NY Attorney General To Sue Arbitron Over PPM
October 3, 2008

The battle over Arbitron's PPM methodology continues, as New York Attorney General Andrew Cuomo has now threatened legal action to block the commercialization of the PPM in the state next week. Cuomo's office has sent a letter to Arbitron Chairman/President/CEO Stephen Morris and EVP/Chief Legal Officer Timothy Smith, giving five days' notice about the litigation.

In the letter, obtained by FMQB, the AG's office says that the PPM commercialization plan consists of "engaging in or planning to engage in repeated and persistent fraudulent and illegal business practices." The letter also states that "Due to Arbitron’s virtual monopoly over ratings in the radio industry, a significant and improper decline in ratings under a PPM system would cause minority stations to suffer drastic reductions in advertising revenues. This, in turn, would distort the marketplace and severely harm and possibly destroy minority broadcasting in New York." It goes on to list many of the complaints recently lobbed at Arbitron's methodology by minority broadcasters.

Arbitron has issued a response to the letter, saying the company "is disappointed that the State of New York Office of the Attorney General has stated its intent to pursue litigation in an effort to stop the implementation of Portable People Meter —a measurement tool that is supported by a majority of the radio industry. We intend to vigorously defend the Company and its interests. We also fear that the radio industry will suffer continued harm and be placed at a competitive disadvantage if PPM is delayed further."

"After many years of market trials, and almost two years of commercialization, the PPM is providing more timely and detailed insights into the behavior of radio audiences. These insights have already been used with demonstrated success by radio programmers, including those at urban and Spanish-language stations."

Last month, Cuomo announce an investigation into PPM methodology. Arbitron plans to officially commercialize the PPM next Wednesday, October 8.

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