Broadcast Law Blog : Broadcast Lawyer & Attorney : Davis Wright Tremaine Law Firm : Broadcast Law Blog : Seattle, Los Angeles, Washington D.C., New York, San Francisco, Shanghai

Many broadcasters have had the conception that there are FCC rules against liquor advertising,  As we wrote in 2007, the FCC has never directly regulated liquor ads.  Many years ago, the FCC did ask broadcasters seeking a license if they would rely on the NAB Code of voluntary conduct, which set out limits on broadcaster advertising for alcoholic beverages (essentially forbidding hard liquor ads).  When the Code was declared unconstitutional in the 1980s, there was no longer any FCC review, direct or indirect, of any alcoholic beverage advertising.  But that is not to say that there were no restrictions, as many programming providers and rights holders themselves limited the kinds of ads that could accompany their programs and, as we wrote in our previous post, the alcoholic beverage trade associations had voluntary codes of conduct, which the FTC looks to in determining whether advertising is an unfair trade practice.  The rightsholder restrictions were demonstrated this past week, when the University of Wisconsin reportedly banned beer advertising on broadcast coverage of its school's football games.  Private contracts from program suppliers and rights holders, including sports programming from schools and colleges, often include restrictions against certain types of advertising which, if breached, can carry contractual penalties including the potential for the cancellation of a station's authority to continue to carry the programming.  Especially where such rights were the subject of competitive bargaining, broadcasters want to insure that they do not violate these restrictions and put their valuable programming rights at risk.

Some of the broadest restrictions on advertising accompany sports programs.  On Friday, there was a story in Inside Radio (subscription required) about the NCAA's requirements for broadcast advertising.  With college football season up us, we thought that we'd look at some of those advertising restrictions.  Those restrictions can be found on the NCAA website, here.  The NCAA has a list of specific products that are permitted to be advertised, with guidelines on how those presentations should be made when the product is pitched.  In addition, the list includes certain products that should not be advertised on NCAA games.  For instance, while beer advertising is permitted, the NCAA says that such ads should not take up more than 60 seconds of commercial time per hour (one 60 second ad or two 30 second ads).  The ads should feature no "gratuitous and overly suggestive sexual innuendo, no displays of disorderly, reckless or destructive behavior."  The ads also should include a "drink responsibly" message.  Hard liquor, on the other hand, cannot be advertised in NCAA programs.  Similarly, there are prohibitions on gambling ads of any kind (including ads for casinos or race tracks); firearms; adult entertainment locations including pool halls; adult movies and video games (with NC-17 ratings); ads promoting any products containing NCAA banned substances (including ginseng); and ads for controversial and political issues.  

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An FCC decision released today reminds broadcasters of the need to notify the FCC of the completion of construction of a new broadcast auxiliary station.  Studio Transmitter Links (STL) and Remote Pickups (RPU) have for several years been licensed through the FCC's Wireless Bureau, rather than through the Media Bureau.  Unlike a grant of authority to construct a broadcast station, where the new authorization is granted in the form of a construction permit, when the Wireless Bureau grants a new authorization, it is in the form of a license.  Most broadcasters think of a license as something given to a station that is already constructed and complete. The Wireless Bureau's grant of the license, however, is conditional on the operator providing the FCC with notification upon the completion of construction within a specified period.  If no such notification is provided within the specified period (18 months for most broadcast auxiliaries, but only 12 months for some), and no extension is requested, the Wireless Bureau will automatically issue a public notice canceling the license (see the FCC Wireless Bureau website for details on how to file the notification of construction or extension request).  If the licensee does not request reconsideration of the cancellation of the license within 30 days providing evidence of timely construction, the cancellation will become final.  To operate with the facilities that had been authorized, the licensee would then have to file for a new license - starting the authorization process over from the beginning.  If the auxiliary had in fact been constructed, to continue to use it while the new application is pending, Special Temporary Authority (an "STA") would be required.

In 2006, when announcing the system that automatically generates the termination notice, the Wireless Bureau issued a Public Notice explaining the procedures that it would use.  The Commission states that its system will automatically generate a letter to the licensee providing notification of the cancellation and the 30 day reconsideration period.  Importantly, the Commission reminds licensees to keep their addresses in the FCC's systems current, as the mere fact that the letter did not get to the licensee at the correct address will not be an excuse for an expired license.  But having a correct address gives the licensee a better chance of getting the notice of cancellation if they inadvertently forget to file their notification of construction.  So remember the dates, and remember to keep your address up to date in the FCC's records.

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In the next few days, concerns about the protection of children from indecency and violence could lead to a report from the FCC to Congress urging use of the V Chip and other parental controls in devices other than television sets.  Remarks several weeks ago by FCC Chair Julius Genachowski suggesting that the FCC might want to look at content regulation beyond the broadcast medium, a view reiterated in an interview yesterday in TV NewsCheck, also suggest that  concerns about the exposure of children to indecency and other troubling programming on cable, online and by wireless devices may lead the FCC into unprecedented extensions of its regulation of entertainment content beyond the broadcast media.  An article today from Bloomberg News confirms that the FCC will be starting an inquiry to see if the television program ratings should be extended to cable and wireless entertainment services.  This extension of Federal regulation to protect children is occurring at the same time that similar concerns are being expressed by state legislatures, including the adoption of a recent law in Maine that effectively prohibits direct marketing to minors.

The report due this week follows a Notice of Inquiry issued by the Commission in March, as required by the Child Safe Viewing Act, legislation passed by Congress.  The law required that the FCC solicit public comment on "advanced blocking technology", the next generation of the V Chip, to see if these technologies can and should be extended to video programming other than broadcast television, including online communications, wireless communications (including video delivered to mobile  devices), DVRs and other video recorders, DVD players, and cable television.  The FCC Notice also asked why the current V Chip has seemingly not been used much by parents.  The FCC even asks if rules should be extended to video games - which were not specifically named in the legislation.  This would seemingly extend the FCC's jurisdiction far beyond its current limits.  The FCC's report is due by August 29. 

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A request for advertising rates by an ad agency representing the Mini Cooper serves as a reminder to broadcasters of the recently-imposed obligation to insure that broadcast advertisers do not discriminate on the basis of race or gender.  As we wrote several months ago, the FCC has adopted a new requirement that a broadcaster certify at license renewal time that their advertising contracts require advertisers certify that they were not making advertising decisions based on the race or gender of the audience of the broadcast station.  This was to eliminate the "no urban/no Spanish" dictates that many felt were a discriminatory part of the advertising landscape.  As demonstrated by the controversy that erupted when this request for rates was circulated, stations need to insure that their contracts contain language prohibiting discrimination in advertising buys, as any such dictates will not be a secret.  And once they get out, if a station has run a campaign purchased by an advertiser who had included such dictates, the station running the campaign may have difficulty in making the required certification as the station knows that the actions of the advertiser contradict any certifications that the advertiser may have made in signing the station advertising contract containing the required certifications.

Our earlier post on the issue suggested some language to include in an advertising contract disclaimer, and also discussed the issue of the positive use of racial or gender advertising specifications for ads targeting minority and gender specific audiences.  But the issue in the Mini Cooper case makes clear that many in the advertising community, and probably many in the media community, do not know about the adoption of the FCC's policy, or the proposal to extend the policy to cable advertising.  It is also interesting to note that the FCC has refused to provide more specific guidance on this rule, not even specifying the language that should be used in contracts.  Nor has the new license renewal form containing the required certification that the broadcaster must make about his compliance with this rule been released, making it unclear if this form has even passed review by the Office of Management and Budget under the Paperwork Reduction Act. 

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The question of when a digital music service is “interactive” and therefore requires direct negotiations with a copyright holder in order to secure permission to use a sound recording is a difficult one that has been debated since the Digital Millennium Copyright Act was adopted in 1998. In a decision of the Second Circuit Court of Appeals released today, upholding a jury decision in 2007, the Court concluded that Yahoo’s Launchcast service (now operated by CBS) is not so “interactive” as to take it outside of the statutory royalty despite the fact that the service does customize its music offerings to the tastes of individual listeners. To reach its decision, the Court went through an extensive analysis of both the history of the sound recording copyright and of the details of the criteria used by Launchcast to select music for a stream sent to a specific user. By determining that the service is not interactive, the service need only pay the SoundExchange statutory royalty to secure permission to use all legally recorded and publicly released music.  Had the service been found to be interactive within the meaning of the statute, the service would have to negotiate with each sound recording copyright holder for each and every song that it wanted to use on its service to get specific rights to use each song - potentially resulting in hundreds of negotiations and undoubtedly higher fees than those paid under the statutory license.

The issue in the case turned on an analysis of the DMCA’s definition of an interactive service.  The statute defines an interactive service as one where a user can select a specific song or “receive a transmission of a program specially created for the recipient.” It is clear that Launchcast did not allow a user to request and hear a specific song.  But, by specifying a genre of music, and by specifying favorite artists and songs and rating other songs played by the service, a listener could influence the music that was provided to it.  Was this ability to influence the music sufficient to make it an “interactive service” and thus take it out of the coverage of the statutory royalty?

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The Commission today announced the agenda for its August 27, 2009 FCC Open Meeting.  The agenda contains two Notices of Inquiry involving Wireless Telecommunications matters, as well as a Notice of Inquiry Notice of Inquiry about protecting American consumers by ensuring sufficient access to information about communications services.  The first of the Wireless NOIs seeks input regarding the factors that encourage innovation and investment in wireless services and aims to identify concrete steps the Commission can take to support and encourage further innovation and investment in the area, while the second solicits info for the FCC's next annual report to Congress on the status of competition in the mobile wireless market.  A copy of the agenda is available here.

So there are no proposed orders on deck for adoption and no radical agenda items at this month's meeting, but rather a few new proceedings as the new Commission starts to get its sea legs.  We'll see if September brings any Media issues to the table.  As we've written earlier there are plenty already in the pipeline. 

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The FCC yesterday issued another in its series of EEO random audit notices, asking that approximately 170 radio stations nationwide provide information about their hiring practices.  Information requested includes the last two years worth of broadcast EEO Public File reports, plus more complete documentation of the efforts outlined in the Public File reports and demonstrating that the information provided in the annual report was really conducted and accurately reported.  In addition, the FCC asks that a station provide an explanation if their most recent EEO public fie report cannot be found on the Station's website.  The FCC's Public Notice about this audit, which lists the stations that must respond, can be found here.  That Public Notice also reminds broadcasters of the obligation to post the EEO public file report on the station's website, perhaps indicating that the FCC has been investigating and has found instances where this is not being done.  Responses to the audit must be filed by September 21.  A form of the EEO audit letter is available here. 

On the same day as the FCC issued this audit for radio stations, it issued a Public Notice to remind Multi-Channel Video Programming Distributors (MVPDs) with six or more full-time employees, including cable systems, of their obligation to file by September 30 their Annual EEO Program Reports on FCC Form 396-C .  This form is to be filed through the FCC's electronic filing system.  This notice also reminds certain cable systems of the need to submit supplemental information about their hiring efforts to the FCC. 

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The FCC has announced the due date for their Annual Regulatory Fees - September 22.  We wrote about the amount of those fees here, and have just published an advisory summarizing some of the filing details.  Our Davis Wright Tremaine Advisory on these fees is available here.  Being even one day late with the payment of these fees can result in a penalty late fee of 25% of the amount due - a stiff penalty for being even a little late.  So read the advisory, review the FCC's instructions in the notices that the Commission is now sending to broadcasters, and check out to the links that the FCC's website information that are available through the advisory - and then pay what you owe on time!

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The four settlement agreements between SoundExchange and different groups of webcasters were published in the Federal Register today, setting the dates by which Internet radio operators need to opt into the terms of certain of these deals by filing a Notice of Election with SoundExchange.  The deals each have different opt in dates, so it does get confusing.  For larger webcasters interested in taking advantage of the rates set by the Sirius XM deal (which we summarized here), their notice must be filed on this form with SoundExchange within 15 days.  For noncommercial webcasters wishing to take advantage of the deal struck with the Northwestern College on behalf of Religious Broadcasters, but open to any noncommercial webcaster (a deal we summarized here), the option to be included in this deal must be made by an existing webcaster by September 15 (on this form for most noncommercial webcasters, but on this one, and similar forms for 2006 - 2008, for those eligible for the microcaster provisions).  Noncommercial webcasters affiliated with educational institutions who want to take advantage of the record-keeping breaks contained in that Noncommercial Educational deal, also summarized here, apparently need not submit a form until it pays its minimum fee for 2010, but the end of January.  As the fourth deal, with the Corporation for Public Broadcasting, does not even affect periods until 2011, affiliated stations need not file a notification with SoundExchange at this time, though CPB may have its own opt-in requirements for its member stations.

As we've written before (here and here), these deals are on top of the Pureplay settlement, summarized here, where an Internet radio station can still opt in by submitting this form by August 17 (or a small pureplay webcaster can file this form by that same date).  Broadcasters have had their own settlement (summarized here and here), where the opt in dates have passed, as have the dates for opting into the  "microcasters" deal for small commercial webcasters (see our summary here).  New stations just launching have the option to select from any of these alternative rate structures.  It is a confusing jumble of regulations that a webcaster needs to carefully sort through to determine which set of rates would best fit their own business model.  Read these deals carefully, as all have details that must be observed to insure full compliance.

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The FCC today asked for public comments on the petition of the MusicFirst Coalition asking the Commission to take action against broadcast stations who did not fairly address on air the proposed sound recording public performance royalty for terrestrial radio.  The Petition, about which we wrote here, alleges, with very few specifics, that some radio stations have taken adverse actions against musical artists who have spoken out in support of the royalty, and also that stations have refused to run ads supporting the performance royalty while running their own ads opposing the royalty (opposing ads which MusicFirst claims contain false statements).  MusicFirst submits that these actions are contrary to the public interest.  The FCC has asked for comment on specific issues raised in the Petition.  Comments are to be filed by September 8, and Replies on September 23.  

The specific questions on which the FCC seeks comment are as follows:

(i)      whether and to what extent certain broadcasters are “targeting and threatening artists who have spoken out in favor of the PRA, including a refusal to air the music of such artists";

(ii)    the effects of radio broadcasters’ alleged refusal to air advertisements from MusicFIRST in support of the PRA;

(iii)   whether and to what extent broadcasters are engaging in a media campaign, coordinated by NAB, which disseminates falsities about the PRA; and

(iv) whether certain broadcasters have evaded the public file requirements by characterizing their on-air spots in opposition to the PRA as public service announcements.

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The Corporation for Public Broadcasting has entered into a settlement with SoundExchange extending their current agreement on Internet Radio royalties for "Public" radio stations through 2015.  The previous deal, about which we wrote here, covered the period from 2006 to 2010.  This new agreement picks up in 2011 and covers included stations through 2015.  As in the previous deal, the new agreement has a payment by CPB to SoundExchange satisfying all royalties for all of the covered stations.  This was the fourth agreement that was announced last week, about which we wrote here, although details of this deal had not previously been released.  We have written about the other deals entered into under the Webcaster Settlement Act of 2009 ("WSA"), including the deals with Sirius XM (here) and with other noncommercial webcasters (here). 

This agreement covers stations affiliated with NPR, American Public Media, Public Radio International, and the Public Radio Exchange. CPB will pay to SoundExchange $2,400,000 in five yearly installments, covering up to 490 public radio stations in the first year, and up to 10 additional stations per year thereafter (up to 530 in 2015).  The fee is also subject to adjustment if all of the covered stations exceed certain listening levels.  Those levels, and the required true-up for performances in excess of the caps, are set out below.  However, the CPB payments for excess performances are limited to a total of $480,000 over the 5 year period of the Agreement:

Year              Music ATH Cap              Per Performance Rate

2011                279,500,000                         $0.00057

2012                280,897,500                         $0.00067

2013                282,301,988                         $0.00073

2014                283,713,497                         $0.00077

2015                285,132,065                         $0.00083

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Noncommercial webcasters were provided with two royalty options under settlements reached with SoundExchange pursuant to the Webcaster Settlement Act of 2009 ("WSA").  One settlement was with Noncommercial Educational Webcasters.  The other, when announced, was characterized by SoundExchange as being a settlement with noncommercial religious broadcasters, though it applies to any noncommercial webcaster who elects to be subject to its terms.  As set forth below, except for certain mid-sized noncommercial webcasters who have more forgiving recordkeeping options under the Educational deal, it would seem that the settlement with the religious broadcasters provides far more advantageous terms, and it also reaches back to cover the period from 2006 through 2010.  The Educational webcasters agreement covers only the rates for the periods from 2011-2015.  These settlements provide another example of the issue raised before the Senate Judiciary Committee of the arbitrary nature of the precedential nature that will be accorded to WSA settlements in future webcasting proceedings.  The noncommercial agreement with significantly higer prices has been accorded precedential weight in future CRB proceedings, while the one with lower rates is, by its terms, not precedential in future proceedings.

It is easiest to start with a review of the 'Religious" broadcaters settlement (which, as we said above, is open to any noncommecial webcaster).  The agreement provides for a $500 per channel fee for each channel or stream offered by the noncommercial webcaster.  For that flat fee of $500 per channel, the webcaster can stream up to 159,140 monthly aggregate tuning hours of programming on each stream.  An Aggregate Tuning Hour ("ATH") is one hour of programming streamed to one person.  Thus, if you have 2 people who each listen for an hour, you would have two aggegate tuning hours.  A station with 2 listeners who each listen for half an hour would have one ATH of listening.  4 listeners for 15 minutes each would also add up to one ATH.  The 159,140 monthly ATH number represents listening of approximately 221 average simultaneous listeners 24 hours a day, 7 days a week.  If a webcaster exceeds this listening level, it must pay for excess listening on a per performance (per song per listener) basis, at the rates set out below.

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The recent settlement on Internet radio royalties between Sirius XM Radio and SoundExchange provides yet another option for commercial webcasters trying to determine the royalties to be paid for the public performance of sound recordings.  While the settlement is signed by just these two parties, it will be published in the Federal Register and be available for all commercial webcasters who comply with its terms - which will essentially be any webcaster who is not a "Broadcaster" as defined in the NAB Settlement, about which we wrote here.  As set forth below, the royalty rates available under this settlement are slightly lower for 2009 and 2010 than those set by the Copyright Royalty Board back in 2007, but slightly higher than those available under the NAB settlement.  However, in 2013-2015, the rates available under this deal are actually lower than those agreed to by the NAB, meaning that they present a better deal for webcaster expecting their audiences to grow in the next few years.

First, the most important issue - how much will it cost?  As with the CRB decision, the NAB deal, and the Pureplay deal (about which we wrote here) as it applies to large pureplay webcasters, the rates established by the deal are based on a "per performance" charge.   A performance is one song as listened to by one listener.  So if a song is played on an Internet radio station subject to the deal and 100 people are listening at the time the song is played, there are 100 performances.  The rates established by the deal are as follows:

           Year              Rate per Performance

2009                      $0.0016

2010                      $0.0017

2011                      $0.0018

2012                      $0.0020

2013                      $0.0021

2014                      $0.0022

                        2015                      $0.0024

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The Commission today released yet another forfeiture for what has become an increasingly common oversight among broadcasters -- the failure to timely file a license renewal application for a satellite earth station.  What made today's forfeiture unique, however, is the fact that the Commission proposed to double the amount of the forfeiture based on the size of the broadcast licensee and its presumed ability to pay such a fine.  After balancing all the factors, the Commission ultimately ratcheted the fine down a bit, but in the end it assessed a $25,000 fine for the failure to timely file license renewal applications for two earth stations and for the continued operation of those facilities without proper authority.  In light of today's decision, broadcasters should be sure to review and track the expiration dates for all FCC authorizations. 

The FCC's decision in this case makes clear that in imposing a large fine in this case it is attempting to send a message that the Licensee will heed.  Per the Commission's decision:  "This $16,000 forfeiture amount [the baseline forfeiture]  is subject to adjustment, however.  In this regard, we consider the size of the violator and ability to pay a forfeiture, as well as its prior violation of the same rule sections before us today.  To ensure that forfeiture liability is a deterrent, and not simply a cost of doing business, the Commission has determined that large or highly profitable companies such as [Licensee] , could expect the assessment of higher forfeitures for violations, and that prior violations of the same or other regulations would also be a factor contributing to upward adjustment of apparent liability.  Given [Licensee's] size and its ability to pay a forfeiture, coupled with its previous violation, we conclude that an upward adjustment of the base forfeiture amount to $32,000 is appropriate."  [Emphasis added.]  In reaching its decision, the Commission noted that the Licensee in this case was a large broadcaster with "net yearly sales" of over $110 million.  

This forfeiture should serve as a clear warning to broadcasters both big and small to review and track the expiration dates of any earth stations or other authorizations held by a broadcast station.  Rarely (if ever) will the license term of an earth station authorization coincide with the renewal of the parent broadcast station, which means it is easy for the earth station to slip through the cracks.  

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Following the digital transition, issues with the reception of some television stations have highlighted the need for the use of outdoor antennas to receive the digital signal.  Last week, in three FCC decisions, the Commission made clear that its Over-the-Air Reception Device rules (the "OTARD rules") prohibit most zoning and other land-use restrictions, both governmental and private, on the use of such antennas.  These rules were adopted as a result of Congressional actions, and prohibit many restrictions on the installation and use of antennas used to receive television and other video signals either on private property owned by the user of the antenna or on property leased by the user.  Stations should become familiar with these rules, and let their viewers know of the rules, so that they can use them if they have problems installing antennas to receive the new digital signals over the air.

The rules apply to antennas that are one meter or less in diameter, or any size in Alaska, and are designed to receive or transmit direct broadcast satellite services, or one meter or less in diagonal measurement and are designed to receive or transmit video programming services through multipoint distribution services, including multichannel multipoint distribution services, instructional television fixed services, and local multipoint distribution services; and antennas designed to receive television broadcast signals.  For the Rule to apply, the antenna must be installed on property within the exclusive use or control of the antenna user where the user has a direct or indirect ownership or leasehold interest in the property upon which the antenna is located. 

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On Tuesday, just before the Senate recesses for its summer vacation, an abridged version of the Senate Judiciary Committee held a hearing on the proposed sound recording performance royalty for over-the-air radio.  Internet radio royalties were also encompassed in this discussion, principally concerning the issue of "platform parity", i.e. whether all music services subject to the sound recording performance royalty should pay a royalty determined by the same standard, or perhaps even the same royalty.  We've already written this week about some of the issues surrounding the broadcast performance royalty (why it's still being considered given that a majority of the House of Representatives has already signed a resolution against the royalty, here, and discussing the likely amount of the royalty were it to be adopted, here).  Neither of these issues was discussed in depth at the hearing.  But a multitude of other issues were raised in the hearing. and we'll address many of them over the next few days.  But first, today, a summary of the issues raised.

First, it should be made clear that there was not a full committee in attendance.  While a few Senators came and went without saying a word, questions were asked or comments made by only 5 Senators of the 19 on the Committee.  So judging how the full committee feels about the issues raised when only 5 Senators (4 of them Democrats) asked questions may not be a fair assessment of how the committee as a whole feels about the issues raised.  But, broadcasters should take warning that all of the Democratic Senators in attendance seemed to be sympathetic to the idea of adopting a broadcast performance royalty.  However, it must be noted that all also seemed somewhat sympathetic to the concerns about the financial impact of the royalty on broadcasters.  Just as members of the House have cautioned broadcasters to negotiate on a royalty before one is imposed on them, Senator Leahy of Vermont, the Chairman of the Committee, echoed those sentiments, promising that "legislation will move" on this issue - meaning that the issue will not simply fade away, despite the signatures on the NAB petition opposing the performance royalty.

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One of the fundamental questions that surrounds the proposed broadcast performance royalty for the use of sound recordings by over-the-air (or the "performance tax" as it has been labeled by the NAB) is how much it could it cost a broadcaster?  Right now, that question is difficult to determine, as the pending bills do not themselves provide any details as to what the fees would be, except for noncommercial entities and for small broadcasters for whom fixed yearly fees are proposed.  For a broadcaster with a station having over $1.25 million in yearly revenues, the current Congressional bills leave the amount of the royalty to be determined by the Copyright Royalty Board.  In the current Senate draft of the bill, the amount to be paid would be based on the "willing buyer willing seller" standard that has been so controversial for Internet Radio companies. But the hearing to be held by the Senate Judiciary Committee tomorrow will address, among other issues, the question of "platform parity," i.e whether all companies subject to the sound recording performance royalty should pay a comparable rate, so we may see that proposal change as it did in the House version, to some form of the 801(b) standard (about which we wrote here and here).

We will write about the differing rates paid by differing music services in the next few days, especially as it becomes clear as to what rates for Internet radio royalties were agreed to under the most recent settlements with webcasters pursuant to the Webcaster Settlement Act.   But even without a detailed analysis of all of the rates that have been agreed to, certain trends can be seen as to what SoundExchange, on behalf of the artists and copyright holders, believes to be a fair royalty for the use of their music.  And that number is likely to be a "Substantial" one, as suggested by a recent Congressional Budget Office review of the cost to broadcasters of the proposed performance royalty.

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Even though the National Association of Broadcasters has been successful in getting about 240 Congressional Representatives (far more than a majority of the House of Representatives) to sign onto a resolution opposing the adoption of a performance royalty for the use of sound recordings by broadcasters in their over-the-air programming, the efforts to enact that legislation have not died.  In fact, if anything, these efforts by the recording industry and related associations have intensified - and will be reflected in a hearing to be held by the Senate Judiciary Committee on Tuesday afternoon.   While I've seen some commentary suggesting that this is a futile effort because of the signatures on the NAB resolution, there are many reasons that broadcasters must continue to  be wary of the imposition of the royalty, and why they must keep up efforts to stop it from being enacted if they fear its potential impact.

How can this legislation be enacted if a majority of the House of Representatives have signed the resolution stating their opposition?  First, it is important to recognize that the NAB resolution, The Local Radio Freedom Act, is nonbinding.  Congressional representatives who have signed on to the resolution can take credit with their local broadcasters for having done so.  When the time comes for a vote on proposed legislation, it's possible that these same Representatives could change their mind, or be pressured by artists and labels in their districts to vote differently from their previously expressed sentiments.  With a long way to go in this session of Congress, facing a vote on the royalty and seeing how committed these Representatives are to the positions that they have taken on the resolution is still a real possibility.  The legislation imposing the royalty (or the "performance tax" in the words of the NAB) has passed the House Judiciary Committee, and the Speaker of the House has not yet specifically stated that the bill will not come to a full House vote, even though she has been pressed to do so by broadcast interests.

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