WASHINGTON -- NAB Radio Board Chair Russ Withers, owner of Withers Broadcasting Companies, testified today before the Senate Commerce Committee hearing regarding the future of radio. Following is a transcript of the prepared oral testimony.
Good morning Chairman Inouye, Vice-Chairman Stevens and members of the Committee. My name is Russ Withers and I am the owner of Withers Broadcasting Companies, which operates 30 local radio stations and six television stations in seven states, including Missouri and West Virginia. I am testifying on behalf of the National Association of Broadcasters, where I serve as chairman of the NAB Radio Board and a member of the Executive Committee.
Radio's future is very bright, and I will offer perspective today from over 50 years working in radio on a variety of issues, among them low power FM (LPFM), media ownership, and copyright fees.
First, with respect to LPFM, broadcasters strongly support the current 3rd adjacent channel protection and have serious concerns with introducing thousands of micro-radio stations to the FM band. Broadcasters do not oppose licensing LPFMs. In fact, the FCC has authorized 811 LPFM operators. Others have received construction permits or have applications pending at the FCC, and we encourage the Commission to act on these within the existing policy. LPFM stations exist today within 3rd adjacent protection for a reason - to guard against interference to both LPFMs and full power stations.
With respect to media ownership, let me also be clear: broadcasters are not asking for total deregulation. Our message is simple: we must have reasonable rules that reflect the current competitive radio environment. With reasonable rules we can have a vibrant industry that will continue to provide the service our local communities expect - whether that is lifeline service in times of emergency or entertainment and informational programming everyday.
Some will argue that the changes to the broadcast ownership rules adopted in the '96 telecom act have not served the public interest. But, they forget that at least part of the reason that you here in Congress directed the FCC to make those changes was because the fragmented broadcast industry - particularly for radio - was in serious trouble. In the early 1990's the FCC reported that more than half of all stations were losing money and almost 300 stations had gone silent. You can't serve the public interest with no service.
Since 1996, however, numerous studies have shown that the changes within local broadcast markets, especially among radio stations, have enhanced the diversity of programming offered by local stations. And, another study demonstrated, that localism is still alive and well despite the rule changes.
There are more radio stations today in the United States than at any time in our history. Despite claims that the radio industry has been swallowed up by a few corporate giants, there are more than 4,490 different owners of the approximately 13,500 full power stations in this country. And, according to the FCC, more that 6,498 of those are locally owned.
I can assure you that I and my fellow radio broadcasters are on the job every day serving and contributing to our communities. You need only look at the California wildfires as evidence of our commitment. We need reasonable ownership rules to allow us to keep providing that service.
Turning now to the issue of copyright fees, the NAB supports legislation to vacate the Copyright Royalty Board (CRB) decision and to establish new rates for Internet streaming of music. The CRB decision earlier this year causes serious harm in two ways. First, the cost for radio stations to stream music will drastically increase. Two, the new CRB rates are a barrier to entry for many stations that want to be part of the Internet revolution. We support a new and fair rate structure that encourages Internet streaming. We have made attempts to work with the recording industry to reach compromise, and were left waiting 92 days for an answer. As a result of their stonewalling, we all face a very uncertain future for what was becoming a growing and exciting platform for music.
Lastly, Mr. Chairman, I want to address the issue of performance fees, and the attempts by the recording industry to impose what broadcasters consider to be a "performance tax" on local radio. Local radio and the recording industry have always enjoyed a mutually beneficial relationship that can be distilled down to one concept: free music for free promotion. Local radio offers the recording industry a listening audience of 232 million listeners a week to promote and expose music that drives consumers to go buy music, attend concerts, and purchase artist merchandise.
Now, with slowing sales and arguably a flawed business model for the digital age, the recording industry is looking to recoup their waning revenues through a performance tax on local radio broadcasters. Local radio, however, is not the reason the recording industry is suffering from declining profits, and local radio should not be used as a bail-out fund.
Radio broadcasters will fight this tax to preserve a local radio system that remains free, essential, and available to all consumers.
Thank you for inviting me here today and I look forward to your questions.
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The National Association of Broadcasters is a trade association that advocates on behalf of more than 8,300 free, local radio and television stations and also broadcast networks before Congress, the Federal Communications Commission and the Courts. Information about NAB can be found at www.nab.org.