Most cellphones sold in the U.S. have FM chips hidden inside, but nearly half of them aren't activated. FCC Chairman Pai would like to see that number increase.

It seems odd that every day we hear about a new smartphone app that lets you do something innovative, yet these modern-day mobile miracles don't enable a key function offered by a 1982 Sony Walkman.

Why he cares: Chairman Pai laid out the benefits in a speech to broadcasters today:

  • For broadcasters, radio chips will let FM stations reach more listeners who are constantly consuming media on their cellphones.
  • For consumers, listening to over-the-air content via a chip will use "one-sixth of the battery life and less data" compared to streaming radio content.
  • During emergencies, cellphones would be able to receive broadcast emergency alerts, especially when the wireless network is down or overloaded.

What's in it for cellphone makers? Not much — and that's the problem. If consumers are listening to over-the-air radio stations, they're not streaming music on carriers' networks. But as more carriers embrace unlimited data plans (Verizon announced its own plan this week), they might be warming up to the FM chips. Still, it's a matter of consumer demand—and most consumers aren't hinging their smartphone purchase on radio capabilities.

What's next: Don't expect the FCC to force cellphone makers to turn on the chips. Pai said, "as a believer in free markets and the rule of law, I cannot support a government mandate requiring activation of these chips….it's best to sort this issue out in the marketplace."

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