Supporters of the bill claim its the just payment that radio owes the artists, because without music from the artists, radio stations would not make the “billions of dollars” in profit they have over the year. NAB, on behalf of radio stations, says that artists would not sell anywhere near the amount of product they do without the promotional power radio stations provide through airplay (anyone else old enough to remember “payola”?) Check out this LA Times article for a quick summary of both sides.

What side are you on and why? Leave a comment because this bill gains more and more traction each year.

With Special Temporary Authorizations (“STAs”) from the FCC, over 200 AM stations were already using FM translators to replicate as best as possible their daytime coverage area at night.  State broadcasters associations and the not-for-profit AM Daytimers Association that I co-founded voiced their support for the proposed rule changes before the FCC.  As a result, the STAs will be terminated and all AM stations that are utilizing FM translators by way of STAs will have to file appropriate paperwork with the FCC to change the license of the FM translator to specify the AM station as the primary rebroadcast station.  AM stations can continue to work out agreements with existing FM translators under the rules.  That’s the good news.  The bad news is, according to the FCC,  there won’t be a filing window for new FM translators until after a new LPFM filing window occurs.

While the relief for AM stations is welcome, it may not be permanent.  FM translators are “secondary services” meaning if a full-power FM station modifies in such a way as to create an interference problem with the translator, the full-power station, as a “primary service” takes priority and can ask the FCC to order the translator to modify or, in the worst case, cease operations.  The next logical step for AM stations is to convince the FCC that translators rebroadcasting AM stations should be given “primary status” to protect them from future encroachment from full-power FM stations.

Leave a comment if you agree, as that may be the next mission of the AM Daytimers Association.

The symbiotic relationship between musical artists and the radio stations that have helped them generate sales since before Elvis first swiveled his hips is in danger of changing, and I am not sure it’s for the better. If you have an opinion on this issue, now is the time to get your voice heard. Call your U.S Senator and Members of Congress now before the opportunity is lost.

Similar bills were introduced in 2007 and 2008 but did not advance very far, however the players have changed. The new administration, the new FCC chairman and a majority of the current commissioners support greater diversity of ownership, and more local radio outlets. In fact, the FCC made clear that the next filing window for low power FM stations of any kind will be for LPFM stations.

The question is what effect will the presence of third adjacent LPFMs have on full-power FMs. What do YOU think?

For continued continued reporting on the bill’s progress, click here to view the Open Congress website’s coverage.

Bigger picture, maybe this means lenders will be coming back, and so will advertisers. Here’s hoping!

As one might imagine, the NAB is opposed to the measure and the RIAA is in favor.  The most interesting thing for me is to note how the tables have turned over the course of  time.  Record labels and their artists have used radio stations to boost sales since radio was invented.  “Payola”, the illegal practice of compensating radio stations for playing certain songs, was rampant.  Record companies understood that more airplay over radio invariably led to the sale of more records.  And in terms of places to get your recordings promoted, radio was the only game in town.

Fast forward to the age of computers, satellite and internet, and RIAA is betting that the dynamic has changed.  RIAA believes it no longer needs radio to promote artists and their recordings, so it is looking to destroy the symbiotic relationship between artists and radio stations by charging radio stations to play music (over and above the ASCAP, BMI and SESAC fees stations already pay).

The folks at Techdirt summed this up nicely:

“[T]he most damning argument against the recording industry’s demand for money here is the fact that, for decades, the industry has (illegally) had the money go in the other direction. The system of payola has shown, quite clearly, how much the recording industry values airtime, in that it’s willing to pay radio stations to play its music.

So, can anyone explain why it’s illegal for record labels to pay radio stations to play music, but it’s okay for Congress to force radio stations to pay the record labels for playing their music? It defies common sense.”

For radio stations, this could not come at a worse time.  Advertising revenues are down, cash for upgrades for station improvements or to purchase or sell stations is very tight.  The NAB is not taking this lightly and has set up its own webiste in opposition to the performance tax.  The radio industry has had to beat back teh performance tax questions before, but it seems to have more momentum this time.  How many stations in smaller cities and towns would turn to “all talk” because of the econimic impact (or maybe just the principle) of this new tax?  I hope we don’t have to find out.

In addition, the FCC will not accept ANY FM minor modification applications during the short-form (FCC Form 175) application filing window for Auction 79 which is scheduled to run between June 16, 2009 and June 25, 2009.

A copy of the text of the FCC’s Public Notice can be found here.

Defining what language should be prohibited from broadcast  has been a challenge.  The late George Carlin started a firestorm in the 1970s when his “Seven Dirty Words” monologue was aired over a radio station owned by the Pacifica Foundation.   The FCC issued a determination that the language in Carlin’s monologue was indecent, and any future broadcasts of that kind of language would be subject to sanctions.  Pacifica took legal action, claiming the First Amendment protected Carlin’s monologue, but the Supreme Court disagreed and sided with the FCC.  Congress clarified that the prohibition against indecent speech applied only between the hours of 6 a.m. and 10 p.m.  TheFCC really only pursued action against broadcasters who used such language in a willful or repeated manner inside the forbidden window when children were most likely to be listening.

After receiving complaints about certain award show broadcasts where celebrities were caught on camera uttering a single expletive, the Commission changed its policy and decided that even isolated single word utterances (i.e., “fleeting expletives”) would be actionable  and subject to Commission sanctions.  Broadcasters headed to court once again to challenge the FCC’s position.  The case ended up in the Supreme Court as FCC v. Fox Television Stations.

The “big elephant in the room” as Justice Ginsberg referred to it during oral argument, was the question of whether the Commission’s sanctioning of “fleeting expletives” was prohibited by the freedom of speech provided in the First Amendment.  The Supreme Court’s decision left that issue unanswered for now.  Instead, the decision concluded that the FCC’s decision to change its policy to begin the sanctioning of “fleeting expletives” was not “arbitrary and capricious” because the FCC had provided sufficient justification for its change in policy. 

The case was then remaneded to the Second Circuit Court where the question of the constitutionality of the FCC’s new policy of sanctioning feelting expletives in consistent with the First Amendment.

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The window for filing short-form applications with the FCC to particpate in the auction is scheduled to open on June 16, 2009, and close at 6 p.m. eastern time on June 25, 2009.  Upfront payments must be made by wire transfer to the Commission no later than 6 p.m. eastern time on July 31, 2009.

You can contact us for more information or with any questions on the FCC auction procedure.