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Federal Issues Summary (May 2010)

Questions? Contact TAB's Oscar Rodriguez or call (512) 322-9944.

Marketing & Advertising Restrictions

Two financial reform bills moving through Congress could greatly restrict marketing and advertising, with serious implications for broadcasters.

Both would allow the Federal Trade Commission or the proposed new Consumer Financial Protection Bureau to impose huge monetary penalties on broadcasters for carrying commercial advertisements that either agency subsequently deems unfair or deceptive.

This legislation would also make it much easier for the FTC to issue new rules - virtually unchecked – that define and restrict unfair and deceptive advertising for a broad range of products and services.

Provisions like these will put a chill, if not a freeze, on a whole range of advertising that will ultimately further starve broadcasters of the needed revenues to support news operations, public service initiatives and programs that are vital to fulfilling our obligation to serve local communities.

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>LUR for Political Ads

Legislation seeking to reduce the impact of a recent Supreme Court decision overturning prohibitions on corporate spending on political ads would, for the first time, expand lowest unit rate requirements beyond candidates to political parties and committees.

The bill also would extend up to 180 days the political window for LUR, require that federal campaign ads be non-preemptible and impose new compliance and reporting burdens on stations.

Broadcasters are rightly concerned these provisions will crowd out small business advertisers and state and local candidates who are not entitled to the right of access enjoyed by federal candidates.

TAB has serious First Amendment concerns about this proposal and is urging Congress not to mandate additional price reductions that could disadvantage business and other advertisers key to driving the economy and fostering local civic discourse.

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Satellite TV

On May 12, Congress finally passed a five-year reauthorization of the TV satellite bill, now called the Satellite Television Extension and Localism Act. TAB was key to fending off attempts by Senators in neighboring states to modify DMAs that cross state lines and are dominated by Texas stations.

We worked closely with Sens. Hutchison and Cornyn to preserve existing DMAs. The Senators and their staff were wholly committed to our concerns and we are greatly appreciative of their leadership.

Because of the delay in passing the extension, the bill was tweaked to address the multicast dates as follows:

  • Network affiliated multicast stations existing as of March 31, 2010 (previously Dec. 31, 2009) are protected from duplicating distant network signals for subscribers signed up after Sept. 30, 2010 (previously June 30, 2010).
  • Network affiliated multicast stations commencing after March 31, 2010, but before Dec. 31, 2010, are protected from duplicating distant network signals for subscribers signed up after Dec. 31, 2010.

Treatment of network affiliated multicast stations commencing after Dec. 31, 2010, stays the same and those stations will obtain immediate protection from duplicating distant network signals for all subscribers signed up after they commence broadcasting.

President Obama has not yet signed the bill.

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Retransmission Consent

TAB is urging the FCC to reject a proposal by the cable industry to undermine broadcasters’ retransmission consent rights in a joint filing with most other state broadcast associations.

We’re also continuing to educate lawmakers about the fact that the system is working as intended, with private parties negotiating these agreements and that negotiations rarely stall to the point that broadcast signals are pulled from pay-TV subscribers.

Claims by the pay-TV industry that retransmission consent fees are causing subscription fees to skyrocket are also unfounded – the data clearly show that such fees make up a small fraction of programming costs, which are rising slower than pay-TV’s revenues.

A cost study was commissioned by the NAB and submitted to the FCC May 6.

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Talking Points View Cost Study

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Performance Tax

Congressional opposition to a Performance Tax on radio broadcasters continues to grow, despite generally supportive comments uttered last month by Speaker of the House Nancy Pelosi, D-Cal.

While Pelosi intimated at a Capitol Hill gathering of record label artists that she looked forward to equal royalty treatment for all artists, her staff says she is not calling for a vote on the bill or pushing for more negotiations.

All eyes are on the appropriations committees now as lawmakers near the point of approving must-pass spending bills to which a Performance Tax could be added.

Committee leaders in the House and Senate have voiced their opposition to such a tactic, but we remain vigilant and NAB is monitoring the process very closely.

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Talking Points Position Spreadsheet

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