Broadcasters Policy Agenda. 115th Congress

Broadcasters Policy Agenda 115th Congress

Broadcasters Policy Agenda 115th Congress Local television and radio stations are an integral part of their communities. We turn on the TV or radio to find out what the weather is like before heading to work, to catch our favorite sporting event, to hear new music and watch the shows we love, or to keep safe during emergencies. When we want to know what s going on in our part of the world, from objective and trusted sources, we know our local stations will always be there for us, reporting the facts and sharing the information we seek. Broadcasters are always at our fingertips on laptops, smartphones and digital dashboards and continually strive to make their signals available on every device at every location. In an ever-changing media landscape, we can count on broadcasters unbreakable commitment to upholding our nation s democratic ideals the freedom of speech and of the press. Local TV and radio stations also make a valuable economic impact on cities and towns across the country, supporting more than 2.49 million American jobs and generating $1.19 trillion annually for the nation s economy. No other medium connects us to our communities and to each other like broadcast TV and radio. And nobody provides the local news, shows, music and emergency information live and free to all Americans like your local stations. As the voice of local radio and TV stations in Washington, D.C., the National Association of Broadcasters is proud to advocate on the issues that affect stations ability to innovate and serve their listeners and viewers your constituents. We are pleased to share this report with you, which provides an overview of some of the key policy issues broadcasters we will be focused on during the 115th Congress. Gordon H. Smith NAB President and CEO

Unleashing the Next Generation of Broadcast Television for Viewers The next generation of broadcast television technology will deliver lifesaving advanced emergency alerting, stunning pictures, customizable and immersive audio and improved reception available for free to enhance and expand the broadcast viewing experience. Because the new technology combines the best of broadcast television and broadband, Next Gen TV allows local stations to better personalize their broadcasts with information and interactive features to give viewers the content most relevant to them. Next Gen TV also supports enhanced mobile reception, so viewers can access unlimited live local and national news, the most popular sports and entertainment programs and children s shows on mobile devices over-the-air without relying on cellular data services. That means viewers won t run through their data caps and there s no monthly fee broadcast TV is free. The only thing that stands between viewers and this new enhanced free service is government action. Unlike other competitive services, local stations can only begin broadcasting in the Next Gen TV standard after approval by the Federal Communications Commission (FCC). The National Association of Broadcasters, Consumer Technology Association, America s Public Television Stations and the Advanced Warning and Response Network Alliance joined together to ask the FCC to allow TV stations and manufacturers to voluntarily adopt Next Gen TV. Unleashing the next generation of free broadcast television service requires no additional spectrum and no government subsidies; it simply allows television stations to voluntarily invest in enhanced technology to provide better services for free to all viewers. Broadcasters urge Congress to ask the FCC to move quickly to allow stations to invest in innovation that benefits their viewers. Broadcast news remains the #1 source for news and information, outpacing other platforms.

Growing Businesses and Preserving Jobs Through Local Advertising For many small retailers, local television and radio are the best ways to reach their customers and grow their businesses. Making advertising more expensive by changing its tax treatment would hamper the growth of these businesses and the jobs they support in local communities. An estimated $1 trillion in U.S. economic output and 1.38 million jobs are attributable to the stimulating effects of advertising on local television and radio. 1 Tax changes that make it more expensive for businesses to advertise would not only hurt local businesses, but impede the ability of TV and radio stations to offer the high-quality news, information and entertainment on which the public relies. The local broadcast radio and television industry contributes $1.19 trillion of gross domestic product and 2.49 million jobs to the American economy annually. 2 By 2019, advertising is projected to support 23.2 million U.S. jobs and $7.4 trillion in U.S. output. 3 Broadcasters and their small business partners will advocate to ensure advertising remains fully deductible as an ordinary and necessary business expense in the year the expense is incurred. Any legislation that discourages advertising would hurt local businesses and harm broadcasters ability to serve their local communities. 1 Source: Woods and Poole Economics, Local Broadcasting: An Engine for Economic Growth, 2015 2 Source: Woods and Poole Economics, Local Broadcasting: An Engine for Economic Growth, 2015 3 Source: IHS Economics and Country Risk, The Economic Impact of Advertising in the United States: March 2015 $1 trillion in U.S. economic output and 1.38 million jobs are attributable to the stimulating effects of advertising on local television and radio.

Recognizing Radio s Vital Role in Local Communities Whether in a car, at work or at the gym, 268 million Americans turn to local radio each week to get the news, information and music they want all for free. And when disaster strikes, listeners turn to their local stations first to get the emergency updates that keep them safe. For more than 80 years, record labels and performers have thrived from radio airplay which is essentially free advertising from local radio stations. Local radio stations provide record labels with free promotion worth as much as $2.4 billion annually. But as the foreign-owned record label conglomerates struggle to adapt to a competitive media landscape, they continue to aggressively lobby for a new performance tax on local radio stations simply for airing and promoting artists music. A performance tax would financially hurt local stations and jobs, potentially forcing some stations off the air. It would also reduce the amount of music radio stations play and harm new artists trying to start careers. Small and minority-owned stations would be especially impacted by this legislation that would funnel money out of local communities to huge off-shore companies. In previous Congresses, broadcasters worked with the record labels to try to resolve the performance tax issue through good faith private discussions. Yet, the big record labels advocacy group rejected compromise and walked away from negotiations. Since that time, numerous radio companies and record labels have negotiated private deals of their own that compensate copyright owners and performers, demonstrating the ability of the marketplace to best address the issue. In the 114th Congress, more than 250 legislators including a bipartisan majority in the House supported the Local Radio Freedom Act. This legislation recognizes the important role stations play in their local communities and opposes any new performance fee, tax, royalty or other charge on local radio stations. Broadcasters ask Congress to continue to stand up for local radio listeners by cosponsoring the Local Radio Freedom Act and stop the foreign-owned record labels attempts to impose a new tax on local radio stations. More than 250 bipartisan legislators cosponsored the Local Radio Freedom Act in the 114th Congress.

Ensuring Viewers Access to Free, Local Television From local weather and traffic reports to the highest-rated network shows, Americans rely on local TV stations for the most trusted news and highest-rated entertainment, all for free. In fact, 70 million Americans rely on an antenna to get their local channels and do not subscribe to a cable or satellite service. As authorized by Congress, the FCC is undertaking an unprecedented auction of the television airwaves. During this process, local TV stations are incentivized to give up their channels to be auctioned to wireless companies. In turn, these stations will share in some of the auction proceeds. At the conclusion of the auction, the FCC will relocate the remaining TV stations including those that did not volunteer to participate in the auction moving their channel assignments. This is the same process that occurred when TV stations transitioned to all-digital broadcasting in 2009 (the DTV transition), but this time, stations will not have a second channel to ensure continuity of service to viewers. When a station is forced to move to a new channel assignment, it faces a number of technical challenges and resource constraints that are not under its control. To prevent harm to stations and their viewers, Congress authorized $1.75 billion in the Television Broadcaster Relocation Fund to cover the reasonable costs necessary to relocate broadcasters following the auction. Since that time, the FCC has pursued an aggressive relocation plan likely to cost significantly more than envisioned by Congress. The FCC has also, entirely on its own, adopted a rigid and inflexible deadline by which stations must cease operating on their old channels, regardless of whether they have been able to complete their relocation. Local stations should not be forced to foot the bill for expenses that Congress did not intend and many stations cannot afford. Stations also should not be forced off the air due to unachievable relocation deadlines that deny viewers the important local news and information on which they depend. Broadcasters will advocate for legislation that ensures viewers uninterrupted access to their local TV stations during the relocation of stations. Broadcasters support legislation that ensures stations choosing not to participate in the incentive auction will not be forced to cover costs or go dark as the result of inadequate flexibility in the relocation fund and FCC deadlines. 70 million Americans rely on broadcast television through an antenna.

Fostering a Competitive Media Marketplace Local TV and radio stations are best able to serve their communities when they are allowed to compete on a level playing field in the digital media marketplace. Unfortunately, outdated broadcast ownership regulations dating back to the 1970s could hurt local stations ability to fairly compete and serve their audiences. The communications ecosystem dramatically changed with the proliferation of new video and audio services and the advent of the internet. With the explosion of new media sources, such as social media, blogs and websites, outdated restrictions from the last century are not needed to ensure diverse points of view. Restrictions adopted in 1975 preventing common ownership of a printed (but not an online) newspaper and even a single local radio or TV station in the same market, for example, are unnecessary and anticompetitive, as are rules strictly limiting the ownership of TV stations in local markets. Modernizing these outdated restrictions would help ensure local stations continued economic vibrancy, which is critical to their ability to serve their communities in an increasingly competitive media landscape. In 2016, the FCC decided on a party-line vote to retain all of its existing broadcast ownership rules, even those dating back to the mid-1970s before the explosion of multichannel and digital media. Broadcasters and many policymakers agreed this decision ignored new technologies and marketplace realities, and were based on the outdated premise that broadcasters only compete against one another for audiences and advertising. Today s ownership rules apply significant regulatory burdens on broadcast stations, but not their direct competitors. Ironically, the FCC has allowed megamergers in the cable and satellite industry, but has held local stations hostage under decades-old, outdated rules. Broadcasters urge Congress to support efforts to modernize ownership rules to account for the rise, and increasing influence, of digital and other forms of media, and foster competition in the communications ecosystem. Rules from 1975 ignore the rise of new media platforms and hamstring local broadcast stations.

Allowing Broadcasters to Continue Negotiating in the Free Market Broadcasters create and deliver the most compelling and popular programming on television 95 percent of the highest-rated primetime shows are on local channels. Broadcast content provides real value to cable and satellite companies, which negotiate with broadcasters for the right to resell their signals in a process known as retransmission consent. In 1992, Congress granted retransmission consent in legislation intended to curb excessive cable rate increases while promoting competition in the video marketplace. Prior to this, cable operators used broadcast signals without stations consent and resold those signals to their subscribers, making millions. Today, local stations and cable and satellite providers hold private, market-based negotiations that provide incentives for both parties to come to mutually beneficial arrangements. Stations reinvest the revenue provided by these negotiations into valued programming. Broadcasters strongly oppose government intervention that would upend the retransmission consent system solely for the benefit of the big cable and satellite companies. The negotiation process is fair and market-driven. Eliminating stations ability to negotiate for the value of their signals would mean less choice for viewers and fewer resources for stations to dedicate to local news and sports, public affairs programming, coverage of emergency weather events and community activities. In fact, Congress in 2014 directed the FCC to review the retransmission consent negotiation process. Following a thorough review, the FCC in 2016 determined that no changes were needed to the rules requiring both broadcasters and pay-tv providers to negotiate in good faith. Broadcasters will continue to advocate for policies that promote stations ability to conduct private, marketdriven negotiations with cable and satellite companies free from unnecessary government intervention. Some cable and satellite companies have aggressively lobbied to restrict broadcasters ability to freely negotiate for retransmission consent, instead seeking to establish an intrusive government role in the marketplace. These big pay-tv companies unfairly blame retransmission consent for higher consumer prices, while at the same time recording billions in record profits year after year. The truth is, cable bills have risen faster than sometimes double the rate of inflation since the mid-1990s, long before broadcasters received cash compensation for their signals. Broadcast TV shows dominate primetime ratings, representing 95 of the top 100 shows

Providing More Choice for Listeners Through Streaming Local radio stations are innovating to expand access to their on-air programming on new platforms, providing the best experience for listeners when and where they want it. In addition to music, local radio stations provide their listeners with important local news, sports, weather, traffic and community information, as well as emergency alerts. Broadcasters want listeners to have access to this critical information on every device, everywhere they are. While emerging technologies create new opportunities for radio stations to serve their listeners, many stations still do not stream their programs over the internet due to onerous recordkeeping and reporting requirements and the high cost of royalty rates. This is especially true for smaller stations. Broadcasters were pleased that in 2015 the Copyright Royalty Board (CRB) acknowledged that royalty rates needed to be reduced to encourage streaming and lowered rates for stations. While these new rates represent a step in the right direction, the cost and burdensome administrative requirements still prove prohibitive for many broadcasters. Broadcasters urge Congress to ensure fair streaming rates and regulations that benefit artists and listeners by incentivizing more radio stations to stream. 268 million people listen to radio each week in the U.S.

115th Congress Broadcasters Policy Agenda Broadcasters unshakeable commitment to serving their communities compels them to keep innovating so that local stations can be everywhere their viewers and listeners are. In the 115th Congress, broadcasters look forward to working with legislators on policies that strengthen their ability to compete in the media and telecommunications ecosystem, allowing them to better serve their communities. For more information on the issues that affect local radio and television stations, please contact the National Association of Broadcasters advocacy team. Contact Us (800) 424-8806 advocacy@nab.org nab.org/advocacy facebook.com/broadcasters @nabtweets

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