IBOC, or "In-Band, On-Channel", is a system to allow digital radio signals to be transmitted on the same frequencies as existing analog AM and FM radio stations. The system has been developed for use in the US by Ibiquity, a spin-off of communications company Lucent.

The key difference between IBOC and other digital radio schemes (such as Eureka-147, which is being used in Europe, or satellite radio) is that IBOC will not require the allocation of new frequencies to digital radio broadcasters. The other schemes require additional bandwidth; although the same new frequency can then be used to carry multiple digital channels rather than the single analog channel plus single digital channel of IBOC.

It is the belief of the creators of IBOC that it is the best way to promote a transfer to digital radio. The arguments in favour of IBOC are that it allows radio stations to hang onto their existing frequencies and use their listeners' brand awareness: the number of a frequency (e.g. 106 FM) is often the way listeners identify a station. This should increase usage of digital radio, at least if listeners have receivers.

While IBOC does not offer the large number of additional channels that other systems do, it may make it easier for existing stations to start up digital transmissions. It will not require regulators to allocate additional channels. But IBOC will do nothing for companies wishing to set up new radio stations.

In technological terms, Ibiquity's IBOC system uses their proprietory PACTM (Perceptual Audio Coder) digital audio compression format. This is somewhat more advanced than MPEG1 Layer III (MP3) audio, and is said to offer similar performance in terms of compression ratio and quality to MPEG2 AAC coding.

In common with other digital audio systems, IBOC will improve quality over analog due to error correction and channel equalization, avoiding hiss, fading, etc. Typically for digital FM, an audio sampling rate of 44.1 kHz will be used to match CD audio, and the performance should be of a similar near-CD quality to MP3. For AM radio, a quality equivalent to analog FM should be possible with digital IBOC transmissions.

In another selling point of new digital audio systems, IBOC will allow data to be transmitted along with audio. On a simple level, this may provide the station name, program name, singer and track. Or it may be used for more complex data services (traffic information, text news, advertising, etc.) if a suitable way of paying for them can be found.

At the time of writing, IBOC in the US is focused on testing and standardization. IBOC has been recommended for FM use in the USA by the US radio industry standards body NRSC (National Radio Systems Committee), and has also been recommended for daytime use on AM. The system is currently awaiting FCC (Federal Communications Commission) approval for use in the USA. The ITU (International Telecommunications Union), a leading international standards body, has also endorsed it for AM broadcasting.

However, the other side of the digital radio question is the availability of receivers, and it remains to be seen if these will be a commercial success.