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CEA Opposes Required FM Chip

August 17, 2010: As the NAB and MusicFirst, representing record labels, negotiate over the terms of a performance royalties agreement, the head of the Consumer Electronics Association has come out against any requirement that FM receivers be included in mobile phones and other devices, a key part of the proposal, Ars Technica reports.

CEA President Gary Shapiro said, "The backroom scheme of the NAB and RIAA to have Congress mandate broadcast radios in portable devices, including mobile phones, is the height of absurdity."

Many radio executives have long backed the idea of FM receivers in mobile phones, with Emmis CEO Jeff Smulyan a particular proponent of the idea, and adding FM chips to electronic devices was among the proposals released by the NAB earlier this month as under discussion with the label reps. And Ars Technica reports that labels are on board with the idea too, with a MusicFirst rep saying the FM chips would give consumers more music choices.

But in the absence of a legal mandate, consumer electronics manufacturers would have to support the idea as well, and it appears from Shapiro's remarks that that's not likely to happen. Shapiro points out, "The performance royalty legislation voted out of the Senate Judiciary Committee does not include this onerous and backward-looking radio requirement."

NAB EVP Dennis Wharton stressed to Ars Technica that no agreement with the labels has been finalized, but said that including radio chips in mobile devices as part of the legislation "seems to us to be a reasonable idea." He also said it is "no surprise" that the CEA is against the idea, "since trade associations generally always oppose new rules."


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