The Commerce Committee hearing on the Future of Radio heard testimony from a wide variety of industry players, and there could have been room for more. Russ Withers represented the NAB and group owners. Mac McCaughan of Merge Records was the small record label owner; Tim Westergren of Pandora represented internet radio; Free Press’s Derek Turner was the watchdog; Carol Pierson made the case for small community and LPFM broadcasters; and Dana Davis Rehm gave NPR’s perspective.
When Byron Dorgan (D-ND) had the floor, he agreed with Turner’s assessment that the FCC went into the ownership proceeding looking at how it could justify deregulation, not how it could protect the public interest. Dorgan asked Withers if it wasn’t true that local owners provide better local programming than the giant out-of-state companies. Withers said his company competes against one of those large out-of-state broadcasters (he later admitted that the 800-pound gorilla he was discussing was indeed Clear Channel), and said he has 16 news people to the big company’s one in the market. "I agree with you if it’s abused it’s like anything else." He said ownership concentration in and of itself if not the problem, it’s how the operator runs its stations, and that they can be run well or poorly regardless of a company’s size or the location of its headquarters.
When he admitted that he was talking about CCU, he noted that the radio giant had realized it could not simultaneously run both a large market and small market group, which was why it has been divesting its smaller markets to broadcasters who likely will do a better job running them.
A key element lacking during this session was time (key votes ate into the session’s schedule), a full quorum of senators, and representatives from big radio and big music. Committee Chairman Daniel Inouye (D-HI) came late and left early, but promised further action in the same committee room in the near future.
If there was one thing everybody (with the possible exception of McCaughan) could agree on was that the royalty structure needs to be put together in such a way that it makes sense. The exorbitant rates put in place for internet performances was called a business killer by all. Withers reiterated the broadcast position that free airplay equals free promotion with everybody a winner and did not want to see any royalties imposed for airplay.
McCaughan may have provided support for that in a way. He said getting his indy artists on the air was critical to the success of his company. However, his target has been the noncommercial universe, since commercial formats rarely give his stable of artists any consideration. He agreed, too, that the internet was of great importance to marketing his artists. In both his written and oral testimony, he was silent on the royalty issue.