PPM Coalition takes Arbitron/SBS court order to the FCC


An order from the New York State Court forcing Spanish Broadcasting System radio stations to resume Arbitron PPM encoding has sent the PPM Coalition flying to the FCC with renewed requests for an investigation of the ratings service. The letter from the Coalition details a series of testy actions and responses between SBS and Arbitron and calls the matter “a struggle for the very existence of communications diversity and radio broadcasting in service to minority audiences.”

The coalition says that SBS tried to work with Arbitron to improve the service; failing to achieve satisfaction, it “requested that Arbitron issue a credit in accordance with the terms of the parties’ contracts.” SBS says Arbitron rejected that request “without explanation,” prompting SBS to reject the practice of paying license fees to Arbitron. About seven weeks back, Arbitron responded by ceasing to provide ratings data to SBS, and about a week back, SBS ceased encoding its station signals.

The Coalition says SBS attorneys had less than an hour’s notice when the company was pulled into court as Arbitron sought and obtained the court order to resume encoding.

The Coalition claims its members were forced to sign on to PPM due to Arbitron’s monopoly status in the radio ratings business, and because of that status, the contracts provide little recourse for those companies dissatisfied with Arbitron’s performance.

“Arbitron asserts a breach of contract without adequately putting the contracts in perspective related to the ongoing proceedings before the Commission and Congress. Prior to this public disclosure by Arbitron, these agreements had been protected by confidentiality provisions which prohibited the PPM Coalition from making copies available to interested parties. With their disclosure, it becomes clear that, because Arbitron is the monopoly provider of radio ratings information in most major markets, broadcasters and advertisers have been required to accept unreasonable terms in the agreements. Furthermore, contracts that were entered into at a time when Arbitron provided diary-based ratings (i.e., prior to the introduction of PPM service) required broadcasters to accept PPM methodology prospectively without any opportunity to review it or opt-out when the flaws in the new methodology became known. Even when the MRC denied accreditation to PPM surveys in all of SBS’s PPM markets, the harsh provisions of the agreements gave it no escape mechanism. Arbitron disclaimed any warranty as to the accuracy, validity, or value of its ratings services. In fact, despite the denial of accreditation in 18 markets, Arbitron has yet to publicly acknowledge that anything is wrong with its methodology.”

The letter concludes, “Arbitron’s court filings characterize these proceedings as the result of a few vocal and aggressive minority owned or controlled broadcasters, rather than placing them rightfully in the context of a struggle for the very existence of communications diversity and radio broadcasting in service to minority audiences. The PPM Coalition renews its request that the Commission investigate the accuracy and reliability of Arbitron’s PPM methodology, particularly in light of the recent decisions by the MRC not to accredit and Arbitron’s recent tactics toward SBS.”

RBR-TVBR observation: Regardless of one’s opinion of the legitimacy of the PPM Coalition’s cause, the FCC’s jurisdiction to resolve this issue remains in question. Does the FCC’s role in protecting diversity (along with localism and competition) apply, or is it a stretch? Is Ed Towns (D-NY), Chairman of the House Committee on Oversight and Government Reform going to step back in? He tried to cool things down in December, but in February events seem to be going into heating up mode. Stay tuned.