RSS
March 1, 2011 – Nebraska’s Senator Ben Nelson has introduced a bipartisan resolution declaring that Congress should not impose any new performance fees or taxes on local radio stations.
“Congress should not impose taxes on small businesses in Nebraska and nationally which would threaten their financial viability,” Senator Nelson said. “Across rural Nebraska, local radio stations provide a unique link to local news, weather and entertainment which should not be jeopardized by new taxes from Washington.”
The Local Radio Freedom Act resolution would help protect the symbiotic relationship that has existed between the broadcasting and sound recording industries for more than 80 years. In this relationship, the record labels allow the performance of music by local radio stations for free, and the radio stations provide the studios’ artists with free exposure and promotion.
The artists are introduced to the public, build their fan bases, and get free over-the air advertising for their records, concerts and merchandise.
At the same time, local radio stations build listener bases and are able to charge advertisers, which allows the stations to provide local news, sports and weather to listeners for free. This information is crucial during local emergencies or natural disasters.
The resolution’s introduction comes as the recording industry continues to press Congress for legislation which would require radio stations to pay a fee for playing music on the air. Similar legislation has been proposed in previous sessions of Congress.
A new performance royalty would do considerable harm to the local broadcast industry, which is already facing significant financial challenges.
In a letter to Senator Nelson, Nebraska Broadcasters Association President Marty Riemenschneider wrote: “Congressionally mandated performance fees on free, local radio broadcasters would jeopardize local jobs, prevent new artists from breaking into the recording business and harm the public service we do every day. … As we work to escape one of the worst recessions in the history of the United States, now is not the time to hit local radio with new additional financial costs.”
There are 177 broadcast radio stations in Nebraska, which provide 843 full-time jobs and contribute $36.5 million per year to the state’s economy.
Text of the Local Radio Freedom Act, sponsored by Sen. Nelson (D-Neb.) and Sen. John Barasso (R-Wyo.) follows:
Whereas the United States enjoys broadcasting and sound recording industries that are the envy of the world, due to the symbiotic relationship that has existed among these industries for many decades;
Whereas for more than 80 years, Congress has rejected repeated calls by the recording industry to impose a performance fee on local radio stations for simply playing music on the radio, as such fee would upset the mutually beneficial relationship between local radio and the recording industry;
Whereas local radio stations provide free publicity and promotion to the recording industry and performers of music in the form of radio air play, interviews with performers, introduction of new performers, concert promotions, and publicity that promotes the sale of music, concert tickets, ring tones, music videos, and associated merchandise;
Whereas committees in the Senate and House of Representatives have previously reported that ‘‘the sale of many sound recordings and the careers of many performers have benefitted considerably from airplay and other promotional activities provided by both noncommercial and advertiser-supported, free over-the-air broadcasting’’;
Whereas local radio broadcasters provide tens of thousands of hours of essential local news and weather information during times of national emergencies and natural disasters, such as on September 11, 2001, and during Hurricanes Katrina and Rita, as well as public affairs programming, sports, and hundreds of millions of dollars of time for public service announcements and local fund raising efforts for worthy charitable causes, all of which are jeopardized if local radio stations are forced to divert revenues to pay for a new performance fee;
Whereas there are many thousands of local radio stations that will suffer severe economic hardship if any new performance fee is imposed, as will many other small businesses that play music including bars, restaurants, retail establishments, sports and other entertainment venues, shopping centers, and transportation facilities; and
Whereas the hardship that would result from a new performance fee would hurt businesses in the United States, and ultimately the consumers in the United States who rely on local radio for news, weather, and entertainment, and such a performance fee is not justified when the current system has produced the most prolific and innovative broadcasting, music, and sound recording industries in the world: Now, therefore, be it
Resolved by the Senate (the House of Representatives concurring), That Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for such public performance of sound recordings.
###