Congress Takes Up Journalism Competition, Performance Tax

posted on 2.07.2022

- Hearings on Both Key Measures Explore Concerns

Texas broadcasters’ primary congressional policy interests were the subject of dueling House and Senate committee hearings on Feb. 2, just ahead of the ice storm that swept much of the state. Lawmakers in both hearings probed arguments for and against both measures, with some expressing more than a little uncertainty about broadcasters’ claims.

Journalism Competition and Preservation Act

The Senate Judiciary Antitrust Subcommittee, chaired by Sen. Amy Klobuchar, D-Minn., and co-author of the proposed Act, led a broad discussion of the harm that anticompetitive practices by Big Tech companies are doing to local broadcast and newspaper journalism.

The measure would create an anti-trust exemption to allow traditional media companies to collectively negotiate rates for how Big Tech platforms use their content.

Journalism advocates testified that Big Tech platforms are growing their business by using journalistic content without adequate consideration, jeopardizing the viability of local media outlets.

Several subcommittee members – all Democrats – lauded the importance of local newspapers and broadcasters, citing their critical value to local communities.

Others expressed skepticism of the Act in its current form, with Sen. Mike Lee, R-Utah, suggesting the JCPA would create a “cartel” of “Big Media” conglomerates that could be biased against conservatives, a concern echoed by his GOP colleague Marsha Blackburn of Tennessee.

Lee also suggested the economic challenges facing local journalism stem more from bad internal business decisions than to predatory practices by Big Tech platforms, but he indicated that he might be able to support a more narrowly structured bill.

Witnesses for Big Tech expressed concern that the proposed legislation could infringe on “fair use” rights and would benefit large media companies more than small ones.

A revised bill draft under development could be released soon if House and Senate sponsors reach agreement, either as a stand-alone bill or part of a more expansive measure containing Big Tech antitrust provisions.

Performance Tax

The House Judiciary Committee, led by Rep. Jerry Nadler, D-New York, held a full hearing of the American Music Fairness Act (AMFA), which is being advanced by the international record labels and would create a performance tax on local Radio broadcasters.

The line-up of witnesses reflected the chairman’s support for the measure, with only NAB President/CEO Curtis LeGeyt invited to speak on broadcasters’ concerns, while three other witnesses advanced record labels’ interests.  

Lawmakers’ questions focused on discounted rates for “small” stations, artists’ property rights, streaming royalties and collection of foreign royalties owed to American artists.

Regarding the promotional value of broadcast Radio, witnesses argued it has diminished over time and is not a substitute for royalty payments.

Only two of the five Texans serving on the committee spoke up. Rep. Sylvia Garcia, D-Houston, primarily expressed concern that small Spanish-language stations be protected, while Rep. Sheila Jackson-Lee, also a Houston Democrat, offered comments advancing the record labels’ arguments.

The outlook for this legislation is uncertain. While the committee clearly is stacked in favor of the record labels, the measure has 32 co-sponsors, including Rep. Michael McCaul, R-Austin/Houston.

This compares to HConRes 33, the Local Radio Freedom Act which opposes a performance tax and has the support of 210 members of the House, just eight shy of a majority.

Texas leads the country in the number of co-sponsors of the Local Radio Freedom Act. 

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

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