Overview
Digital information is transmitted using OFDM with an audio compression algorithm called PAC (Perceptual audio coder). However, audio compressed with this method led to complaints about poor sound quality, so in 2003 iBiquity combined it with an enhancer called SBR (spectral band replication) that improves audio quality at very low bit rates and branded the codec to HDC (High-Definition Coding). (HDC is a proprietary codec based upon, but incompatible with, the MPEG-4 standard HE-AAC). HD Radio equipped stations pay a one-time licensing fee for converting their primary audio channel to iBiquity's HD Radio technology, and 3% of incremental net revenues for any additional digital subchannels. The cost of converting a radio station can run between $100,000 and $200,000. Receiver manufacturers pay a royalty.
If the primary digital signal is lost the HD Radio receiver will revert to the analog signal, thereby providing seamless operation between the newer and older transmission methods. The extra HD-2 and HD-3 streams are not simulcast on analog, causing the sound to drop-out or "skip" when digital reception degrades (similar to HDTV drop-outs). Alternatively the HD Radio signal can revert to a more-robust 20 kilobit per second stream, though the sound is reduced to AM-like quality. Datacasting is also possible, with metadata providing song titles or artist information.
iBiquity Digital claims that the system approaches CD quality sound and offers reduction of both interference and static; however, some listeners have complained of increased interference on the analog AM band (see AM, below).
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