The recording industry is lobbying Congress to impose a new performance tax on local radio stations that would require stations to pay a fee for the music they play on-the-air. This would upend the longstanding symbiotic relationship between recording artists, composers, record labels and local radio broadcasters that has enabled the American music industry to thrive and grow. The performers and recording industry benefit from the immense free promotion they get from radio airplay and on-air interviews, in many cases timed to coincide with concert appearances in the community. In fact, Americans name free, local radio as the number one way they discover new artists and new music. Now with their revenues sliding, the recording industry wants to impose a tax on local radio broadcasters, essentially biting the hand that feeds them. While three of the four major record labels are located outside the U.S., free, local radio stations are the lifeblood of towns and communities right here in our country — delivering vital local news, weather and emergency information, as well as introducing new music to its listeners. Imposing a new performance tax on local radio broadcasters would radically alter the balanced system that has fairly compensated performers and labels for over 80 years.

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Recognizing the value of broadcaster programming, federal law allows broadcasters to negotiate for the retransmission of their signals by cable and other multichannel video programming distributors (MVPDs).  When the Federal Communications Commission (FCC) last reviewed retransmission consent policies, it found that negotiations take place on a “level playing field,”  that retransmission consent benefits consumers, and that governing laws did not need to be revised.  Retransmission consent negotiations between local television broadcasters and cable and satellite companies have proven to be successful, market-based discussions. When enacting the 1992 Cable Act, Congress stressed that it did not intend to dictate the outcome of negotiations between broadcasters and MVPDs.

Retransmission consent negotiations are also fair. These marketplace negotiations are an important mechanism by which local television stations receive the acknowledged value that their programming brings to MVPDs. Before the retransmission consent system was created, cable could take broadcasters’ product – our signals and programming – and use it to attract subscribers and revenues without even obtaining their consent.

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The Federal Communications Commission (FCC) has proposed to substantially increase regulatory burdens on local broadcasters. Of particular concern, the FCC suggested that restrictive changes should be made to the rules regarding the location of stations’ main studios and the unattended operation of stations. These regulatory changes could cost broadcasters millions of dollars and would impose a significant financial hardship on many stations, especially smaller ones and those owned by members of minority groups.  These requirements would make stations less able to serve their local communities by diverting scarce resources away from programming and other services that directly benefit viewers and listeners.  

In addition, the FCC has also tentatively concluded that programming-based guidelines should be imposed for the processing of station renewal applications, as well as requiring local stations to establish a permanent community advisory board to ascertain the needs of their communities. These intrusive requirements needlessly burden local stations in today’s competitive media marketplace, as local stations acknowledge and embrace their obligation to serve the public.  In addition to national news and emergency information free of charge, local broadcasters have always worked to provide additional, unique community service by giving a voice to local organizations and entities and raising monies for charities, local groups and causes, and needy individuals.  Local stations work every day to understand the needs and interests of their audiences. Indeed, broadcasters must do so to retain audiences (and thus advertisers) and remain relevant and economically viable in the highly competitive 21st century marketplace. 

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