Music Streaming Bill Languishing in Senate

posted on 8.27.2018

- No Clear Path on FCC Ownership Review

Two months have passed since the Senate Judiciary Committee unanimously passed the Music Modernization Act but there’s still no indication when the Senate will vote on the bill. The measure includes significant reforms to songwriter compensation by on-demand streaming services, payments to pre-1972 recording artists and producer royalty shares. It also retains language relating to the ASCAP-BMI rate courts that NAB negotiated before it passed the House earlier this year on a vote of 415-0.

The Senate committee added at the NAB’s urging a section that establishes an enhanced oversight role for Congress in any Department of Justice review of the ASCAP and BMI consent decrees. While nothing in the bill prevents DOJ from undertaking any action relating to the decrees, the measure ensures an appropriate and clear oversight role for Congress in that review.

With election season in full swing the Senate is quickly running out of time to tackle this and other legislation, along with major appropriations bills, in the months remaining in the current session.

Pai Expected to Take Up Ownership Review in Fall
FCC Chairman Ajit Pai is expected to take up the commission’s quadrennial ownership review this fall but so far he does not appear to have set a clear path for the undertaking.

As a Commissioner, Pai strongly criticized his Democratic predecessors for not complying with the four-year review mandated in law. As Chairman he has taken action on the UHF discount and fielded proposals from TV groups and the NAB Radio Board which in June came down in favor of more consolidation in Radio ownership.

The NAB Radio Board recommendations, which did not garner unanimous support from its members, are based on market size:

• Largest 75 Markets:  Allow one entity to own up to eight FM stations in a market, allow ownership of up to two additional FM stations in a market for owners that incubate station ownership by new entrants into the industry, and completely disregard AM stations when calculating ownership concentration.
• All Other Markets:  Allow unlimited ownership.

In its arguments for the proposed changes the NAB Radio Board pointed to the extraordinary evolution in the media marketplace since 1996 when the current ownership rules were set and before Pandora, Spotify and YouTube arrived on the scene. Further, some industry researchers have found that more than half of all local advertising revenue, local Radio stations’ core revenue, is now being siphoned by digital entities like Facebook, Google and digital music subscription services.

As attorney David Oxenford with the Wilkinson Barker Knauer law firm has noted, proponents of greater diversity in Radio station ownership will argue that consolidation will hinder such opportunities. Still others will likely contend that consolidation since 1996 has led to some Radio groups to overextend themselves financially, rather than helping the overall economics of the industry.

A Notice of Proposed Rulemaking in the quadrennial ownership review is not anticipated for several months. Once issued, there will likely be a 60-day window for public comments followed by a period to allow for replies. No decision is likely until at least late 2019.

Oxenford’s Assessment of Changes in the Audio Marketplace

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

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