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Arbitron Sues NY Attorney General Over Investigation Into New Radio Rankings

MANHATTAN (CN) - Arbitron sued New York Attorney General Andrew Cuomo in Federal Court, trying to restrain him from filing litigation that will accuse it of making false and misleading statements in its radio audience estimates.

The lawsuit involves a new, electronic system of ranking radio station listeners, called PPM (Portable People Meter). Arbitron says it spent $150 million developing PPM, a system by which participating listeners have their listening habits electronically monitored. They plug the device into a docking station at the end of each day and it sends reports to Arbitron.

Arbitron says the new system caused some stations' rankings to fall, as listeners used to "round up" estimates of their listening time, and the electronic devices are more accurate. Arbitron says minority-owned broadcasters complained to Cuomo that the new system was hurting their rankings. Cuomo responded on Sept. 9 by telling Arbitron that "his office was commencing an investigation against Arbitron concerning commercialization of the PPM."

This "commercialization" refers to Arbitron's sale of the system to broadcasters, including broadcasters in foreign markets.

"(T)he AG investigation arises out of complaints made to the AG by minority-owned broadcasters or other individuals acting on their behalf," the complaint states. "The AG investigation began less than one month before the Oct. 8, 2008 announced date for publication of the September 2008 audience estimates, as well as the date on which the PPM audience estimates were to become currency, despite the fact that it has been well known since November 2007 that Arbitron would publish and commercialize these PPM audience estimates in early October 2008. The AG's representatives have informed Arbitron that unless Arbitron voluntarily agrees to delay commercial publication of its PPM audience estimates until the MRC accredits the PPM methodology for the New York market, the AG will commence a lawsuit." The MRC is the Media Rating Council; it accredits audience rating methodologies.

Arbitron says the minority-owned stations formed a group called the PPM Coalition that is using political influence to try to stop Arbitron from using its new technology. It filed an emergency petition with the FCC on Sept. 2 asking it to investigate the PPM system. Arbitron responded on Sept. 24, claiming the FCC lacks jurisdiction for this, because Arbitron is not a licensed broadcaster.

The New York City Council weighed in for the minority-owned stations on Sept. 25, and passed a resolution asking the FCC to investigate.

Arbitron claims its PPM ratings are noncommercial speech and not subject to prior restraint. It wants an order restraining Cuomo from restraining Arbitron, plus costs.

Arbitron is represented by Alfred Fabricant with Dickstein Shapiro.

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