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New Bill Would Tie Retrans to Performance Payment - Broadcasting & Cable

New Bill Would Tie Retrans to Performance Payment

Bipartisan legislative duo says it is only fair
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Reps. Marsha Blackburn (R-Tenn.) and Anna Eshoo (D-Calif.) have reintroduced the Protecting the Rights of Musicians Act, a bill that is now a one-two punch aimed at broadcasters. The bill would stipulate that owners of both TV and radio stations could not seek retrans payments for their TV stations unless those co-owned radio stations paid a performance fee for music airplay.

The National Association of Broadcasters has been fighting congressional efforts, backed by record labels and artists, to legislate a performance royalty payment. Blackburn, who counts Nashville musicians among her constituents, has been a leading proponent of the payments and of legislation.

Broadcasters argue they already compensate artists through airplay that drives sales of their songs.

The second blow to broadcaster interests is an add-on to the bill that would prohibit the FCC from mandating radio chips in mobile devices. Broadcasters have been pushing for making those mobile devices broadcast receivers as well, given that many already have the chip but don't have it activated.

“Broadcasters have repeatedly told us that retransmission consent payments are fair because cable and satellite stations make millions by retransmitting local broadcast content. However, when it comes to music, the same broadcasters, many who own both TV and radio stations, sing a completely different tune,” Blackburn said. “Our legislation seeks to modernize outdated law and put an end to a loophole that allows AM/FM radio to avoid paying musicians for their creative work."

As to adding the chip language. "Everyone but AM/FM radio pays. We have included language to prevent the FCC from extending this injustice through a potential federally imposed chip mandate for mobile devices," said Blackburn.

"Broadcasters receive billions of dollars annually when their local broadcast television programming is aired by cable and satellite operators, yet when it comes to the music played on their AM/FM radio stations, they refuse to compensate the creator of the music. This double standard is patently unfair,” said Eshoo.

Blackburn is vice chair of the Communications Subcommittee and Eshoo is ranking member.

"NAB respectfully opposes the legislation introduced today by Reps. Blackburn and Eshoo," said NAB spokesman Dennis Wharton. "This bill devalues the indispensable role that hometown broadcasters play in communities across America. We thank the 166 Representatives and 13 Senators who have co-sponsored the Local Radio Freedom Act and look forward to gaining more support for a resolution that recognizes the enormous promotional value radio airplay provides record labels and musicians."

The Blackburn/Eshoo bill would also bar federally mandated FM chips in cellphones."

That is a resolution opposing a new performance "fee, tax, royalty or other charge" on broadcast radio musical performances. It has 162 sponsors in the House.

NAB has said it does not support a chip mandate, but it has said wireless carriers should voluntarily activate the FM chips already in the phones. "For public safety reasons alone, FM chips already in cellphones should be turned on," said Wharton.

“The ‘Fair Play Fair Pay Act’ [http://www.broadcastingcable.com/news/programming/performance-payment-bi... and the ‘Protecting the Rights of Musicians Act’ both show that Congress is waking up to the Broadcasters’ games," said the Music First coalition. "How can they justify demanding billion dollar payments for their TV programming when they refuse to pay a cent for music on the radio?"

The Information Technology Industry Council applauded the chip mandate portion of the legislation.

“Innovation stems from the ability to find solutions in ways never thought possible, and not from looking at a problem or outcome through a prescribed lens," VP for government affairs Vince Jesaitis said in a statement. "This legislation...recognizes the importance of innovation and removes the threat of mandating outdated technology be built into mobile devices....these provisions protect the ability to innovate, and we applaud the introduction of this bipartisan bill and urge Congress to move forward with it expeditiously."

The Consumer Electronics Association, which has opposed the chip mandate, liked what it heard, too.

“By prohibiting the Federal Communications Commission from imposing the inclusion of radio tuners in mobile devices, this new bill recognizes that consumers and technology innovators - not the government or analog radio broadcasters - are best positioned to determine the functions and features of cutting-edge mobile devices," said CEA President Gary Shapiro. "Importantly, this bill also starts a worthwhile and much needed conversation about digital age music payment systems."

The American Television Alliance, which has been pushing for retrans reform, took the opportunity to hammer broadcasters over what it called retrans "hypocrisy."

"Every year the broadcasters demand billions in retransmission consent fees from cable and satellite providers. In fact, total retrans fees are projected to hit $9.3 billion in 2020, up from less than $2 billion only a few years ago," said the alliance in a statement. "However, the same broadcasters refuse to pay “fair value” to musicians whose music is played on broadcast radio stations...Congressional Democrats and Republicans have shown a willingness in recent weeks to work together to pass meaningful legislation. The “Protecting the Rights of Musicians Act” is another opportunity," sid ATVA.

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