FM chips and royalties dominate Future of Audio hearing


U.S. CongressDespite suggestions that there would a laundry list of topics on the House Communications Subcommittee hearing on “The Future of Audio,” almost all of the give and take revolved around two issues.

On the FM chip front, Emmis Communication’s Jeff Smulyan pushed hard for getting the cell phone sellers to simply turn on the chips that already are present in many models. Pushback came from CTIA’s Christopher Guttman-McCabe and CEA’s Gary Shapiro, who both argued that there simply is little consumer interest in an FM-equipped cell.

The just-announced deal between Clear Channel and Big Machine Label Group was a major topic of conversation. Musician Ben Allison and RIAA’s Cary Sherman welcomed the acknowledgement from Clear Channel that on-air airplay had value to radio broadcasters, and Pandora’s Tim Westergren said it was a clear sign that the entire royalty system was broken.
Commonwealth Broadcasting head Steve Newberry, representing the NAB, said that the association took no position on a private deal between two independent businesses but is holding its position that the promotional value of airplay is of more value to musicians and labels exceeds value to broadcasters to provide the airplay and repeated its objection to a government-imposed performance tax.

There was a brief exchange between Newberry and Mike Doyle (D-PA) on the topic of LPFM – Doyle questioned NAB’s objection to allowing the stations to increase power from 100 Watts to 250 Watts and to making it easier to get second-adjacency waivers from the FCC. Newberry simply stated the NAB’s position that a lot of work went into crafting the Local Community Radio Act, and it should move forward as written.

An overview of the hearing indicated that the topics of local radio caps and cross-ownership restrictions on both broadcast/print and radio/TV were on the table, but none of them came up to any appreciable degree.

RBR-TVBR observation: In the final analysis, this hearing seemed to be a fact-finding mission rather than a preliminary to the introduction of specific legislation.

However, don’t be surprised if Performance Royalties shows up — E&C Ranking Member Henry Waxman (D-CA) spoke in favor of it and it could easily be introduced in the Judiciary Committee as it was last time.