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Rotella: New Congress Means We Have a Lot of Work to Do

NJBA president/CEO tells broadcasters to remain vigilant and guard against potential reintroductions of performance tax legislative, other threats to free OTA radio

The author is president/CEO of the New Jersey Broadcasters Association. Rotella shared this commentary with press outlets Wednesday morning, and he highlights several policy issues of interest to radio broadcasters. His article has been lightly edited for style and length.

Broadcast association executives, and indeed all association executives, both national and local, have their work cut out for them this fall with the election and appointment of a record number of new representatives and congressional staff.

Make no mistake, with this new crop of freshman Congressmen and Congresswomen, (along with a handful of new Senators), it is imperative that we be ever-present on Capitol Hill to help educate and inform the hundreds of new congressional staffers, and perhaps more importantly, their hundreds of counterparts in House leadership and committee staff. And this important work can’t begin too early as we advance our sacred mission of advocacy and education.

Representing the broadcast industry, the New Jersey Broadcasters Association will be getting an early jump on the important initiatives we advanced in the last Congress, like the pirate radio legislation, SANDY Act, enhanced FM signal emergency alerting technology, along with the reinvigoration of SECC authority by the FCC, reformulation of arcane rules surrounding commercial radio ad disclaimers for automobile sales, streamlining of FCC procedures, and of course, our opposition of any performance royalty tax on broadcast radio.

Make no mistake, our opponents seeking to impose a toxic performance tax on broadcast radio have been gearing up for their “close-up” with the new members of Congress gaining power in January. And this issue, and its opposition, is not unique to Democrats or Republicans. Indeed, it crosses party lines. And we best not be complacent merely because we have beaten back this measure for over a decade in at least five Congresses thus far. All it takes is a simple majority in the House just one time, or for a late night amendment to be included in a “must-pass” piece of legislation, to destroy the broadcast industry

Every Congress, a few well meaning, but misinformed legislators, appear as to forget that they represent the people of their districts and not the foreign-owned record companies, and introduce, in one form or another, the noxious royalty fee legislation commonly known as the “performance tax.” It does no one any good at all, and helps stifle the creative growth and opportunities for success of emerging artists, while destroying the best thing that ever happened to our diverse, shared culture: the free-over-the-air delivery of all forms of entertainment, local news, and most of all — music, to everyone, for free — no matter your social status or place of origin — radio!

A performance tax would destroy radio as we know it, and indeed harm everyone; artists, composers, communities, broadcasters and most sadly, all Americans. Nielsen studies confirm that close to 300 million of our friends, family, neighbors and coworkers in America (the very constituents that these legislators are supposed to serve) listen to radio every day.

The good news is that support for the Local Radio Freedom Act supporting local radio continues to be strong in the House and the Senate. In the last Congress, more than 180 members of the House are on record in opposition to a performance tax. New Jersey Broadcasters would like to express our deep appreciation to Congressmen Gottheimer, LoBiondo, Frelinghuysen, Pallone, Smith, Pascrell, Lance, Sires, Payne, Coleman and Norcross for their courageous leadership in previously opposing this unfair and wrongheaded tax. These legislators are to be applauded for their early recognition and constant vigil over free-over-the-air radio’s service to the local communities they represent across the Garden State.

The P-Tax would demand exorbitant royalty fees from broadcasters to pay for the a few record labels failed business models. And these new royalty fees would be on top of the billions the radio industry already pays in royalties to artists and songwriters through ASCAP, BMI and SEASAC! In these challenging economic times (or in any economic model), can any industry afford such confiscatory increases in net operating costs? And the public would gain no return for the fees taken. No community service, no public announcements, no lifesaving Amber Alerts or EAS warnings. Nothing at all but making a few more millionaires and billionaires richer, and all at the public’s expense.

Nevertheless, the unavoidable result of the performance tax’s passage is much more than merely wreaking economic havoc on local radio stations. The passage of the bill would force the closing of a majority of local radio stations in New Jersey and across the country. To be sure, the prospect of enhanced opportunities for localism, diversity and outreach would be hushed immediately. Station groups and networks would be hurt, as well. Localism would be out the window and thousands in New Jersey would lose their jobs.

But this is all not about dollars; It is about common sense. Much more horrific, the closure of these vital broadcast outlets across America would also decimate our Emergency Alert System capabilities and pose a genuine threat to homeland security. And for what? So a few greedy foreign owned record companies can try to line their coffers with more American dollars, taking billions out of our economy? And worse, the move would directly or indirectly, wipe out hundreds of thousands of jobs in the United States.

Moreover, a new oppressive performance tax would hurt emerging artists who might not ever get their music on the air if stations have to pay a fee every time a new song is played. Performing artists almost universally recognize the honest and incomparable value only broadcast radio air-play adds to their industry and business model. The record label’s recognition of the unparalleled promotional value of radio airplay contradicts statements made by recording industry representatives in Washington who have characterized radio airplay as “a form of piracy.” What nonsense.

Our two industries have worked perfectly together for decades. Certainly, no artist would ever have an opportunity to become famous and successful absent their natural symbiotic partnership with free-over-the-air-radio! This symbiosis evinces the inescapable conclusion that both sides are benefiting. Why do you think local stations across the country are bombarded every day with sample CDs MP3s, and “demos” by emerging artists (and seasoned artists) begging station managers to play their new tune? It’s because broadcasters and artists genuinely “get it.” It’s how they sell records, (yes, vinyl records are making a comeback) CDs, downloads, video and merchandise.

Worse, the P-Tax’s foreseeable fractionalization of collaborative artists could hurt everyone associated with the creative process and diminish the very projects or songs they want to promote to be successful. It’s a recipe for collusion, litigation, division, unfairness, and disaster.

Equally disturbing is the disingenuous comparison of broadcast radio to internet providers and pay/subscription audio entertainment programming and fees paid by satellite radio. The proponents of this legislation want us all to be alike — just because cable, satellite and Internet services pay these royalties. We are not alike! Remember how radio stations helped warn and serve New Jerseyans crushed by Superstorm Sandy? Well, New Jerseyans do. Free over-the-air radio and television are the only exclusively local media in existence!

Our cherished stewardship of the public airways is a public trust, and no industry is more publically spirited. We have a very different mission from most; namely, to operate in the public interest; from the EAS for local emergency notification such as NJ Amber Alerts and to respond to community wide emergencies like Superstorm Sandy, ice and snow storms, and other extreme weather hazards, to local news of community events and happenings in entertainment from our great and diverse variety of formats.

The internet and satellite applications referred to in mislabeled “equitable royalty fee” arguments (and the specious claim of pure-play “radio” designations) do not provide such essential public service, nor are they designed or equipped to do so.

And to lie to rest the specious argument that the performing artists will get any money from the new performance tax, all you need to do is review the typical recording contract any new artist is “forced” to sign if they want to get their coveted “record deal”. It often provides for very little compensation to flow to the artist after record production and promotion costs are re-cooped.

Finally, I feel that our great New Jersey Broadcaster Association represents much more than the radio and television industry in the Garden State. We also represent the vast and diverse audiences that our Congress members so ably serve. We represent the people, and we stand with them. We respectfully ask all of Congress to do the same. It’s the right thing to do.

So keep listening, New Jersey! Let’s get to work together to inform our new representatives in Washington. And let’s keep New Jersey radio free for all to enjoy!