DC Policy Update:

January 23, 2004

As the 2004 election cycle picks up, the policy machinery will focus in on agenda-setting more than actual policy implementation. From the standpoint of musicians and music fans, there will be a number of initiatives worth watching (and participating in). While it is unclear what will actually be enacted in 2004, it is likely that (depending on the results of the elections and turnovers in congressional/administration leadership) some or all of these issues will be acted upon in 2005.

1. Low Power Radio
The FCC is expected to ask Congress for full authorization to increase the number of low power fm radio licenses currently available. Congress will actually have to pass authorizing legislation to allow the FCC to place these stations in more populated markets where spectrum space is limited. It is expected that Congress will hold hearings on this issue, and legislation is likely to be introduced within the next few months.

2. Media Ownership
The FCC's efforts to lift many longstanding media ownership rules have been stopped by the 3rd Circuit Court of Appeals, thanks in large part to our friends at Prometheus Radio Project and the Media Access Project. Congress, meanwhile, has been debating a variety of strategies to scale back the attempted deregulation. The Senate has moved aggressively on a number of fronts, including overwhelming passage of legislation that "vetoed" the entire rule change. These efforts have widespread bipartisan support in the House of Representatives, but House leaders (including Tom Delay and Commerce Committee Chairman Billy Tauzin) have worked in partnership with the Bush Administration to block hearings or a vote on these issues. The situation is extremely fluid, and it will be fascinating to see what develops over the next few weeks.

3. Localism in Media
The FCC has responded to criticism of their media ownership policies by creating a task force charged with examining localism in media. This task force is holding public hearings across the country, and is issuing a "Notice of Inquiry" -- a proceeding that asks for public comment on a variety of questions asked by the Commission. It is our hope that this NOI will tackle difficult questions like structural barriers for local and independent artists. This NOI, and the national public hearings, are both excellent opportunities to let FCC Commissioners and staff understand your concerns about local radio.

4. Peer to Peer file trading
The evolution of digital music services (both licensed and unlicensed) will be the focus of Congressional hearings and a working group chartered by Senator Norm Coleman. Senator Coleman recognizes the need for dialogue between the different perspectives on the digital music space, and hopes that this group will lead to some constructive solutions to some of the challenges we all face.

Media ownership, copyright, low power radio

December 11, 2003

Congress is almost ready to pack it up for the holidays, but some late-moving bills regarding media and copyright did make some headway.

Media Ownership
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In the media ownership realm, a tentative last minute congressional compromise may lead to the TV ownership caps to be set at 39 percent. This is slightly higher than the earlier limit of 35 percent, but not as high as the 45 percent that the FCC ordered in its June 2 Rulemaking. Conveniently, the 39 percent is just high enough that current owners CBS and Fox would not be forced to divest of some TV stations to meet new congressional caps.

The FMC sees this middle ground compromise as neither a victory nor a disappointment. To us, the TV cap was possibly the least important of the media ownership issues that were included in the June 2 FCC decision. What we remain concerned about is the relaxation of the cross-ownership rules, which would allow owners of newspapers to buy TV or radio stations, and vice versa, thus allowing large media corporations to buy up even more media properties and expand their reach and influence through new means. These rules were barely addressed by Congress, but have instead been attacked through the legal process. In fact, all FCC rules that were passed in June 2003 have been stayed by the 3rd Circuit Court of Appeals pending legal action in the case of Prometheus Radio v. FCC.

Prometheus v FCC enters the oral argument phase on February 11, 2004. Media Access Project, which is arguing on behalf of Prometheus, has a great page on their website about the status of this case.

That being said, the most promising piece of legislation on media ownership matters is S 1046 the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003." This bill is important because it reinstates cross-ownership limits between TV and newspapers; clarifies that the FCC has the authority to "re-regulate" if it is in the public interest; mandates field hearings during ownership reviews; and forces divestiture of radio station clusters that exceed newly defined markets.
Currently this bill is in a holding pattern, but if it is allowed to come to the Senate floor, it would likely pass by a wide margin. This could put significant pressure on the House leadership to allow consideration on their side of the Capitol.

Senator Feingold’s S 221, the Competition in Radio and Concert Industries Act would amend the Communications Act of 1934 to facilitate an increase in programming and content on radio that is locally and independently produced, to facilitate competition in radio programming, radio advertising, and concerts, and for other purposes.

The FCC on Low Power Radio
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The FCC is also looking at the question of localism in radio, with a task force holding field hearings across the country to gather testimony on citizens’ attitudes toward local media. The next field hearing is in San Antonio, TX on January 28, 2004. One outgrowth of this initiative will be a renewed push to authorize the FCC to allow new Low Power FM licenses for non-commercial use in larger markets. Over the past few years, roughly 1,000 new LPFM stations have gone on the air or are in the process of receiving their construction permits – but these stations are limited to small towns and rural areas where spectrum is readily available. To grant licenses in urban markets, where the radio dial is more crowded, Congress needs to pass legislation authorizing the FCC to modernize their interference protection rules.


The FCC on Pay for Play
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Also, FCC Commissioner Adelstein has been very outspoken on his interest in cleaning up pay for play (or the “new payola”) that is rampant in commercial radio. In a November 5, 2003 speech to the Federal Communications Bar Association, Commissioner Adelstein said, “It’s time for the FCC to probe whether our rules adequately deter potentially new forms of payola. If the practices are still occurring, we have direct statutory authority, as well as an overall charge to regulate radio communications. So there is a real need for the FCC to review its sponsorship identification rules to make sure we are addressing modern day pay-for-play practices in the most effective way possible given our clear responsibility under the law.” We applaud Commissioner Adelstein for his leadership on this issue, and encourage citizens with information about pay for play to contact us if you’d like suggestions for how to educate the FCC on this issue. His entire speech can be read here: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-240871A1.doc


Copyright and P2P Networks
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Finally, a number of bills have been introduced in Congress that could impact the music community. On November 12, Senators Dianne Feinstein (D-CA) and John Cornyn (R-TX) introduced S 1932, “Artists Rights and Theft Prevention Act”. This bill is designed to increase the penalty for those who make copyrighted materials – movies and CDs – available on peer-to-peer networks on the internet prior to their official release dates. Although the unauthorized distribution of copyrighted materials is already subject to various laws, the ART Act would make the action of distributing “pre-releases” a felony in every state. There is also language in the bill that would make it easier to prosecute violators by assuming that any copyrighted work posted online before its release has been downloaded at least 10 times, making guilty parties liable for damages of at least $2,500. The bill is supported by the Motion Picture Association of America (MPAA) and the RIAA.

Lowering the Boom on Copycats
Wired, November 15, 2003

Senate Bill Targets Internet Pirates
By David McGuire
Washington Post, November 13, 2003


On November 22, Senator Orrin Hatch (R-UT), with the support of Feinstein and Cornyn, introduced the “Enhancing Federal Obscenity Reporting and Copyright Enforcement Act of 2003” (EnFORCE) Act. This bill would alter existing copyright law to make enforcement of copyright violations easier. However, the most shocking part of this bill is a mention of an antitrust exemption for the major labels with respect to anything covered by the mechanical license. In his floor statement, Senator Hatch said this:

[…] “the EnFORCE Act will expand an existing antitrust exemption to conform the law to market realities. Today, an antitrust exemption in the Copyright Act gives record companies and music publishers the flexibility they need to negotiate mechanical royalty rates in the rapidly evolving market for legal music downloading. These parties now need the same flexibility to ensure that they can negotiate royalties associated with innovative forms of physical phonorecords, like enhanced compact disks and DVD audio disks.”

MPAA, RIAA seek permanent antitrust exemption
By Andrew Orlowski
The Register (UK), November 26, 2003


In related news, Senator Hatch sent a list of questions regarding the practical and legal uses of peer-to-peer networks to the Government Accounting Office (GAO) following a September 2003 Senate Judiciary hearing on peer-to-peer networks and child pornography. Surprisingly, in their November 19 reply letter, the GAO listed many of the positive uses of peer-to-peer systems, including file sharing, instant messaging, distributed software and collaboration applications. They also responded to Hatch’s questions about punishment for posting copyrighted materials before the release date. An interesting read. http://www.futureofmusic.org/images/GAOd04207r.pdf

Policy Update: The FCC and Media Concentration
We can still prevent further consolidation!

October 30. 2003

Opponents of the new media ownership rules voted in by the FCC on June 2 are following three distinct but overlapping paths: FCC reconsideration, Congressional legislation and court action.

There has been remarkable progress in Congress, but opponents of FCC Chairman Powell's plan still face a number if difficult hurdles. On September 16, the Senate passed SJ 17 by a vote of 55-40. This measure -- a Resolution of Disapproval under the Congressional Review Act, or "congressional veto" -- now moves to the House of Representatives. At least 200 Representatives have signed a letter circulated by Rep. Maurice Hinchey and others calling for a vote on the Resolution, but the House leadership (primarily Speaker Dennis Hastert, Majority Leader Tom Delay and Commerce Committee Chairman Billy Tauzin) are keeping the measure from coming to a vote.

Another promising piece of legislation, S 1046 the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003" has been moving through the Senate and may be brought to the floor early next year. Introduced by Senator Ted Stevens (R-AK) the bill now has roughly 47 Senate co-sponsors (including 12 Republicans). This bill is important because it reinstates cross-ownership limits between TV and newspapers; clarifies that the FCC has the authority to "re-regulate" if it is in the public interest; mandates field hearings during ownership reviews; and forces divestiture of radio station clusters that exceed newly defined markets. If this bill is considered on the Senate floor, it will likely pass by a wide margin. This could put significant pressure on the House leadership to allow consideration on their side of the Capitol.

As all of this is happening in Congress, the 3rd Circuit Court of Appeals has placed a stay on the implementation of the FCC rules pending their consideration of a lawsuit brought by the Prometheus Radio Project (who are very ably represented in this case by the Media Access Project and Center for Public Representation). Oral arguments in this case are February 11, 2004, and it is unlikely that the court will rule much before March. This gives Congress a brief window to consider various bills next January if time runs out this session.

So what does this all mean? The Congressional response to the FCC rules directly mirrors the response of the public. There has been a strong, unprecedented and bipartisan reaction against the effort of Michael Powell's FCC to undo longstanding media ownership rules that have helped create a system that thrives on the concepts of localism, competition and diversity. Rather, in many quarters in Washington there is much greater will to look at the flaws in EXISTING system (paging Clear Channel) than replicating the disaster that is radio consolidation.

July 30, 2003

For over a year it was commonly assumed in Washington, DC that FCC Chairman Michael Powell would be able to plow through his agenda and pave the way for further consolidation in media. Why would this be the case? Because for way too long media policy has been made behind closed doors, dominated by industries that benefit from chipping away at any sense of public interest responsibilities. The media, according to conventional wisdom, didn’t need to report on these issues, because even if the issues were covered the public wouldn’t care.

Guess what?

Despite a disturbing lack of press coverage during the FCC’s rulemaking, over 2.5 million citizens contacted the FCC to express their concern about media consolidation. And since the FCC voted on June 2, the visibility of the debate has skyrocketed. Senator John McCain said he has heard more about this issue than any Commerce Committee issue he’s worked on in his three terms in office.

FCC Chairman Powell has said a “silent majority” of Americans support his deregulatory agenda. His backers likely assume that citizens will stop paying attention if they think the battle is over and that we’ve lost. Funny thing is, we haven’t lost yet. There are at least a half dozen ways to turn this vote around. We might even push things in the other direction. Imagine that.

We are grateful for the tireless and effective work done by many organizations working in these issue areas – groups like AFTRA, AFM, Recording Academy, Recording Artists Coalition, Just Plain Folks, CD Baby, Media Access Project, Prometheus Radio Project, National Federation of Community Broadcasters, Consumers Union, Consumer Federation of America, Common Cause, Reclaim the Media, and many, many others. In addition, the FMC would like to thank the almost 5000 musicians who co-signed a letter expressing their concerns about media consolidation, as well as Don Henley from the Eagles, Mike Mills from REM, Stone Gossard from Pearl Jam, and Tift Merritt who spoke out publicly about the effects of radio consolidation on musicians.

Below you will find a summary of at least seven of the ways that we might turn this around. Don’t try to memorize the legal and legislative strategy, that’s not your job. Your job is to pay attention, to be optimistic, to tell your friends and to plug into the struggle when there is a call for bodies. In the short term, if you haven’t called your representatives to tell them that you are a voter who is against further media consolidation, let that be your first assignment.

What the FCC did on June 2

In early June, the FCC completed their congressionally mandated review of all existing media ownership rules. A deeply divided Commission voted 3-2 to relax many of the important rules, including:

1. increasing the percentage of television households any one company can reach through over-the-air channels from 35% to 45%, and
   
2. dramatically curtailing the existing limits on one company owning newspapers and broadcast properties in the same community.

Much to the chagrin of Clear Channel and other radio groups, the FCC did not raise the ownership caps dictating how many radio stations companies can own in local markets. This is generally regarded as a recognition that radio consolidation has gotten way out of hand. In fact, the FCC voted to use a new measure for assigning radio stations to specific markets, which was intended to clear up some anomalies that permit broadcasters to own multiple stations in certain small towns.

Even though the FCC did much less damage than they could have on the radio front, there are still some dramatic problems with their rule changes. Most importantly, they now want to count non-commercial stations along with commercial stations when totaling up how many stations are in a specific market. This artificially inflates the number of "competitive" stations in a given community, and will pave the way in dozens of markets to additional stations being purchased by companies who are at the existing local cap.


What everyone is doing in response to June 2

In many quarters, there is general consensus that both the FCC decision, and the process they went through to reach their decision, was completely lacking. A vast coalition of artist groups, consumer organizations, labor unions and others are working to overturn these rules, either through congressional intervention, litigation or by convincing the FCC to reconsider their decisions. The various industries that are impacted by these rules are also challenging different aspects of the decision.

From the standpoint of the music community, the most important immediate issues include addressing the impact of radio consolidation (including pay for play and the loss of local/independent voices on commercial radio); taking on Clear Channel's stranglehold on both radio and concert industries; and promoting strengthened non-commercial radio.

These issues are being addressed in a variety of ways in Congress:

1. There are a number of pieces of legislation that are moving through both the Senate and the House of Representatives that aim to roll back all or part of the FCC vote. The best bill is S 1046, which passed the Senate Commerce Committee several weeks ago and now has roughly 45 Senate co-sponsors (including 12 Republicans). This bill is important because it reinstates cross-ownership limits between TV and newspapers; clarifies that the FCC has the authority to "re-regulate" if it is in the public interest; mandates field hearings during ownership reviews; and forces divestiture of radio station clusters that exceed newly defined markets. We are hopeful that this bill will be brought to the Senate floor for a vote either later this week (which is unlikely) or in early September (after the August recess). You can find a list of co-sponsors of this bill here or by going to http://thomas.loc.gov and typing "S 1046" into the search field. Please note that as of right now the full text of this bill as amended by the Commerce Committee is not online.
   
2. Another initiative under way is something called the Congressional Review Act, which gives Congress the authority to "veto" a regulation from an independent agency like the FCC. Senator Byron Dorgan has garnered enough support from this colleagues that a floor vote is mandatory. If passed by both houses, the entire FCC decision will be thrown out and the FCC will have to start over.
   
3. Finally, the House of Representatives surprised many observers last week by passing (by a count of 400-21) appropriations legislation that included language that would roll back the FCC's efforts to lift the television caps from 45% to 35%. While this is not the most important issue by any stretch, it represents a somewhat shocking rebuke to the White House and Republican house leaders and is an indication of growing momentum to overturn other aspects of the FCC decision. The White House has threatened to veto this appropriations bill because of the FCC language, so a showdown is likely later this year.
   
4. The Senate Commerce Committee has held a series of hearings examining the question of consolidation in radio, cable and television. There is general consensus that radio is way out of control, with Clear Channel being a particular target of Senators like John McCain, Ernest Hollings, Frank Lautenberg, Byron Dorgan and Barbara Boxer. The CEO of Cumulus came under strong attack for his company's decision to ban the Dixie Chicks earlier this year. And many Senators have voiced their concerns about pay for play and a loss of localism. Senator McCain is discussing establishing a joint industry/artist working group to explore issues of ensuring access for independent artists on television; we are considering pushing for a similar working group to examine independence and localism on radio as well.
   
5. Both Senator McCain and FCC Commissioner Adelstein have expressed an interest in addressing once and for all the independent radio promotion/pay for play allegations. This could take the form of congressional hearings or an FCC investigation.
   
6. The Justice Department anti-trust chief testified last week that the Department of Justice is engaging in an on-going investigation of Clear Channel's activities. Given the close ties between the Bush White House and Clear Channel, it is unclear how effective this investigation will turn out to be.
   
7. Low Power Radio is reemerging as a political issue. In 2000, the National Association of Broadcasters helped push through legislation that took away the FCC's authority to change their signal interference protection rules in order to allow tiny microradio stations on their air in medium and large markets. Instead, the FCC was able to issue licenses in small towns pending a technical study and report to Congress. After two and a half years, there are nearly a thousand LPFM station either on the air now or in the process of getting their license. And the technical study, performed by MITRE and released two weeks ago, found (surprise, surprise) that the technology won't create the "oceans of interference" promised by the NAB. After a comment phase at the FCC, Congress will have to decide whether to re-authorize the FCC to allow LPFM stations in larger communities.
   

What happens next?

Congress will be out of session throughout much of August. This is a great opportunity to meet with your representatives or their staff to educate them about the competitive realities of the local music community and the importance of localism in radio. Most likely in September (and throughout the rest of 2003) these issues will be debated in Congress. It is likely at some point that there will be a showdown with President Bush, who backs the FCC's efforts to allow more media concentration. It is widely rumored that FCC Chairman Michael Powell will resign later this year, which would further shake up an already complicated situation.

Regardless, all of the upcoming scenarios have positive aspects. If we succeed in passing legislation, we can scale back the FCC's mistakes in tangible ways. If the legislation is blocked, it will be very, very clear who was responsible for blocking it and media concentration will be a key issue heading into the 2004 elections. The high profile surrounding radio consolidation will force broadcasters to not get greedy, and depending on the willingness of folks with direct knowledge of illegal industry practices to come forward we may be able to force specific policy changes. Finally, we hope to support the first wave of LPFM stations as they hit the airwaves and pave the way for full implementation of the service down the road.

There are a number of organizations folks can track for more constant updates and ideas for how to get involved, including (to name just a few) AFTRA, Prometheus Radio Project, Common Cause, and Media Access Project. You can also sign up for our newsletter at subscribe@futureofmusic.org -- we circulate somewhat comprehensive updates every few weeks.

Thanks to everyone for your ongoing support and interest.

For more information about these issues and how to take action, read the sidebar on this page. Thank you.

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