FCC Poised to Approve Pay Radio Service

Federal regulators are prepared to approve a plan that will create a new breed of radio stations that can be heard anywhere in the country and will probably be the first pay radio.

After five years of work, the Federal Communications Commission is expected to set aside a portion of the airwaves for the service today. The service is to be transmitted nationally or regionally by satellite in digital CD-quality sound, FCC officials said.

The action also clears the way for four companies, which requested the FCC action, to bid on licenses to provide the service. The companies are CD Radio of Washington, American Mobile Satellite Corp. in Reston, Va., Digital Satellite Broadcasting in Seattle and Primosphere in New York.

Most of the broadcasting industry opposes the service, digital audio radio, which they see as a threat to local radio service.

The FCC says the new service is unlikely to divert enough listeners to jeopardize conventional local broadcast stations. Commission action has been delayed several times over the years by objections raised by broadcasters and members of Congress.

After companies win licenses, it will take at least three years for stations to go on the air. Access to the new stations is likely to cost $5 to $10 a month and will be marketed mainly to people who spend a lot of time in their cars.

It’s unclear whether consumers will have an appetite for the new service, which will cost companies millions of dollars in start-up expenses.

Under proposals filed with the FCC, people could subscribe to packages of channels, such as weather, sports or opera. The satellite radio service also can transmit data such as stock quotes to car receivers.

To receive the service, a customer would need a special radio and tiny disk-shaped antenna. Ideally, a single radio would receive both the new service and local broadcast signals.

The broadcast industry plans a switch to digital technology so local stations will have CD-quality sound.

Proponents of the new radio service say they want to work with broadcasters and radio makers on creating a single radio.

The FCC’s action also is supposed to put the four companies on notice that--like traditional radio broadcasters--they will have public interest obligations. What those will be has not been determined. They also will have to offer political candidates discounted advertising rates.