The Commission can now auction off the airwaves to any bidder who agrees to offer the service nationally.
T-Mobile is up in arms because the spectrum for this free web service is adjacent to theirs. And it's fair to say other competitors who have had to invest in the infrastructure to deliver mobile service are not happy.
I'm sure the NAB will have its grouch face on -- this threatens the fabric of local radio, and all that stuff. In reality nothing threatens the fabric of local radio as much as the people who own and run large radio groups.
The Wall Street Journal reports that any proposed auction rules appear to favor M2Z Networks, Inc., the startup that developed the concept a few years ago. M2Z believes it could pay for the costs of building the national free Internet platform through advertising and add-on services such as optional paid plans for faster speeds.
The Commission intends for the free Internet platform to reach 50% of the U.S. population in four years and almost 100% in ten.
Terrestrial radio sees this coming and I guarantee you they are looking the other way. Watch, they will repackage the "advantages" of what they call "local radio" instead of thinking differently. That is, getting into the content and marketing business separate and apart from over-the-air radio.
I can tell you from a generational point of view, the next generation will not be denied their Internet, social networks or mobile access. You see the effect Gen Y has had on traditional media already -- without free wireless Internet for everyone.
While teaching at USC, I was always surprised to hear the students talk about their mobile devices, laptops and iPods as if everyone had them. I used to tell them that when I left the University Park campus and drove down Jefferson home to Marina del Rey, it didn't take me 30 seconds to see a whole stretch of humanity that did not have the same access as they had. Critics would use the old SC -- spoiled children -- argument, but I never bought it. Many students -- even at private colleges -- have to work their way through school or augment the scholarships they might have earned.
This is tantamount to mental mind games -- that all young people are privileged. Most young people are not when you take into account the entire population. And the ones who are -- look in the mirror to see how they got that way. This entire argument, in my opinion, is counterproductive to understanding the future.
The real issue is that consumers do not have 100% penetration of free mobile Internet. But I believe that as the free service grows, free radio listenership will decline proportionately.
I've reported anecdotal evidence that young folks don't like radio. Interestingly, many of my readers have augmented my observations with their own. Gen Y still must listen to radio if they are in a car and don't want to listen to their iPods. In other words, even a generation that would rather not, has to listen to radio from time to time.
Free wireless Internet changes all that.
One of my readers emailed me the other day that "it ain’t just the 'next generation' that’s disenfranchised. It’s our generation—the biggest users of radio in the history of the world!" The baby boomers.
And this is another thing I'd ask you to consider. Older radio listeners are succumbing to new media -- even at this primitive stage. Check the iPhones, Blackberries and iPods in the hands of older consumers. The more they are on their mobile devices, the less time they have for traditional media. Some use these devices to access terrestrial radio when possible, but they didn't buy the device to be a radio. That's become secondary.
The free wireless Internet -- what does it mean?
Someday -- when the record labels get their heads out of their grooves and fair royalty compensation is applied -- anyone can become a Clear Channel. Ooh, sorry about that. I meant that anyone can start a business and be free to own thousands of streams using music as well as vocal content.
Better yet, one person -- that special someone who has a talent or body of knowledge like no other person -- can set up shop without having to convince some regional vice president that it's worth doing.
Success will be judged by the listener.
Revenue will mainly be derived from ancillary sources other than commercials.
In 30 years radio has developed very few formats. Look around, the same small list of genres market after market. That ends with this new idea.
Delivering podcasts to the entire population on the fly without a deal with Apple or Verizon -- priceless.
Connectivity to all people no matter of race, color or economic group that might have previously prevented them from sharing a stake in the Internet.
And remember, I love radio. You can see my criticism of the CEOs as being disloyal but I respectfully disagree. Radio people are the most talented and professional producers of content on this planet. They are simply producing it on yesterday's delivery system for previous generations who are in many ways not like their present audiences.
And, they are being let go in a death wish by radio groups who dance to the tunes of Wall Street. Can you say penny stocks?
Earlier this year a student said to me, "why don't you give up on radio, it's over". This is why you have to love these young people telling it like it is. I explained, no one knows it's over better than I do. I reject the Kool-Aid of some trade publications and associations, stand ready to publicly hold CEOs accountable for their stupidity but I'm never ready to give up on the people who sell the ads, manage the stations, program the formats and when they are allowed -- entertain local audiences.
Radio has taken its own hemlock but to those who can hold on or stand at the ready, a new world is here and plans such as free wireless Internet will help new media grow exponentially.
But it's when that new world is available to everyone everywhere for free that their expertise will be pressed into action again.
In 1996 I took a lot of legal, professional and personal hits over declaring that consolidation was as evil as the "empires" aggregating it. Inside Radio exposed excesses, mistreatment of employees and a gorwing disregard for radio's employees and audience.
Now I want to go on record as saying, these same terrestrial broadcasters are being told by their own FCC in effect that they have ten years to come up with a plan to do something other than repurpose their terrestrial radio formats on Internet streams.
Someday radio won't be the only thing free and available everywhere.
They've got ten years.
I'm starting the clock.
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