While satellite radio customers have enjoyed digital reception and its clean, crisp sound, most of us that are tuned in to local stations have had to muddle through listening to analog broadcasts based on technology that has changed little in the last 80 years. But more and more broadcasters across the country are now pushing a digital format called HD Radio, which rivals satellite radio quality and promises to eliminate the static.

Initially launched 3 years ago, HD Radio is the brand name for the technology developed by iBiquity Digital Corp. The system digitizes and compresses a station’s signal and then broadcasts the digital stream in the same frequency range currently used by analog AM and FM stations. The new digital stream is sent alongside the analog signal, so you can listen to either analog or digital versions, and, more important, you can listen to HD stations for free. HD broadcasts also include artist and title information that can be displayed on a radio, and the sound quality is a marked improvement. An HD AM station, for example, can broadcast higher quality audio (up to 15 KHz versus analog AM’s current top end of 10 KHz), making it sound as good as a traditional FM station. Better yet, HD FM stations can deliver near CD quality audio with a frequency response of up to 20 KHz.

To get this higher fidelity, you don’t need a new car antenna to pick up HD stations. However, you will a new radio tuner that can detect and decode the digital transmissions, a fact that has slowed adoption of the technology.

“There was the proverbial chicken and egg problem,” says Peter Ferrara, CEO of the HD Digital Radio Alliance, a consortium of broadcasters including ABC Radio and Clear Channel. “Consumer electronics people didn’t want to make radios until there was content available and broadcasters didn’t want to invest in putting out the content until radios were available.”

But broadcasters decided to take the plunge at the end of 2005, according to Ferrara, by forming the Alliance to promote digital radio and by committing to introduce HD Radio stations in the nation’s top 100 markets. That rollout is nearly complete with 1,204 stations broadcasting in HD Radio as of last month, reaching a potential audience of 235 million listeners. The Alliance expects there to be about 2,000 stations broadcasting in the digital format by the end of the year.

Satellite radio initially gained traction by adopting a marketing approach similar to that used by cell phone companies. XM and Sirius entice listeners with relatively inexpensive tuners, often less than $100, but then charge buyers a monthly fee of $10 or more. HD Radio began by taking the opposite approach: tuning in was free, but early HD compatible radios were nearly $1,000. Now, prices have dropped sharply, with tuners costing half as much—or less. JVC’s in-dash HD-W10 Mobile HD Radio Receiver, for example, costs just $188 and includes a CD player. The price point is so attractive that even Wal-Mart believes HD Radio is ready to hit the mainstream and began selling the JVC model in nearly 2,000 of its stores this month.

Car makers have been much slower to adopt HD Radio. Among the major auto companies, only BMW, which previously had offered HD as an option in higher-end vehicles, will offer an HD Radio option across its entire model lineup this spring. Fortunately, for those not looking for a new BMW investment opportunity and who don’t want to replace their car stereo receivers there are add-on HD Radio tuners now available.

The Directed Car Connect HD Radio, for example, is $199 and connects to the RCA jacks on the back of existing in-dash head units. The Directed model includes a display that can be mounted in or on the dash, but the company recommends having a professional install the tuner. Major auto OEM company Visteon will also offer a similar product called the HD Jump for $249 next month. The HD Jump will include a cradle so that it can be used not only in your car but also at home as a tabletop HD Radio.

So is it worth the time and trouble to upgrade your car’s sound system? If you appreciate better sound, it is. On one fateful cruise down the West Side, the difference between analog and HD broadcasts was obvious. Traditional analog stations sounded muffled, with a reduced dynamic range and a distinct lack of treble. But WNEW-FM’s HD broadcast sounded clear and clean, with ringing guitars and without fading or that picket fence interference known as multipathing.

Indeed, in some cases the local HD broadcasts sounded better than those of some satellite radio channels. While both use similar technology (iBbiquity actually licenses some of its compression technology to Sirius), satellite operators often compress some stations more than others in order to squeeze more channels into the satellite band. It can result in a significant degradation of audio quality and a tinny sound often heard on some talk and news satellite channels.

Many listeners, like myself, will also appreciate the local programming with all its warts, blemishes, and, yes, commercials. By comparison, even with its wide variety of programming, satellite channels can often sound canned and homogenized.

True, HD Radio cannot offer the breath of programming appealing to different tastes the way that XM and Sirius can. However, HD Radio has thrown a new ingredient into the mix: multicasting. Also called HD2, multicasting enables individual HD stations to divide the digital stream into as many as 8 separate channels within their existing frequency. For example, about 500 stations so far offer a second HD programming channel, enabling them to appeal to smaller audiences in niche markets. WKTU-FM in New York, for example, uses its second channel to broadcast country music. In Dallas, Clear Channel’s KHKS-FM station offers Pride Radio for the gay community on its second HD channel.

It’s competition like this that undoubtedly contributed to the decision by satellite operators XM and Sirius to recently announce a merger. But nationwide coverage and acceptance of HD Radio is probably still years away. One impediment is that the average cost for a station to upgrade its equipment to HD is about $100,000, according to iBiquity and the HD Alliance. So how soon smaller rural stations will be able to get on the digital bandwagon is unclear. And although several carmakers have hinted that they soon plan to offer HD Radios as an option, none besides BMW have made any announcements as yet.

“It’s the last medium that hasn’t converted from analog to digital,” says Rob Lopez, national marketing manager for Panasonic, which has offered an in-dash HD Radio unit for several years. “So I’d like to think we’d see HD Radio as a standard feature in cars in the next 5 years.”

BMW’s William Scully, a product communications specialist, also points out that listeners don’t necessarily have to choose between satellite and HD Radio. “It’s not an either/or kind of thing,” he underscores. “Our Logic 7 combo models come with satellite and HD radios.”

So ultimately, one way or another car radios will be dragged into the digital era. And that will bring better sound into autos, so that the only static I’ll get in the city will be from other drivers and not the radio. J-Q.com