AT&T Agrees To Active FM Chips in New Android Phones

AT&T's decision that 2016 and future specifications for Android smartphones will include activated FM chips is a boon to radio broadcasters, said NAB and broadcast attorneys Tuesday. AT&T's agreement to activate the chips is “a tipping point” in the effort to get the chips activated in all smart phones, Emmis Communications CEO Jeff Smulyan said. Emmis and NAB are behind NextRadio, an app designed to take advantage of activated FM chips by allowing smartphones to display interactive content and targeted ads that are tied to broadcast radio content. AT&T's move to activate the chips “marks a new beginning in mobile technology,” NAB President Gordon Smith said in a statement.

It's not clear what's behind the timing of AT&T's decision. Smulyan pointed to an NAB ad campaign and public response as the catalysts for the change. Some industry officials speculated the timing could be connected to AT&T's recently approved buy of DirecTV, but AT&T declined comment on the motivation for the change. The Multicultural Media, Telecom and Internet Council recently asked the FCC to support smartphone FM chip activation, while CEA weighed in against commission involvement (see 1507230034).

Before AT&T, Sprint was the only major carrier that supported the activated FM chips. With AT&T on board, other companies are likely to follow suit, Smulyan told us. At the NAB show in April, NAB officials pointed to Apple as the most important holdout on the FM chip, since 75 percent of smartphones sold in 2014 without their chips activated were iPhones (see 1504120004). Even the Sprint iPhone is sold without an activated chip, NAB said.

Broadcast radio on the smartphone is important to radio broadcasters, Drinker Biddle broadcast attorney Howard Liberman said. “So many people are carrying around these devices,” Liberman said. “Those listeners are important to radio stations,” he said. With the NextRadio app, those stations will be able to take advantage of the targeted advertising and interactive content opportunities that are associated with online content, Smulyan said. At an SNL Kagan broadcast finance summit in June, targeted advertising was highlighted as a way for broadcasters to remain competitive with other media.

The next step is for the manufacturers to build smartphones with the activated chips, Smulyan said. He doesn't anticipate that being a problem now that AT&T has weighed in, and said phones with the chips could be available in late 2015.