The technology

A company called iBiquity Digital has created the technology to make this happen. They license this technology to radio stations and consumer electronics manufacturers.

Unlike the conversion to digital television, consumers have a choice of whether to participate in the upgrade. In contrast to the television industry, where the analog signal was turned off by Federal decree, radio stations will continue to broadcast the analog signal along with the new digital signal. If we choose to not upgrade our radios, we can still listen to analog AM and FM radio — although we'll be missing out on the digital-only features and multicasting channels.

How does it work?

HD Radio technology works pretty much just like traditional analog radio transmission:

1. The radio station sends out the analog and digital radio signals, along with a third signal for text data.
2. The digital signal is compressed before being transmitted.
3. The three-layered signal is transmitted from the radio station's upgraded digital transmitter.
4. Multipath interference, caused by the signal reflecting off of buildings, is ignored by the digital radio, which is able to discern the true signal and ignore interference.
5. Your radio receives the signal and, depending on your equipment, you hear either the digital or analog feed.