The following content summarize a few of the top issues that matter most to broadcasters in the 113th Congress. We look forward to working with you on the issues that impact the 242 million radio listeners and the 302 million television viewers in the U.S. Click here to download a print-version of the NAB 113th Legislative Priorities PDF.
Protecting Television Viewers as the FCC Auctions Broadcast Airwaves
In 2012, Congress passed legislation granting the Federal Communications Commission (FCC) authority to hold a voluntary “incentive” auction of broadcast spectrum (or airwaves) in which TV broadcasters may give up their channels for a share of auction proceeds. This legislation incorporated several broadcaster-supported provisions needed to safeguard local television service for viewers.
Many stations that do not participate in the auction will likely be forced to move to new channels to free up the spectrum available for auction to commercial wireless providers. This is called “repacking” and could result in viewers losing some of their current channels and other services, including local TV news, multicast channels and free, local TV on mobile devices. To reduce this serious risk of viewer disruption, broadcasters want to ensure that the FCC makes public and allows sufficient time for testing of its repacking plan before it is finalized.
We believe a fully transparent process is critical to auction success and that the FCC should:
- Minimize viewer disruption and maximize the amount returned to the U.S. Treasury by limiting the number of stations affected by repacking;
- Ensure that broadcasters choosing not to participate in the auction retain their existing service areas so no viewer loses access to any of the stations that they currently receive;
- Allow continued growth and innovation in the TV industry for the benefit of viewers by retaining a spectrum band dedicated to broadcast television; and
- Put forth a thoughtful repacking plan that minimizes consumer harm and provides stations adequate time to understand and prepare for relocation.
Broadcasters ask that members of Congress exercise appropriate oversight of the FCC’s process to ensure that viewers are not harmed and that the spectrum incentive auction process fulfills each of these objectives.
Preventing Harmful Taxes on Local Radio Stations
For more than 80 years, radio stations and the recording industry have enjoyed a mutually beneficial
relationship: free airplay for free promotion. It’s a relationship that benefits listeners and has sustained
businesses on both sides.
But in recent years, the record labels have found themselves struggling to adapt to the digital age. In this
economic environment, the recording industry has pushed for legislation that would impose a congressionally mandated performance tax on radio stations simply for airing and promoting performers’ music. This legislation, known as the Performance Rights Act, could financially cripple local radio stations, reduce the variety of music radio stations play and hurt new artists trying to start their careers. It could especially affect smaller stations, including those minority-owned, causing them to switch to a talk-only format or shut down entirely.
This legislation could also put in jeopardy the jobs of nearly 1 million Americans who depend on local radio for employment. Some analysts estimate that a new tax on local radio could cost stations $2-7 billion annually.
Thus far, the record labels’ efforts have fallen flat, with hundreds of members of Congress supporting a resolution opposing a performance tax – the Local Radio Freedom Act. However, it is anticipated that the big record labels again will push for performance tax legislation in the 113th Congress.
In 2012, certain record labels and radio companies found ways to work together to craft arrangements that
promote performers and their music to listeners. This is more proof that a government-mandated performance tax is unnecessary.
Broadcasters oppose any legislative attempt to impose a new tax on local radio stations and will encourage members of Congress to stand up for free, local radio.
Ensuring TV Viewers Have the Best Programming Options
Congress provided local TV stations with the right to negotiate with cable, satellite and telecommunications
companies for the fair market value of their broadcast signals through a process known as retransmission consent. Prior to this law, cable operators used broadcast signals without stations’ consent and resold the signals, making millions.
As has been the case for decades, broadcast channels today remain the backbone of every subscription sold by pay-TV providers. In fact, more than 90 percent of the highest rated primetime shows are on broadcast channels – not cable.
Every month, local television stations across the country reach private contractual agreements with cable and satellite companies. The overwhelming majority of these negotiations occur in private and without any publicity. As a result, viewers continue to have access to their favorite broadcast shows, sports, local news and community information whether they choose to pay for a subscription service or watch local TV free, over-the-air with an antenna.
In 2012, there was an effort by some pay-TV companies to upend this law, taking away the right of local stations to negotiate in a free market for the fair value of their signals. While arguing for “deregulation” of the process in Congress, cable and satellite providers also argued for greater government involvement at the Federal Communications Commission in these negotiations, attempting to change the rules for their benefit – and to the detriment of viewers.
The current system benefits TV viewers and provides strong incentives for local TV stations and pay-TV providers to reach mutually beneficial arrangements.
Broadcasters ask members of Congress to ensure that these private, marketplace retransmission consent negotiations continue to be kept free from government intervention or wholesale change.
Establishing Streaming Rates that Foster the Growth of Music
America’s broadcasters are innovating to provide more diverse services and content to listeners and viewers. While the Internet presents enormous opportunity for broadcasters to expand their reach and locally-based services, many radio stations still do not stream their music online.
Unreasonably high royalty rates are a primary cause of broadcasters’ low adoption of Internet streaming. For many music-based radio stations, the advertising revenue simply does not cover the streaming costs.
Setting the rates in 2007 – then building upon them in 2009 – the Copyright Royalty Board (CRB) has been
criticized by many in the music industry for establishing extremely high rates that cannot be maintained. Many broadcasters believe that a more instructive standard for setting rates, improved ability to submit evidence to the CRB and greater congressional oversight could improve the CRB process and result in a more fair royalty rate.
In 2012, legislation was introduced to restructure royalty rates for Internet radio and broadcasters who stream by using the same standard currently used for satellite radio. It is expected that similar legislation will be introduced in the 113th Congress.
While broadcasters are considering this legislation’s impact on their services, we want to stress that any
deliberation of the webcasting royalty issue should not be tied to performance tax legislation. Many private
agreements reached in 2012 between individual broadcast companies and record labels compensate performers for both Internet and over-the-air play, and demonstrate that the performance tax issue is more appropriately addressed through private sector resolution rather than a government mandate.
Broadcasters urge members of Congress and all interested parties to work together to establish broadcast radio streaming rates that promote new distribution platforms that foster the future growth of music to the benefit of artists, listeners and local communities.
Ensuring a Vibrant, Competitive and Diverse Media Marketplace
America’s broadcasters are excited about the future; they are innovating and developing new technologies and integrating new platforms to deliver the emergency information, local news, sports and entertainment that viewers and listeners value each day. However, legal and regulatory challenges broadcasters face in Washington, D.C., could threaten stations’ ability to support their communities and innovate to meet the demands of today’s rapidly changing media landscape. These challenges could financially hamstring stations, hindering their ability to serve their viewers and listeners and secure a successful future.
Tax Incentives to Increase Diversity in Broadcasting
Broadcasters are committed to increasing diversity in the broadcast industry, especially among radio and television station owners. NAB has long been involved in both private sector initiatives and public policy advocacy to promote ownership diversity. One particularly effective policy provided tax deferrals on capital gains earned through the sale of broadcast properties to a minority buyer. Although this tax incentive program was eliminated in 1995, the policy is still widely regarded as the single most successful tool for promoting ownership diversity. Broadcasters support congressional action on an updated tax incentive program that would increase opportunities for underrepresented groups in broadcast ownership.
Opposing Advertising Restrictions that Hurt Local Stations
Advertising revenue is critical to local TV and radio stations’ ability to deliver vital news, emergency information and high-quality entertainment to their communities. As Congress considers initiatives that impact advertising, it should avoid legislation that could reduce the advertising on which local stations rely. One proposal that Congress is expected to consider is a modification to the tax deductibility of business advertising expenses. Limiting the tax deductibility of advertising would be the same as imposing a tax on advertising, making it more expensive and reducing the amount of advertising that businesses can purchase. Broadcasters will oppose any proposals that threaten and restrict the advertising dollars that support local jobs and enable stations to serve their local communities.
Ensuring Public Safety and the Emergency Alert System (EAS)
Broadcasters take seriously their role as first informers and are honored to serve as a reliable lifeline for the public during times of crisis. In 2012, NAB worked with members of Congress to modernize the Integrated Public Alert and Warning System. The system is designed to provide rapid, reliable and effective communication to the public in case of major emergencies, such as natural disasters and terrorist attacks. NAB is working with the FCC and other federal agencies to ensure that next-generation EAS is implemented in a manner that best serves listeners and viewers and supports broadcasters’ critical role in emergency warnings. Broadcasters are proud partners with the federal government and will continue to work to deliver vital public safety messages during emergencies.
Broadcasters look forward to working closely with members of the 113th Congress to ensure our listeners and viewers – your constituents – continue to have access to the important local news, emergency information, sports and entertainment programming on which they rely.
For more information on the issues that impact radio and television broadcasters, and consequently the listening and viewing public, please do not hesitate to contact the National Association of Broadcasters’ advocacy team.
National Association of Broadcasters