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In-band on-channel (IBOC) is a hybrid method of transmitting digital radio and analog radio broadcast signals simultaneously on the same frequency. The name refers to the new digital signals being broadcast in the same AM or FM band (in-band), and associated with an existing radio channel (on-channel). By utilizing additional digital subcarriers or sidebands, digital information is multiplexed on existing signals, thus avoiding re-allocation of the broadcast bands.
IBOC relies on unused areas of the existing spectrum to send its signals. This is particularly useful in North America style FM, where channels are widely spaced at 200 kHz but use only about 50 kHz of that bandwidth for the audio signal. In most countries, FM channel spacing may be as close as 100 kHz, and on AM it is only 10 kHz. While these all offer some room for additional digital broadcasts, most attention on IBOC is in the FM band in North American systems; in Europe and many other countries, entirely new bands were allocated for all-digital systems.
Digital radio standards generally allow multiple program channels to be multiplexed into a single digital stream. In North American FM, this normally allows two or three high-fidelity signals combined in one channel, or one high-fidelity signal plus several additional channels at medium-fidelity levels that are much higher quality than AM. For even greater capacity, some existing subcarriers can be taken off the air to provide additional bandwidth in the modulation baseband. On FM for instance, this might mean removing stereo from the analog signal, relying on the digital signal to provide stereo where desired, thus making room for another digital channel. Due to the reduced bandwidth in AM, IBOC is incompatible with analog stereo, although that is rarely implemented, and additional channels are limited to highly compressed voice such as traffic and weather.
Eventually, stations can go from digital/analog-hybrid mode to all-digital, by eliminating the baseband monophonic audio.