Legislative Priorities. 112th Congress

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1 Legislative Priorities 112th Congress

2 Promoting Television Viewer Choice in a Broadcast/Broadband Era Wireless companies claim that current amounts of spectrum allocated for high speed wireless Internet service are not sufficient to meet the expected increase in consumer demand over the next few years, and have urged the federal government to reallocate spectrum for future wireless broadband use. When the Federal Communication Commission (FCC) released its National Broadband Plan in March 2010, it called for the reallocation of spectrum, or airwaves, including spectrum currently used by television broadcasters. Broadcasters want to ensure that any government spectrum policies do not deny viewers access to the full potential of digital television (DTV), including high definition (HD) and multicast programming and mobile DTV. In early 2009, Congress directed the FCC to develop a National Broadband Plan to make recommendations that would ensure all Americans have access to broadband. On March 16, 2010, the FCC presented to Congress its 359-page plan. FCC Chairman Julius Genachowski and others expressed concerns about a looming spectrum crisis specifically, claiming that the current amount of spectrum designated for wireless broadband is insufficient to meet rapidly increasing demand largely driven by growing sales of smart phones like the iphone. In response to the National Broadband Plan, a number of bills were introduced in 2010 in both houses of Congress that addressed spectrum issues, including legislation expanding the FCC s authority to conduct auctions of broadcast spectrum and requiring the FCC to undertake a spectrum inventory. However, no legislation was passed by the 111th Congress. In June 2010, the White House issued a Presidential Memorandum on unleashing the wireless broadband revolution that promoted the idea of incentive auctions. In response to this, NAB President and CEO Gordon Smith wrote Lawrence Summers, then-director of the National Economic Council and assistant to the president for Economic Policy, outlining broadcasters core principles moving forward, including: Americans must maintain access to digital offerings currently provided by television broadcasters; Americans must not lose access to broadcast television based on signal strength degradations or limitations; Free TV viewers must continue to be the beneficiaries of video innovation; and Americans must not lose quality local TV because of new spectrum taxes. In August 2010, a study released by the Pew Research Center showed that the majority of Americans do not believe broadband expansion should be a major government priority, and one in four Americans feel this should not even be attempted by government. NAB believes that broadcast innovation and broadband development are not mutually exclusive goals. The finest communications system in the world requires both free, over-the-air broadcast television and high speed broadband services. While NAB does not oppose voluntary plans to develop spectrum policies, it does oppose any element of a spectrum reallocation plan that would not be completely voluntary. NAB also believes that no reallocation plan should move forward without a complete accounting of how the airwaves are allocated, licensed and used. Given that wireless companies are currently in possession of spectrum that has yet to be deployed, NAB strongly supports congressional efforts to conduct a spectrum inventory and analysis. Policymakers should recognize that broadcasting and broadband are both important aspects of America s communications system. Any spectrum reallocation efforts must be truly voluntary so as to not deny viewers access to the full potential of free, digital broadcast television. NAB is committed to working with the FCC and Congress to build a communications system that benefits all Americans.

3 Ensuring Radio Stations, Record Labels and Performers Continue Their Mutually Beneficial Relationship For years, the recording industry has pushed the Performance Rights Act, legislation that would impose a devastating new tax on local stations simply for playing music on the radio music airplay that provides free promotion to the record labels and performing artists. The Performance Rights Act could financially cripple local radio stations putting jobs at risk, stifle new artists trying to break into the recording business and harm the listening public who rely on local radio. For more than 80 years, the radio and the recording industries have enjoyed a mutually beneficial relationship: free airplay for free promotion. And it has worked, sustaining businesses on both sides. In fact, radio s free promotion translates to as much as $2.4 billion annually in music sales for record labels and performing artists. This doesn t even include the enormous revenues they receive from concerts and merchandising. But the labels like many businesses are struggling in this economy. They have failed to adapt to the digital age, and find their business model is broken. Their answer: impose a fee on local radio, their number one promotional tool, to make up for their bad business decisions. Congress has previously considered this issue numerous times, and each time determined radio should not be subject to a fee due to the immense promotional value radio provides record labels and performers. NAB and broadcasters have been, and continue to be, unalterably opposed to the Performance Rights Act since it was first introduced in In the 111th Congress, NAB worked with Reps. Gene Green (TX-29) and Mike Conaway (TX-11), and Sens. Blanche Lincoln (AR) and John Barrasso (WY), to introduce the Local Radio Freedom Act in the House and Senate, resolutions to oppose a performance fee on local radio stations. More than 300 members of the House and Senate supported these resolutions. In February 2010, at the request of House and Senate leaders, NAB began discussions with the music industry, which have been productive and ongoing. The goal of these discussions is to put this issue to rest and let both industries get back to what they do best: entertaining the listening public. Record labels and performers have thrived from radio airplay what is essentially free advertising from local radio broadcasters. Free, broadcast radio touches 239 million listeners a week, a number that dwarfs the reach of Internet and satellite radio. Free radio airplay provides performers increased popularity, visibility and record sales. In fact, 85 percent of listeners of all audio services identify radio as the place they first heard new music. And the promotion by local radio does not just include the music; it includes concert promotion, on-air interviews with bands and ticket and CD giveaways. Congress has continually recognized that local radio is different from other musical platforms and should not be subject to a performance fee. The Performance Rights Act fails to recognize the great benefit performers receive from the free airplay provided by radio stations and threatens the local radio stations that communities depend on. NAB remains unalterably opposed to the Performance Rights Act but is engaged in a good faith effort to resolve this issue in the best interests of both radio and the recording industry. Congress should oppose a congressionally mandated performance tax on free, local radio broadcasters that would jeopardize local jobs, prevent new artists from breaking into the recording business and harm the 239 million Americans who rely on local radio.

4 Local Broadcasting by the Numbers $10.3 billion in public service is generated in a single year by local broadcasters. 210,600 people are employed by television and radio broadcasters across the country. 98 of the top rated100 shows in the season were on broadcast television not cable or satellite. 76 percent of mobile phone owners would consider paying a one-time fee to access local radio stations through a built-in radio chip. 30,855 broadcast stations operate in the U.S. 239 million people listen to radio each week an increase of 4 million since million Americans rely exclusively on over-the-air television and do not subscribe to cable or satellite.

5 Providing Viewers with High-Quality Content through Retransmission Consent Negotiations In 1992, Congress provided local television broadcasters with the ability to negotiate with pay-tv companies (like cable and satellite) for fair compensation in return for permission to retransmit local stations signals. This process, known as retransmission consent, is critical to local TV stations ability to provide local news, community and emergency information, as well as top-quality entertainment programming to viewers. But pay-tv companies are attempting to upend the system, tilting the scales in their favor and encouraging government intervention in private market negotiations. Broadcasters oppose attempts to alter the system, which is working as Congress intended. When enacting the 1992 Cable Act, Congress created a process to allow broadcasters to negotiate for fair compensation for pay-tv companies use of their signals the retransmission consent process. Congress stressed that it did not intend to dictate the outcome of the marketplace negotiations between broadcasters and cable operators; the process simply provides stations with the opportunity to negotiate. In recent years, the FCC has reviewed this process, concluding that it takes place on a level playing field and is not in need of reform. The FCC found that the retransmission consent system has benefited broadcasters, cable and satellite operators and, most importantly, viewers. Retransmission consent negotiations are fair and market-driven. There is no need to change the process that Congress established and has worked well for nearly two decades. More than 99 percent of retransmission consent negotiations have been resolved amicably and without disruption of TV service. Compensation derived from retransmission consent supports stations ability to provide the local news and entertainment programming Americans depend on, especially the more than 30 million Americans who rely exclusively on over-the-air television. And that number is growing as more viewers are opting not to pay for subscription TV services, instead recognizing the many choices provided by local broadcast TV, including HD channels and new sub-channels, available for free with an antenna and online. Pay-TV companies should not be allowed to simply take local stations signals without permission, as they did before Cable and satellite operators should continue to be required to negotiate in a free marketplace for the right to use broadcasters signals to attract paying subscribers. Pay-TV companies compensate their other programming suppliers there is no reason that broadcasters should not be able to negotiate for fair compensation, especially when their signals carry the most highly-rated programming. Legislators and policymakers should reject pay-tv s call for government intervention and support the current system of fair, market-based negotiations. Congress and the FCC should continue to allow broadcasters and pay-tv operators to conduct private, market-driven negotiations for retransmission consent and avoid tilting the scales in favor of either party.

6 Keeping Americans Safe by Adding Radio s Emergency Capability to Mobile Phones Americans believe having free, local radio available on their mobile phone is important not only for up-to-date local news and the music they love, but also because broadcast radio would provide instant emergency information to Americans on the go. For significantly less than $1, manufacturers can include a receiver for broadcast radio in mobile phones that would give consumers a convenient new way to access free radio service and ensure that broadcasters Emergency Alert System (EAS) messages and critical information reach the widest possible audience. Even when mobile phone networks are overloaded, broadcast radio works, providing lifesaving information to Americans in times of crisis, wherever they are. Since the 1950s, radio and television broadcasters have been the backbone of the public warning system and remain so today, providing emergency alerts, live coverage during severe weather and other emergencies and detailed information on storm paths and evacuation routes. Following the tragedy of the September 11 terrorist attacks, public safety officials envisioned integrating other technologies, like mobile phones, with emergency alerting systems to reach Americans that may be on the move when a major incident occurs. But unfortunately, this has not come to pass. The year 2010 marked the ninth anniversary of the 9/11 tragedy, and in that time the mobile phone industry has not implemented a way to warn or inform their millions of users in times of emergency. While the penetration of broadcast radio capability in mobile phones is low in the U.S., the feature is highly valued and available in the global market. In Latin America and Asia, nearly 50 percent of users list radio as one of their top three choices in choosing a mobile phone making it more popular than mobile Internet access or even texting. But in the U.S. there are only a handful of phones on the market that offer this feature. NAB has been working to explain to both mobile telephone operators and policymakers the benefits to the American public of expanding the availability of radio service in mobile phones. There is no risk that radio receivers in mobile phones will clog up the existing wireless networks and impede the delivery of important emergency information. If your mobile phone were equipped with a radio receiver, you could get instantaneous emergency alerts wherever you are. Even when mobile phone networks are down, radio works. And radio reception will not drain your mobile phone s battery. A radio chip uses only a fraction of the power used by WiFi. Equipping mobile phones with a broadcast radio chip is a cost-effective way for ensuring that the public has ready access to lifesaving information. When mass produced, radio chips can be integrated into mobile phones for pocket change. In fact, three out of four mobile phone owners say they would consider paying the one time cost of enabling a phone with a radio receiver. Radio is a proven lifeline in times of emergency connecting consumers to the information they need to stay safe. And radio s emergency alerting capabilities are unparalleled. For the benefit of the American public, ensuring all mobile devices are broadcast radio ready should be a critical component of any next-generation wireless alerting solution. Congress, the Federal Emergency Management Agency (FEMA), the FCC and the mobile phone industry should consider ways to expand the availability of broadcast radio service in mobile phones.

7 Making an Impact in the 112th Congress In towns big and small, broadcasters provide their communities with national and local news, deliver informational programming, provide vital emergency warnings and offer top-quality entertainment choices. Free, local radio and television connect friends, family and neighbors to each other. NAB is proud to represent America s local broadcasters and their network partners, who are committed to serving your constituents every day. We look forward to working with you on the issues that impact the 239 million radio listeners and nearly 115 million television households in the U.S. For more information on the issues that impact radio and television broadcasters, visit or contact NAB s advocacy team at the numbers below. Contact Us NAB Government Relations NAB Legal and Regulatory Affairs N Street NW Washington DC

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