TAB Presses Lame Duck Congress on Performance Tax, Big Tech Competition

posted on 11.28.2022

- Weeks Left for Bills that Hurt, Help Broadcasters

As Congress returns to DC for its “lame duck” session ending late December, TAB is weighing in with key members of the Texas congressional delegation on two distinct measures that could have a huge impact on broadcasters if passed – one helpful, the other devastating.

Performance Tax Teed Up Next Week

Next week, the House Judiciary Committee is slated to take up the so-called “American Music Fairness Act”, HR 4130, which would levy a new Performance Tax on local Radio stations for yet another music royalty. 

This would be in addition to the hundreds of millions of dollars in music royalties that stations across the country already collectively pay.

Artist royalties continue to soar with the addition of GMR to the ranks of performance rights organizations like ASCAP, BMI and SESAC, just as a historic increase in streaming royalties collected by SoundExchange has further strained local stations’ operations.
 
Despite NAB’s repeated invitations to work with record labels on a holistic review of the music licensing regime, the record labels have yet to engage with the industry.

The five Texans serving on the Judiciary Committee are listed below. 

• Rep. Veronica Escobar, D-El Paso
• Rep. Sylvia Garcia, D-Houston
• Rep. Louie Gohmert, R-Tyler
• Rep. Sheila Jackson Lee, D-Houston
• Rep. Chip Roy, R-Central Texas

TAB has secured the most co-sponsors of any state for “The Local Radio Freedom Act”, HConRes 33, which opposes a Performance Tax, and the Radio-friendly measure enjoys the bipartisan support of a majority of House members.

While prospects for the AMFA bill are tentative – it has not yet been heard in Senate committee, a necessary step in the process – the typical legislative crush at the end of a lame duck session makes it imperative that broadcasters weigh in directly with their House members.

Big Tech Competition

Senate leadership is in a position to pass legislation already approved by a key committee that would level the playing field between news content publishers and Big Tech firms. The House version could be up for consideration in the same House Judiciary Committee hearing noted above.

The Journalism Competition and Preservation Act, S. 673/ H.R. 1735, would create a temporary antitrust exemption to allow local broadcasters and certain other digital publishers to jointly negotiate with a dominant online platform regarding access to their content.

U.S. Sen. Ted Cruz, R-Texas, played a key role in negotiating an amendment he attached to the Senate bill and helping advance the measure with strong bipartisan support from the powerful Senate Judiciary Committee in September for a full Senate floor vote.

As revised, the JCPA would:

• Empower eligible digital journalism providers—that is, news publishers with fewer than 1,500 exclusive full-time employees and non-network news broadcasters that engage in standard newsgathering practices—to form joint negotiation entities to collectively negotiate with a covered platform over the terms and conditions of the covered platform’s access to digital news content.
• Require covered platforms—which are online platforms that have at least 50 million U.S.-based users or subscribers and are owned or controlled by a person that has either net annual sales or market capitalization greater than $550 billion or at least 1 billion worldwide monthly active users—to negotiate in good faith with the eligible news organizations.
• Enable non-broadcaster news publishers to demand final-offer arbitration if their joint negotiation with a covered platform fails to result in an agreement after six months.
• Create a limited safe harbor from federal and state antitrust laws for eligible digital journalism providers that allows them to participate in joint negotiations and arbitration and, as part of those negotiations, to jointly withhold their content from a covered platform.
• Prohibit discrimination by a joint negotiation entity or a covered platform against an eligible digital journalism provider based on its size or the view expressed in its content and provide a private right of action for violations of this prohibition.
• Prohibit retaliation by a covered platform against eligible digital journalism providers for participating in joint negotiations or arbitration and provide a private right of action for violations of this prohibition.
• Sunset within eight years. 

While Democrats retained control of the upper chamber after the mid-term General Election, Republicans won the House where they’ll take control in January.

That makes the remaining month of the current session the best opportunity to pass this measure as incoming House Judiciary Committee Chairman Jim Jordan, R-Ohio, is on record opposing the measure.

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

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