Digital Audio Growing

Television Digest with Consumer Electronics, August 23, 1999

Arrival of digital audio services as competitor to today's radio moved 2 steps closer last week as Lucent Digital Radio said tests will begin soon on its system and XM Satellite Radio announced contract to begin building terrestrial repeater system that's critical to making its satellite digital audio radio service (SDARS) viable.

XM said it awarded $115 million contract to LCC International to build nationwide terrestrial repeater network for SDARS, scheduled to begin in 2nd quarter 2001. Company plans to install 1,700 terrestrial repeaters to cover 70 metropolitan areas across U.S. Largest urban areas may need 100 or more repeaters, but smaller cities with fewer tall buildings may need only 1-3, XM said.

SDARS use of terrestrial repeaters in 2310-2360 MHz band had been opposed at FCC by NAB and others in past, but XM, which plans to operate in 2332.5-2345 MHz band, said it's confident it has full regulatory okay to implement its 100-channel service, awaiting only "final technical rules" on operations in band. NAB said its primary concern is that repeaters be used only for SDARS service, not new services. XM's repeater network probably would be partly funded by capital raised from company's planned initial public offering (IPO). XM filed registration with SEC July 23 for IPO to raise $138.7 million. It expects proceeds to be sufficient to cover operating needs through first quarter 2000. IPO could occur as soon as Oct.

XM said it needs to raise $1.08 billion to implement SDARS system and so far has amassed $330.8 million, including $250 million from sale of bonds to Clear Channel Communications, DirecTV, General Motors (GM). It said it will require "additional significant funds" after start of commercial operations, including cost of long-term distribution agreement with GM's OnStar Div.

Lucent will begin testing new version of its in-band, on- channel (IBOC) digital audio broadcasting system next month at WPST(FM) Princeton, N.J., CEO Suren Pai said. Lucent also is continuing to press National Radio Systems Committee (NRSC) to change its testing procedures for competing IBOC systems, he said in briefing, although other members of NRSC reportedly are reluctant to accept change.

New IBOC system uses multistreaming in which portions of data needed to reproduce audio are sent separately on different portions of IBOC signal. Since not all packets are needed to reproduce audio, multistreaming makes IBOC more robust against interference, increases its service area and allows for graceful degradation of signal, Pai said. Competitor USA Digital Radio (USADR) plans to fall back on analog FM signal if digital signal is unacceptable, but Pai said Lucent's multistreamed signal provides good quality farther from transmitter than analog FM.

Lucent "can't quantify" how much more robust multistream signal is than its original system, which was tested in N.J. in spring, Pai said, but he hopes to firm up numbers with next field tests. No specific time has been set for tests, he said, but they could continue as long as 18 months as new variations are tried.

Issue of testing methodology will come up in NRSC meeting at NAB Radio Show at end of month in Orlando, officials confirmed. Proponents, including Digital Radio Express, Lucent and USADR originally agreed to testing methodology, sources said, but Pai said Lucent now prefers that all competing systems be tested on same test platform under identical conditions. "We are becoming increasingly vocal about this, because this is important," he said. "This is going to emerge as a pretty important issue over the next few weeks." Test data were to be available to NRSC by Dec. 15, under original plan, and Pai said Lucent remains "comfortable" with that.

Lucent opposes significant changes in radio interference criteria in order to establish low-power FM (LPFM) service. Pai said Lucent system was designed based on current criteria, and even that is "a pretty strong challenge." He said multistreaming will be better able to deal with LPFM interference, but it's not clear how much more it can handle. Final answer, Pai said, will depend on how well receiver manufacturers implement system. Meanwhile, he said most important information gained from test of earlier Lucent IBOC system is that it didn't interfere with existing analog signals. He said same will be true of multistreaming since all that changes is way signals are coded.