FCC Proposes Satellite-Based Digital Radio : Broadcasting: The new service would have a nationwide reach and offer better quality sound. The conventional industry opposes it.

The Federal Communications Commission opened the door Thursday to a new kind of radio broadcasting that is expected by the end of the decade to deliver sound to homes and cars that will be free of the hiss and crackle of conventional radio.

The FCC proposed allocating frequencies for satellites to deliver digital audio radio, which would allow listeners to enjoy sound on a par with compact discs.

The move creates the potential for new competition for conventional AM and FM broadcasters, which are opposed to the nascent service and are working to develop land-based digital audio radio broadcasting.

“They’re trying to do for audio what cable TV did for video,” said John Mansell, an analyst with Carmel-based Paul Kagan Associates. “There are a lot of narrow niche listeners who aren’t served by conventional radio right now.”

The only current applicant to provide the service, Washington-based Satellite CD Radio, is proposing broadcasting 30 nationwide channels of commercial-free, CD-quality music by 1996.

For a fee of $5 to $10 a month, subscribers with special digital audio radios, which are not yet available, would receive music formats that would include classical, swing, children’s entertainment and folk rock, President Robert K. Briskman said.

The expectation is that the special radios, which would also receive AM and FM broadcasts, would cost $150 to $200 when mass-produced, he said.

“It’s a terribly significant milestone and allows us to proceed,” Briskman said. “The next step is to get permission to build our satellites.”

The digital signals, made up of the ones and zeros of computer codes rather than wave-like radio signals, would be received on an antenna about the size and shape of a credit card, he said. Not only would digital broadcasts be clearer, but they would be available across the country.

That nationwide broadcasting is one reason why the radio industry is objecting to the new technology, said Jeff Baumann, general counsel for the National Assn. of Broadcasters.

“Right now broadcasting is based on localism, on getting the local message out,” Baumann said. “Thirty or 40 channels with no obligations at all (to local communities) may have the potential to undermine the ability of local stations to survive.”

The broadcasting industry is working on development of digital audio radio that would be transmitted over existing bands from land-based towers, Baumann said, adding that digital radio of any kind probably won’t become a reality until near the end of the decade.

“We question whether the commission should be allocating more radio bands,” he said. “We think the public is well served by the existing ones.”

Digital radio has been available over cable in some areas for about a year, analyst Mansell said. Although subscriptions are building slowly, cable companies are excited about the technology because it is pulling in customers who weren’t previously cable subscribers, he said.

In proposing the setting aside of 50 MHz of spectrum for satellite digital audio radio services, the FCC acknowledged the tremendous changes enveloping the broadcast industry.

Commissioner Ervin S. Duggan said he has advocated “balancing our enthusiasm for digital audio radio against the need to afford incumbent broadcasters a fair chance to join the technological race” by encouraging both land-based and satellite systems.