of absurdity [and is] not in our national interest."

The NAB says no deal is finalized, but NAB's Dennis Wharton comments, "However, if there is a decision made by the Board of Directors to go forward and seek legislation, including radio-enabled chips in mobile devices in possible legislation seems to us to be a reasonable idea."

They say the CEA's complaints about market regulation are just sour grapes, commenting, "It's no surprise that CEA opposes this, since trade associations generally always oppose new rules. CEA also opposed DTV tuners in digital television sets; the FCC decided that having DTV tuners in TV sets was a good thing, and passed a rule that gave consumers access to local TV stations on DTV sets."

"We would argue that having radio capability on cell phones and other mobile devices would be a great thing, particularly from a public safety perspective. There are few if any technologies that match the reliability of broadcast radio in terms of getting lifeline information to the masses."

So is mandating radio tuners in cell phones the same thing as mandating DTV tuners in TV sets?  The RIAA and NAB seem convinced it is.  And they seem equally convinced that Congress will do their bidding, should they choose to roll out a finalized version of their market regulation scheme.





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