Originally Posted By: Papa Bear
AM radio inherently is susceptible to interference. AM radio is "amplitude modulation" so anything that varies the STRENGTH of the incoming signal is heard as an audio signal. (eg: bad plug wire causing a tick-tick-tick sound).
FM is "frequency modulation" and is almost immune to outside interference. That's why it was embraced as the method of choice by most stations.
To simplify this a bit. Amplitude Modulation is like varying the "volume" of the signal. The problem with this approach is any noise is added to the signal and when received, the receiver has no way to distinguish between what was the original signal, and what is added noise, so the receiver simply plays it all back to you.
With FM, frequency modulation, even if the noise gets added to the signal, it matters less because the receiver is using the frequency of the signal, not the amplitude to extract the intelligence out of the signal. Think of FM as if someone varied their pitch from a low tone to a high tone. Pitch, or in this case frequency changes of the signal are not impacted by most electrical noise, so the receiver can more accurately reproduce the original broadcast in spite of the noise.
They both have their place in broadcasting as both have advantages and disadvantages.
You don't hear any FM stations over the air from the other side of the nation at night because they don't get the skip wave you can get with some AM stations at night. So with AM, you can get greater range, but at the cost of more potential noise.
I don't know if it's still used, but when I was in the Army, we still had radio teletypes using AM radios for the range.