Introducing Digital Radio For A Fee

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WASHINGTON, D.C.: In a move that has put radio stations nationwide on a competitive alert, the Federal Communications Commission has decided to open up the airwaves to fee-charging national stations using digital sound. The news outraged radio broadcasters, who fear that pay-to-listen digital radio spells doom for small-town radio. "The bottom line is that satellite-delivered radio threatens the thousands of community radio stations, which provide local news, weather and sports, and have made the U.S. system of broadcasting the envy of the world," says National Association of Broadcasters spokesman Dennis Wharton. Maybe, but the more immediate question is whether digital radio will even get off the ground. Companies offering the satellite link will have to shell out millions in start-up costs, and then wait an estimated three years for stations to get their equipment in working order to pick up the signal. Another problem: no one seems to know what market, if any, exists for the digital service. For the moment, the bet is on people who travel frequently by car. Even when fully launched, though, digital radio would probably not attract enough customers to wipe out local stations, the FCC says. One possible reason: the end of free radio. Like cable TV, digital radio comes at a price, currently projected at between $5 and $10 per month. Using a special radio equipped with a disc-shaped antenna, customers could select a package of channels dedicated to specific topics like weather, sports or opera, or receive up-to-the-minute stock quotes for their car radio. Despite the risk involved, four companies are ready to take the plunge. CD Radio of Washington, D.C., American Mobile Satellite Corp. of Reston, VA, Digital Satellite Broadcasting of Seattle and Primosphere of New York have all received FCC go-ahead to bid on licenses to provide the digital service.