From NashuaTelegraph.com

There’s a familiar, yet unexpected, face on the Telegraph’s weather page today: Al Kaprielian, whose quarter-century of quirky weather forecasts (“good e-e-e-evening!”) on Channel 50 made him a New Hampshire institution, is preparing to launch a new meteorology career online.

Al will be doing weathercasts for NashuaTelegraph.com each morning, Monday through Friday, via the magic of the Internet and at-home Web cams.

Today’s video is a sort of test run. Click on the link below to check it out, and come back on Tuesday (Monday is Memorial Day, after all) to see the real thing.

http://www.nashuatelegraph.com/weather/

How to Get Your Voicemails Returned with Dan O’Day
June 15th at 1pm EST
LBS Broadcast Sales Webinar

In this first of two June Broadcast Sales series webinars, Dan O’Day, Radio Sales Expert, teaches you how to leave voicemails that command the attention of your advertisers, instead of getting deleted.

To watch a preview video and register, visit:
http://bit.ly/LBSBroadcastSalesWebinar

And remember, even if you can’t watch live, all webinars are archived by the end of their broadcast day at  www.localbroadcastsales.com.

May 24 (Bloomberg) — Democrats in the U.S. House and Senate said they will consider proposals starting next month to update the law that has regulated telephone, cable and broadcast companies for the past 14 years.

The lawmakers will begin “a process to develop proposals” to revise the 1934 Communications Act, which was last rewritten by Congress in 1996, leaders of two committees said today in an e-mailed statement. Senator Jay Rockefeller of West Virginia, chairman of the Commerce Committee, and Representative Henry Waxman of California, chairman of the Energy and Commerce Committee, are starting the process, according to the statement.

A drive to rewrite the law in 2006 died in the Senate after Democrats objected that it lacked rules on net neutrality, which would bar Internet service providers from interfering with subscribers’ Web traffic.

Net neutrality has re-emerged as a policy issue. A U.S. court in April said the Federal Communications Commission lacks authority over Comcast Corp.’s Web practices, sparking debate over the agency’s power to regulate Internet service providers.

“We applaud the congressional leadership call for proposals to update the communications act,” said Walter McCormick Jr., president of US Telecom, in an e-mailed statement. Members of the Washington-based trade group include the largest U.S. telephone companies AT&T Inc. and Verizon Communications Inc.

The commission declined to comment on the Rockefeller and Waxman statement, Jen Howard, an FCC spokeswoman, said in an e- mail.

FCC Authority

FCC Chairman Julius Genachowski on May 6 claimed authority under a part of the act written for telephone networks. Republican lawmakers said he improperly sought to expand regulation.

Today, 74 House Democrats told Genachowski in a letter that they have “serious concerns” about his proposed regulatory framework and urged him to await “direction from Congress.” Separately, 37 of the 41 Senate Republican members in a letter today urged Genachowski to “abandon” his proposal.

Genachowski in a blog posting on May 6 said the agency was ready to advise Congress if its “leaders decide to take up legislation” to “clarify the statute and the agency’s authority.”

Efforts in Congress can be “complementary to the efforts of the FCC, not a substitute for them,” said Whitney Smith, a spokeswoman for Senator John Kerry, a Massachusetts Democrat, in an e-mailed statement.

“It is time to engage in a methodical and thoughtful process to update our communications laws,” Smith said.

After seven wonderful years, I am leaving bGG Advertising  and in turn, the NHAB and moving on to other opportunities far away from the New England winters to reside in Hawaii. It has been an absolute pleasure getting to know the dedicated and talented broadcasters of this state and working on your behalf. I want to thank you for your continued support over the last two years after the passing of our former president, Al Sprague. Despite that immense loss and the difficult time our industry faced with a struggling economy and shift in Washington DC administration, your Association continues to be a vital organization with a strong Board of Directors and a committed member base.

I am pleased to introduce to you Jordan Walton, a hard-working broadcaster, who will join the Association management team at bGG Advertising and serve as the Executive Director of the NHAB. Jordan most recently served as an Account Executive for Steven Silberberg’s Northeast Broadcasting – a group of stations that borders New Hampshire and Massachusetts. Prior to that, he was a Marketing Consultant for Nassau Broadcasting in New Hampshire as well as on-air talent for two of their stations. With an innovative and creative approach, a proven track record of exemplary client service and sales, and keen sense of political awareness, Jordan will serve the broadcasters in New Hampshire with energy and purpose. His attention to detail and strong understanding of the broadcasting industry makes him the perfect candidate to for the daily management of the Association while his experience in sales, promotional and social media campaigns brings an opportunity to expand the NCSA programs and keep the organizations vital and growing. A media studies and political science major, Jordan received his degree from Sacred Heart University in Connecticut. Jordan is a Nashua, NH native and resides in Tilton with his wife and son.

For the past 20 years, the staff at bGG Advertising has worked hard on the daily management of your Association and will continue to ensure member stations are equipped with the resources they need. We welcome your feedback.

Jordan can be reached at jordan@nhab.org or 603-627-9600. You can also always contact Jennifer Ramsell in our office at jramsell@bggadvertising.com or 603-627-9600.

I thank you again for the opportunity to work with each and every one of you and look forward to the great things to come in the Association’s future.

- Deanna Raymond

-From Inside Radio

There’s no cease-fire, but talk of a royalty compromise grows louder with some broadcasters now believing a deal could be worked out to the industry’s benefit. They say it could settle several pending issues with the record labels, ASCAP and BMI.

NAB president/CEO Gordon Smith told Inside Radio last month he’s fighting the performance royalty battle on two fronts: lobbying on Capitol Hill to defeat the Performance Rights Act while simultaneously having conversations with the RIAA about a potential compromise. Last week, Emmis Communications CEO Jeff Smulyan said he would support diverting to labels and artists a slice of royalties that radio already pays to songwriters as part of “a global settlement.” While Smulyan is the first to voice such an opinion, he’s apparently not a lone wolf. “A number of us have been talking about this, that we’ve been overpaying ASCAP and BMI and maybe there’s a germ of a solution in bringing them all together,” he tells Inside Radio. A “deal we can live with” would save the radio industry millions of dollars in lobbying fees, Smulyan notes. “It takes up a lot of political capital.”

But other group heads steadfastly oppose any compromise. As face-to-face meetings between the two industries continue, several different potential solutions have moved on and off the table. They include reshuffling streaming royalties to a song-tagging revenue share to ways the relationship between the two industries can be strengthened. While the tenor of dialogue has come a long way from the “I’d rather slit my throat than negotiate” stance of Smith predecessor David Rehr, it’s unclear if a compromise will be struck.

Sources says there have been five to six face-to-face discussions with both parties developing a greater understanding of the other’s concerns and objectives than before the PRA was first introduced. “It’s no secret that key members of Congress have asked the NAB and the RIAA to have talks but the NAB remains unalterably opposed to the bill that was passed out of the House and Senate judiciary committees,” NAB EVP Dennis Wharton says.

MusicFirst spokesman Marty Machowsky says: “We support creation of a performance right on radio that is fair to artists, musicians and rights holders, fair to other radio platforms that already pay a performance royalty, and fair to radio.”

From Curtis Barry, The Dupont Group for the NHAB

NHAB is concerned not only for member businesses but the well-being of our advertisers and business communities.  We welcome any feedback you wish to provide on your behalf or theirs.

Much has been discussed and reported in the news media since October about the so-called “LLC Tax” and the grass-roots movement it has spawned.  In the background, however, has been an issue that has in recent months made its way to the surface where it had been bubbling beneath, unseen by most.  That is the concept of ‘reasonable compensation”. This is related to the LLC tax and in fact is one of the drivers of the cost of this new application of the New Hampshire “Interest & Dividends” (I&D) tax.

Background

Reasonable Compensation – Around  2004 – 20005, businesses reported that the New Hampshire Department of Revenue Administration (NHDRA) had launched a campaign of aggressive audits and was strictly enforcing the State’s reasonable compensation law for Business Profits Tax purposes (NH RSA 77-A:4 III).  This law allows “a deduction equal to a fair and reasonable compensation for the personal services of the proprietor or partners who actually devote time and effort in the operation of the business organization” from the business’ revenue.  The current State law allows a “safe harbor” amount of $6,000, meaning that any compensation above that amount must be reported and that the burden of justification falls on the business owner.  Accountants and tax attorneys have reported that the recent number of audits performed by NH DRA, in a single year, are multiple times what they were seeing in a multi-year time period before 2004.  

Since that time DRA has launched an aggressive effort to strictly, and some feel unfairly, apply the standard to business owners, allowing less in compensation and therefore deeming more business revenue as “profit” and taxable for BPT purposes.  The difference in taxation is a .75% rate for wages under the Business Enterprise Tax (BET) and 8.5% under the BPT – a difference of 7.75%, or $775.00 in additional taxes for each $10,000 in question.  Efforts have been made over the past two years to clarify “reasonable compensation” and legislators have been asked to take into account what running a small business is all about, rather than have bureaucrats attempt to pigeon-hole owners into “employee” categories.

LLCs and the Interest & Dividends Tax – In June 2009, during State budget deliberations, the Legislature and Governor extended the “Interest and Dividends (I&D) Tax” to Limited Liability Company (LLC) distributions, which had previously not been taxed via the I&D tax.  Some LLC distributions were subject to the Business Profits Tax (BPT).   LLC owners who take distributions as their income are also subject to the “reasonable compensation” standard, as are owners of partnerships and proprietorships.  Therefore, any amount of that compensation deemed by  NHDRA auditors as not meeting the test of reasonable compensation are deemed taxable profits, and the distributions are taxable dividends.  Because this change in State tax law took place in calendar year 2009, the new law applied to all of 2009, making it – in spirit anyway – retroactive. 

Impact of Audits on Small Business

This issue is replete with anecdotes of business owners who face a situation of a tax obligation of a few thousand Dollars  vs. a legal battle with NHDRA that will cost multiple times what they owe in taxes.  The decision is an easy one – pay the tax.  This scenario has been described by legislators at legislative hearings, including accountants and tax attorneys describing real-life situations faced by their clients.

Proposed Legislation

(Legislation still alive marked by ***)

NHAB has monitored the various bills introduced in the NH Senate and House on this subject.  We purposefully watched as each made its way through, listened to testimony, and have assessed the legislative proposals that have made it past the “Final Four”.  We’re left with two proposals, and members must take some time to assess each so that NHAB can take formal, proactive positions on the subject.

*** HB 1607, relative to the reasonable compensation deduction under the business profits tax, sponsored by Rep. Susan Almy, the Chair of the House Ways & Means Committee.  This bill seeks to change the State’s “reasonable compensation” law in response to business’ and legislators’ concerns.  As passed by the House (with an amendment recommended by the Majority of the House Ways & Means Committee), the bill has three key components:

• Increases the safe harbor level to $50,000;
• Requires the NHDRA to “apply the principles, standards, and factors that are applicable to the tax structure of the state of New Hampshire which emanate from Internal Revenue Code section 162(a)(1), and relevant Treasury regulations, rulings by the Internal Revenue Service, federal court decisions, and United States Tax Court decisions” when determining whether or not the compensation is “reasonable”; and,
• Maintains the current law’s requirement that the burden of proof that the compensation is “reasonable” lies with the business owner.

This bill also contains a study committee on the subject.  The bill was passed by the House primarily along party lines.

HB 1661, making distributions from limited liability companies, partnerships, and associations subject to the interest and dividends tax only if they have transferable shares.  Sponsored by Rep. David Hess and two other House Republicans, this bill would effectively repeal the extension of the I&D tax to LLCs.  Despite recent news reports indicating that the Governor and some legislative leaders now are looking at a repeal, this bill was sent to “Interim Study”, in essence killing the bill for this year. The vote on this bill was also along party lines.

SB 476, clarifying the business profits tax deduction for reasonable compensation, sponsored by Sen. Jeb Bradley and seven other Republican Senators and five Republican House Members.  The bill only requires proof that the owner has performed personal services in the business and allows that “Once a taxpayer has satisfied this burden of proof, the amount claimed as a deduction shall be presumed to be reasonable, unless the commissioner proves by a preponderance of the evidence that the deduction claimed by the taxpayer is grossly excessive”.  This bill would properly move the burden of proof from the business owner to the State.  While Senate Republicans favored this approach, Senate Democrats, in the Majority, favored the D’Allesandro approach.  This bill was laid on the table in the Senate and can be used at a later date as a vehicle if  more legislative changes are needed.

*** SB 497, changing the business profits tax deduction for reasonable compensation for partnerships, limited liability companies, and sole proprietorships and modifying the interest and dividends tax statute to follow the definitions of interest and dividends used in the United States Internal Revenue Code, sponsored by Sen. Lou D’Allesandro (D), Sen. Bob Odell (R), Rep. David Campbell (D), and Rep. Doug Scamman (R).  This bill was passed unanimously by the Senate with amendments. As passed, it  includes one safe harbor tied to anticipated investment returns; in other words, the business owner is entitled to compensation in an amount equal to what an “independent investor” would expect, based upon the business’s total capital.  A second safe harbor, “amounts of gross business profits that are reported by proprietors, partners, or members as ‘net earnings from self-employment’ within the meaning of section 1402(a) of the United States Revenue Code”.  The bill also modifies the interest and dividends tax statute to follow the definitions of interest and dividends used in the United States Internal Revenue Code.  A second safe harbor, “amounts of gross business profits that are reported by proprietors, partners, or members as ‘net earnings from self-employment’ within the meaning of section 1402(a) of the United States Revenue Code” was removed from the bill by the Senate.  Only one “safe harbor”, that referring to the “independent investor return amount” was left in.

As work on these bills came to a head in their originating bodies, Governor Lynch in early March publicly called for the repeal of the “LLC Tax”.  This late move must be viewed as at least partially political given the firestorm the issue has generated in the small business community.  A proposal to repeal this new law was delayed in the House.  Addressing the “LCC Tax” without fixing the “reasonable compensation” issue may relieve the political pressure to the point that there is no pressure left to appropriately work on the latter.

Our quick views comparing HB 1607 and SB 497:

• SB 497’s language is more complex than that of HB 1607.
• SB 497 requires the business “to substantiate that the proprietor or at least one partner or member performed personal services for the business organization”, a lesser requirement than HB 1607’s, which states “The business organization shall bear the burden of proof in demonstrating the reasonableness of any compensation deduction taken under this paragraph.”
• The safe harbor under SB 497 is not limited, whereas the safe harbor under HB 1607 is.
• The safe harbor under SB 497 is capped as it is tied to the aggregate “capital account” on the organization’s federal tax return.
• The removal of this second safe harbor may be a drastic change and important to NHAB members to whom this applies.

Follow the links to read the text of each bill:

HB 1607, relative to the reasonable compensation deduction under the business profits tax

SB 497, changing the business profits tax deduction for reasonable compensation for partnerships, limited liability companies, and sole proprietorships and modifying the interest and dividends tax statute to follow the definitions of interest and dividends used in the United States Internal Revenue Code

As the broadcast industry continues to evolve, sales training has never been more important. Why not carve out 2 minutes in your weekly sales meeting for some targeted training from LocalBroadcastSales.com?  It’s FREE to NHAB members!

This week Stephen Warley gives tips on targeting museums

http://www.localbroadcastsales.com/pages/articles-items/niche-verticals-museums583.php

And don’t forget LBS’ next webinar on June 8^th at 1PM: Online Video Advertising: It’s More Than Just Pre-Rolls

Learn more at:  http://bit.ly/LBSDigitalSalesWebinar

As always, webinars are archived for use at another time. 

Contact Jordan Walton at the New Hampshire Association of Broadcasters at jordan@nhab.org to get started with your username and password.

Meeting will be broadcast live on www.fcc.gov/live:

Washington, D.C. – The Federal Communications Commission’s (FCC’s) Public Safety and Homeland Security Bureau (PSHSB) and the Federal Emergency Management Agency’s (FEMA’s) National Continuity Programs (NCP) today announced they will hold a workshop on 21st Century Emergency Alerting: Leveraging Multiple Technologies to Bring Alerts and Warnings to the Public. The workshop will be held on Thursday, June 10, 2010, from 9:00 a.m. to 1:00 p.m. in the Commission Meeting Room (TW-C305).

The workshop will highlight the status of and relevant details related to the Integrated Public Alert and Warning System, including the Next Generation Emergency Alert System (EAS) and the Commercial Mobile Alert System. This public meeting will also provide FEMA, the FCC and other Federal partners an opportunity to gather feedback on outstanding issues related to these systems, the upcoming National EAS test, and the FCC’s upcoming inquiry proceeding on next generation alerting.

The workshop will be open to the public; however, registration will be limited to the seating available. Those individuals who are interested in attending the forum may pre-register on-line at http://www.fcc.gov/pshs/event-registration.html. Those who pre-register will be asked to provide their name, title, organization affiliation, and contact information. Individuals may also contact Deandrea Wilson at Deandrea.Wilson@fcc.gov or 202-418-0703 regarding pre-registration. The deadline for pre-registration is Tuesday, June 8, 2010.
Audio/Video coverage of the meeting will be broadcast live with open captioning over the Internet from the FCC’s web page at www.fcc.gov/live. The FCC’s web cast is free to the public and does not require pre-registration. Reasonable accommodations for persons with disabilities are available upon request. Please include a description of the accommodation you will need. Individuals making such requests must include their contact information should FCC staff need to contact them for more information. Requests should be made as early as possible. Please send an e-mail to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau: 202-418-0530 (voice), 202-418-0432 (TTY).
For additional information about the meeting, please contact Susan McLean by email: Susan.McLean@fcc.gov or by phone: 202-418-7868.

The New Hampshire Association of Broadcasters has signed on, along with the other fifty states, to a resolution in opposition to any new “performance tax.”  The full text of the resolution can be read below.

The resolution was sent to Senator Gregg and Senator Shaheen’s offices.

RESOLUTION OF THE FIFTY STATE BROADCASTERS ASSOCIATIONS, INCLUDING THE DISTRICT OF COLUMBIA AND THE COMMONWEALTH OF PUERTO RICO, IN OPPOSITION TO A NEW “PERFORMANCE TAX”

WHEREAS, the recording industry wants Congress to mandate, for the first time ever, a public performance obligation for the over-the-air broadcast of recorded music delivered, free of charge, to the listening public by our Nation’s local radio stations so that the recording industry can extract from such stations billions of dollars on top of the wealth already enjoyed by the record labels and their performers;

WHEREAS, this proposed, public performance obligation is regarded by local radio stations as the equivalent of a Congressionally mandated “performance tax” proposed for the sole benefit of the recording industry;

WHEREAS, local radio stations already contribute as much as $2.4 billion in value annually to the record labels and their performers by promoting their recorded music, their concerts, their merchandise and their careers to an average of 239 million listeners per week;

WHEREAS, the “performance tax” will (i) undermine radio broadcasting’s first-responder, lifeline, alerting and informational role in every community in America, and (ii) frustrate the goal of increasing program diversity as well as minority and female ownership in broadcasting by:

a. Forcing local radio stations that have already cut their operating expenses to the bone either to change from a music to a talk format in order to avoid foreclosure and going dark;

b. Forcing local radio stations that must remain music-based to survive, to further reduce news departments, eliminate even more jobs, reduce their hours of operation or air less costly syndicated programming in lieu more expensive locally originated programming; 

c. Forcing local radio stations to abandon niche music formats in favor of formats that appeal to the largest audiences with the greatest revenue generating potential, thereby reducing program diversity and narrowing the opportunities for new artists through free airplay; and

d.   Imposing a new, unbudgeted operating cost that could place many local radio broadcasters in breach of their financing covenants and thus in default under their loans, and that could prevent newcomers to broadcasting from being able to obtain financing;

WHEREAS, the record labels and performers possess no equitable justifications for placing at such substantial risk both our Nation’s commitment to competition and diversity in broadcasting as well as our Nation’s local, first responder radio stations:

a. The record labels and performers have repeatedly admitted how critical local radio stations are to the welfare of the recording industry and their performers:

“If a song’s not on the radio, it’ll never sell.” – Mark Wright, Senior Vice President, MCA Records, 2001   “It is clearly the number one way that we’re getting our music exposed. Nothing else affects retail sales the way terrestrial radio does.” – Tom Biery, Senior Vice President for Promotion, Warner Bros. Records, 2005.

See Attachment A hereto for more testimonials confirming the extraordinary value  contributed by local radio stations to the recording industry;

            b. Congress has looked at the issue of performance fees at least three times previously (1971, 1976 and 1995) and concluded that such fees would jeopardize “the mutually beneficial economic relationship between the recording and traditional broadcast industries” (House Report 104-274, 1995); and

            c. The record labels and their performers do not need a government “bailout” at the expense of local radio stations. In fact, the U.S. recording industry, with no “performance tax,” is larger than that of the United Kingdom, France, Germany, Canada, Australia, Italy, Spain and Mexico combined, all of which have “performance tax” regimes; and

            d.  Furthermore, there are no pools of funding at radio stations to draw from to pay these “performance taxes.”

WHEREAS, there are no public policy justifications that would support placing at such substantial risk our Nation’s commitment to competition and diversity in broadcasting and our Nation’s local first responder radio stations:

a. The fact that music license fees are paid to ASCAP, BMI and SESAC by local radio stations does not justify a “performance tax” for the recording industry because the composers are generally not promoted whereas local radio stations routinely promote performers by name, as well as their songs, concerts, and merchandise to the great advantage of performers;

b. The fact that fees are paid by subscription-based technologies, such as satellite and Internet radio, to the record labels and performers does not justify a “performance tax” on local radio stations because (i) as Congress has itself found Internet and satellite radio providers threaten the sales of recorded music through digital downloading whereas local radio stations enhance sales without posing such a threat, and (ii) subscribers actually pay those providers for the recorded music delivered into their homes, offices and vehicles; in contrast, local radio stations air the music for free; and

c. The fact that some foreign countries acknowledge a performance right in the over-the-air broadcast of recorded music does not justify a new “performance tax” on local radio stations in the United States because

            (i) performance fees in foreign countries actually benefit government-owned stations to the detriment of privately-owned stations (the former enjoy increasing government subsidies while the latter do not enjoy any subsidies) and have resulted in fewer radio stations (less outlet diversity) and fewer distinct formats (less content diversity);

            (ii) “performance tax” revenues from radio stations in foreign countries are disproportionately allocated to record labels and highly-successful artists; and

            (iii) the subject of performance rights cannot be properly evaluated without taking into account other related issues, e.g., durations of copyright protections (95 years in the U.S. and only 50 years in Canada and many European and Asian countries) and piracy enforcement; and

WHEREAS, targeting local radio stations with a “performance tax” would violate principles of fundamental fairness without (i) including the numerous other businesses which use recorded music for their customers and (ii) taking into account the one-half billion dollars paid annually by local radio stations to composers (and an increasing number of performers) and music publishers through ASCAP, BMI and SESAC:

a. The recording industry is using a divide and conquer approach for its legislative strategy that leaves out other businesses, such as bars, restaurants and hotels, which, under the recording industry’s own logic, should contribute their share to any “performance tax” pool sought by the recording industry;

b. Without all potential contributors included, it would be impossible to determine the reasonableness of the “performance tax” pool sought by the recording industry or a fair allocation of liability among contributors; and

c. Since the value of the work of a performer is inextricably intertwined with the value of the work of the composer whose work is being performed, logically their relative worth in relation to a performance should be examined with the effect that compensation under music licenses should be re-examined in connection with any compensation that would flow from a “performance tax” if such tax were imposed.

Resolved this 20th day of May, 2010, by the fifty (50) State Broadcasters Associations named below, including the District of Columbia and the Commonwealth of Puerto Rico, That Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings.

Alabama Broadcasters Association, Alaska Broadcasters Association, Arizona Broadcasters Association, Arkansas Broadcasters Association, California Broadcasters Association, Colorado Broadcasters Association, Connecticut Broadcasters Association, Florida Association of Broadcasters, Georgia Association of Broadcasters, Hawaii Association of Broadcasters, Idaho State Broadcasters Association, Illinois Broadcasters Association, Indiana Broadcasters Association, Iowa Broadcasters Association, Kansas Association of Broadcasters, Kentucky Broadcasters Association, Louisiana Association of Broadcasters, Maine Association of Broadcasters, MD/DC/DE Broadcasters Association, Massachusetts Broadcasters Association, Michigan Association of Broadcasters, Minnesota Broadcasters Association, Mississippi Association of Broadcasters, Missouri Broadcasters Association, Montana Broadcasters Association, Nebraska Broadcasters Association, Nevada Broadcasters Association, New Hampshire Association of Broadcasters, New Jersey Broadcasters Association, New Mexico Broadcasters Association, The New York State Broadcasters Association, Inc., North Carolina Association of Broadcasters, North Dakota Broadcasters Association, Ohio Association of Broadcasters, Oklahoma Association of Broadcasters, Oregon Association of Broadcasters, Pennsylvania Association of Broadcasters, Radio Broadcasters Association of Puerto Rico, Rhode Island Broadcasters Association, South Carolina Broadcasters Association, South Dakota Broadcasters Association, Tennessee Association of Broadcasters, Texas Association of Broadcasters, Utah Broadcasters Association, Vermont Association of Broadcasters, Virginia Association of Broadcasters, Washington State Association of Broadcasters, West Virginia Broadcasters Association, Wisconsin Broadcasters Association, and Wyoming Association of Broadcasters.

Attachment A to State Broadcasters Associations Resolution

Recording Industry “Testimonials” That Demonstrate Local Radio’s Indispensable Role and Substantial Contribution to the Success of the Record Labels and their Performers

“I love a strong radio hit. All of us. That’s what our job is, to have a radio hit. Without radio, we couldn’t do what we do, but the job is to have a radio hit that sounds unique, and like you.” – Jewel, Grammy-nominated recording artist, ‘Nashville Star,’ July 2008 “Alright, let’s talk about the nuts and bolts. If you win ‘Nashville Star’, you have to get on 200 major market radio stations. You have to.” – John Rich, Big and Rich, ‘Nashville Star,’ July 2008

“I have to thank… every DJ, every radio guy, every promotions guy, everybody who ever put up a poster for me and spread the word.”

– Alicia Keys, recording artist and Grammy winner, 2008 Grammy Awards, February 2008

“[R]adio remains the best way to get new music into the listeners’ lives.”

–Sony BMG Executive VP Butch Waugh as quoted in Radio & Records, January 11, 2008

“[R]adio is the conduit to the people, the voice of the format and the lifestyle’s soundtrack.

–Sony BMG Nashville VP of Marketing Tom Baldrica, as quoted in Radio & Records, January 11, 2009

“Obviously, radio is probably the most important thing for a new rock band coming out. If you don’t get yourself on the radio, then you won’t draw bodies at the clubs and you won’t sell records.”

– ‘Another Animal’ drummer Shannon Larkin, Drum Magazine, 2008

“Country radio, thank you so much for being our mouthpiece. You know what we do means nothing if it never gets played, and no one gets to hear it.”

– ‘Rascal Flatts,’ Vocal Group of the Year, Country Music Awards, 2007

“I can’t even believe that this is real… I want to thank country radio. I’ll never forget the chance you took on me.”

– Taylor Swift, Horizon Award (for best new artist), Country Music Awards, 2007

“I have yet to see the big reaction you want to see to a hit until it goes on the radio. I’m a big, big fan of radio.”

–Richard Palmese, Executive Vice President of Promotion, RCA, 2007

“To the fans, thank y’all for accepting me. And most importantly, to country radio, you took a chance on a pop singer from Charleston, S.C., and God bless y’all for that.”

– Darius Rucker, 2009 CMA Award winner for ‘New Artist of the Year,’ November 2009

“[T]he primary function of a record label’s promotion department is to secure radio airplay for its artists. … Our partnership with radio is paramount to breaking new acts, as well as keeping superstar artists in the eyes and ears of their fans and the music buying public.”

– RCA Senior Vice President Peter Gray, as quoted in OnMilwaukee.com, August 2009

“Radio is still the leading force of determining what songs and artists break through.”

– Clive Davis, Sony Music’s chief creative officer, as quoted in USA Today, June 2009

“The first nine years was one thing — before we got on the radio, which was a miracle. It was never meant to happen. And then the second half was really a big blur of amazement.”

– Gwen Stefani, as quoted on E! Entertainment Television’s “The Daily 10,” May 19, 2009

“You can’t take being played on the radio for granted. There are only so many spots and many great singers out there wanting one. It’s a jungle out there.”

– George Strait, as quoted in Radio & Records, April 3, 2009

“It’s worth remembering that U2, you know we broke in the United States through Boston and through radio stations like BCN and stuff like that. We depend on radio.”

– Bono, referring to Boston radio station WBCN, in an interview a WHDH-TV Boston news reporter, March 2009

“I have so many friends out there. I think back over the years now, and it’s amazing how much of my life has been impacted by radio people.”

– Brad Paisley, speaking during an interview with Radio Ink’s Brida Connolly, February 2009

“Let me tell you four letters that mean a whole lot to me. Four letters that have changed the course of my career. Four letters out of 26. W-Y-C-D.”

– John Rich, Big and Rich, speaking on stage during the station’s “Ten Man Jam” concert, February 2009

“Thank You Radio!! 4 Grammy Awards Last Night!!!”

– Lil Wayne in an email sent to radio stations across the country the day after he received four Grammy Awards, February 9, 2009

“Radio has proven itself time and time again to be the biggest vehicle to expose new music.”

– Ken Lane, Senior Vice President for Promotion, Island Def Jam Music Group, 2005

“It is clearly the number one way that we’re getting our music exposed. Nothing else affects retail sales the way terrestrial radio does.”

–Tom Biery, Senior Vice President for Promotion, Warner Bros. Records, 2005

“That’s the most important thing for a label, getting your records played.”

– Eddie Daye, recording artist, 2003

“Radio helped me a lot. That’s the audience. I can’t see them, but I know they’re there. I can’t reach out and touch them with my hand, but I know they’re there.”

– B.B. King, recording artist, 2002

“If a song’s not on the radio, it’ll never sell.”

– Mark Wright, Senior Vice President, MCA Records, 2001

“Air play is king. They play the record, it sells. If they don’t, it’s dead in the water.”

– Jim Mazza, President, Dreamcatcher Entertainment, 1999

“I am so grateful to radio. Their support has truly changed my life, and I hope they know how appreciative I am for that.”

– Jo Dee Messina, recording artist, 1999

Yesterday, the New Hampshire Association of Broadcasters joined with many other State Broadcasters Associations in vigorously opposing the rulemaking effort by a number of cable and satellite television operators and others to persuade the FCC to radically change, through governmental fiat, the negotiating dynamics of the Congressionally-mandated, market-driven negotiating process by which television stations exercise their must carry/retransmission consent rights.  We pointed out that, not surprisingly, the MVPDs want the FCC to change those dynamics in ways that will benefit them, and severely prejudice the television broadcast industry, in all future retransmission consent (“RTC”) negotiations.

The Associations stressed that the Petitioners are urging the FCC to grant every MVPD mandatory interim carriage—the equivalent of a “compulsory signal carriage license”—in circumstances where an MVPD and a television station are unable, for any reason, to reach agreement on the terms and conditions of a renewed or extended retransmission consent agreement before expiration/termination of the then current RTC agreement.  Under such “license,” the MVPD would have the right to continue carrying the station’s signal (and thus all of its programming), on the frozen terms and conditions of the former RTC agreement for as long as it took the FCC, and presumably the courts, to finally decide if one of the parties had acted in bad faith.  During that period, the television station could not charge the MVPD additional consideration for the right to retransmit the station’s signal even if the station, as is likely, was incurring higher and higher programming acquisition costs.  Such “licenses” would be automatically available to any MVPD that took the position that it was negotiating in good faith and would last as long as it took the FCC and the courts to decide if that was true.

        The Associations demonstrated that neither the Communications Act nor the Copyright Act grants the FCC the statutory authority to impose either mandatory interim signal carriage or arbitration in connection with must carry or retransmission consent negotiations.  The Commission has repeatedly acknowledged that fact.  For good reason, a change in the law is not warranted.  We showed that adoption of the Petitioners’ proposals would lead to (i) substantially fewer mutually successful, timely RTC negotiations; (ii) substantially more FCC-based litigation; (iii) the loss of RTC-related compensation that television stations need to continue to produce and otherwise acquire increasingly expensive and responsive local, syndicated, and network informational and entertainment programming, including sports and other types of compelling programming; (iv) a weakening in the ability of television stations to compete and survive against the combined subscription/advertising-based model of cable and satellite MVPDs; and (v) as a  result of the diminished capacity of the television broadcast industry to compete vigorously in the marketplace for programming, an acceleration in the already strong trend of sports and other types of compelling programming migrating from free local over-the-air television to pay TV. 

The Associations also asserted that informed subscribers, not governmental intervention, is the only lawful and otherwise appropriate way to address potential MVPD service disruptions of the type complained of by the Petitioners.  Their wails of distress on behalf of MVPD subscribers are no more than cries of self-interest from MVPDs more worried about losing subscribers to over-the-air viewing or to competing MVPD providers than about arming their subscribers with timely information about RTC negotiations and informing those subscribers of their options for ensuring they will be unaffected by the MVPD’s loss of a particular station’s programming.  We pointed out that MVPDs are in the best position to eliminate subscriber uncertainty by beginning RTC negotiations well in advance of the RTC expiration date and by providing their subscribers with timely and truly helpful information the subscribers can use to prepare to implement an over-the-air antenna option and/or switch to an alternate MVPD provider if they wish.  In short, we make clear that if subscribers face programming disruption, it is caused by deliberate decisions on the part of MVPDs to keep their subscribers in the dark during negotiations, and not by television stations exercising their statutory rights in those negotiations.

In concluding, the Associations urged that, as the Petitioners have failed to demonstrate any need to “fix” the current retransmission consent process, much less addressed the harm that their proposals would create, the rulemaking sought by the Petitioners should not proceed, and their petition should be dismissed or denied in its entirety.