While many (if not all) US airlines state this, it is in fact not true: there are no FAA regulations prohibiting the use of PEDs during takeoff or landing (although there is an AC to this effect). Rather, the regulations state, in typical FAA fashion, that no electronic devices that cause interference are allowed on airplanes. (14 CFR 91.21a) What types of devices? No one knows, but we do know which are allowed: portable videorecords, hearing aids, heart pacemakers, electric shavers, and, here's the kicker: [a]ny other portable electronic device that the [airline] has determined will not cause interference with the navigation or communication system of the aircraft on which it is to be used.

The question, then, is what causes interference, and how will that interference harm the plane?

A 7/2000 House of Representatives report on the subject suggested that there were less than 60 incidents of equipment malfunction in the ASRA database (out of over 50,000) that could possibly be linked to PEDs. Possibly. Maybe. We're not really sure.

Fact is, there have been no conclusive studies that prove any electronic device causes any problems. There is some anecdotal evidence, though. Incidents invovlving instrument malfunction have reportedly been solved by asking specific passengers in specific portions of the plane to turn off their electronic devices or to move. Note that most, if not all, of these incidents were reported in older aircraft, those with minimal shielding, analog controls, and higher succeptibility to all kinds of interference. I have found no incidents involving newer Airbus and Boeing airplanes. Here is a sample incident:
In May of 1995, the electric compass indicators of the first officer of a Boeing 737 gave erratic readings. After a sweep of the cabin was made for portable electronic devices, which resulted in flight attendants asking a passenger to turn off a compact disc player, the first officer’s instruments returned to normal working order.
I have always been very cynical when airlines ask me to turn off my devices. I believe that cynicism is justified -- there have been no real efforts to perform significant studies in this field. Airlines do not take this sort of thing seriously enough to keep handheld scanners on board, they do not check devices in order to prohibit those that may actually cause problems (Bluetooth and 802.11, especially). Instead, many European airlines have taken to banning Discmans. Well, good for them.

Here is one last "incident" to think about:
Boeing has attempted to duplicate instances of PED interference, reportedly even going so far as to purchase a passenger’s laptop that had allegedly caused interference on a London to Paris flight. The pilot on that flight claimed that turning the laptop on and off triggered autopilot error. Boeing flew the same laptop on the same route in the same seat but was unable to duplicate the interference.
References & Further Reading http://www.house.gov/transportation/aviation/hearing/07-20-00/07-20-00memo.html#PURPOSE

Terrorism Alert
In the last few years some experts have suggested that one of the easiest ways to bring down an aircraft would be to modify a CD or tape player to broadcast extremely powerful EM interference. As a result of this, some airlines are considering banning all electronic devices from use during any portion of a flight. Well, except for the ones that they've installed and that they will charge you for.
Addendum: Salon.com's Ask the Pilot column recently posted another interesting response to this question:
There appears to be little evidence that laptop computers pose a similar threat, but the airlines are erring on the safe side. And a laptop, like any other carry-on, must be stowed during takeoff and landing to prevent it from becoming a 200-mile-per-hour projectile.

Remember that some devices, like Walkman or Discman players, are prohibited during takeoff and landing not necessarily because of interference, but so passengers are able to hear P.A. announcements and instructions in the event of trouble. In this spirit, maybe airlines should demand the removal of earplugs and wake up all the sleeping passengers, but it seems they've drawn the line at listening to music.
See: http://www.salon.com/tech/col/smith/2002/10/25/askthepilot16/

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