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Sprint Long Distance


Sehaty Foreign Exchange


July 3 2000

Online radio, at a cost

Dear Mr. Paley,

Some months ago, through a link provided by the on-line news magazine THE IRANIAN TIMES I read the story about your station in a LOS ANGELES TIMES article by Dana Calvo, and I must say that on behalf of my Iranian friends and relatives in Southern California I was pleased to hear of your endeavor, and not the least bit surprised by your success and popularity as evidenced in the article. Your web page gives further proof of your growth in the intervening months since the article was published.

It is noted from the KIRN-AM web page that your company requires an annual payment of US$60 for access to the streaming broadcast of your radio station content, KIRN-AM, over the web. This is interesting inasmuch as your station is a commercial one airing paid advertisements over the public airwaves, and because your transmissions are otherwise available at no cost to those fortunate enough to be within your broadcast radius. In effect, you have created two classes of listeners: one which must pay, and another which does not.

As you are aware, anyone with access to the web and a reasonably current computer and modem can - at no cost but for access charges to their ISP - visit hundreds of commercial stations such as yours; listening not only to the content, but to the paid advertisements as well. It is clear that your intent - the KIRN-AM business model - is to generate revenues from both ends; indeed nearly unique position for a public airwaves broadcaster.

Let me raise the following points. I would be interested in hearing your comments.

First, in many cases - as with your competitors who use a more restricted-access broadcast technology (e.g. Radio Sedaye Iran, et.al.) - those outside your standard broadcasting area at 670mhz, and who would be among your most avid listeners, are in many cases those least likely to be able to easily afford such a payment. Even for those who can, one hesitates to think of their perception of your station - and your advertisers - as they ponder on the requirement that they first pay to hear advertisements, on top of which they are likely paying access charges to their ISP.

Of course, should they choose to patronize your advertisers, your paying listeners should also realize that built into the merchants' overhead is the cost of the advertising which they, the customer/listener, has paid you to hear. In effect, they are paying three times for having listened to the advertisements; first to KIRN, then to the ISP, and then to the advertiser. The public airwaves listener pays only once - to the advertiser.

Second, it is irritating to note that one must go well into the KIRN-AM "registration" process before it becomes evident that a "membership" must be purchased in order to gain access to the broadcast content via the web. One might characterize this as a variation of "bait and switch" and is unworthy of you, your staff, and your advertisers. The requirement for payment for access must be made unambiguous at the outset.

Third, your policy of requiring payment also raises potentially interesting legal issues which you, your attorneys, and the Federal Communications Comission (FCC) are more competent to discuss in detail than a non-lawyer such as myself. Nevertheless, it may be possible for an imaginative lawyer at a regulatory agency or public interest group to establish linkages - for purposes of regulation and/or enforcement - between simultaneous, or near simultaneous broadcasting of "general interest" material over the public airwaves and the internet.

While most of your fellow public airwaves colleagues are doing this without charge, your requirement for payment may generate some unwelcome scrutiny and either litigation under current laws and regulations, or possible future legislation and administrative rulings. There can be varying (and evolving) interpretations of the concept of the broadcast license as a public trust. We'll see.

Bill Phillipson
Woodway, TX


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