NJBA Weekly Newsletter Friday, July 9, 2010

It’s Nothin’ but a Heat Wave!

The East Coast heat wave isn’t just causing scattered power outages – the record-breaking heat is also having an impact on how FM radio signals make their way through the atmosphere. Inside Radio reports that it’s a common problem this time of year for FMs. While thunderstorms are the typical culprit for AMs in the summertime, engineers say the FM dial is susceptible to the hot, steamy weather that much of the country is suffering through this week.  It seems it’s the perfect recipe for an atmospheric condition known as tropospheric ducting.  In lay terms, it’s a condition that brings in distant signals that are sometimes strong enough to overwhelm local stations on the same channel. And, it’s not just the over-the-air signals that “trop” can wreak havoc with:  It’s also been known to disrupt studio-transmitter links. Stay tuned New Jersey, and stay cool!

Radio Show to Feature Integrated Educational and Networking Opportunities

This year's Radio Show, (September 29-October 1^st ) jointly produced by the Radio Advertising Bureau (RAB) and the National Association of Broadcasters (NAB), will feature a unique combination of educational and networking opportunities and offer an integrated conference experience with easy access to sessions and events. In addition to a collaborative programming lineup examining the key issues and innovations impacting broadcasters, the show will also introduce an all-new exhibitor Marketplace designed to complement a full schedule of engaging and interactive sessions.

August Recess - It's Almost Here!

It is that time of year again for August recess and district meetings. These dates are subject to change - especially for the Senate - but as of now, the House of Representatives will begin their August recess on July 30 and the Senate on August 13. It is later in the Senate due to the Supreme Court nomination hearings. The hope is they will wrap that up early and be out by August 6 instead. We encourage you to begin arranging meetings with your members of Congress in your districts or states. We need to defeat the toxic Performance Tax and your help is vital if we are to keep local New Jersey radio free!  Your outreach to members is essential to our success on Capitol Hill.

THE TRENTON REPORT: From the Marcus Group

No Rest for the Weary: As predicted in this space last week, the state Budget was enacted on time and largely reflected what Governor Christie proposed to the Legislature in March. Adoption of the budget traditionally triggers the Legislature's summer recess. But not this year. Governor Christie invoked a rarely used constitutional power of the Governor to compel the Senate and Assembly to meet daily in a Special Session to address his proposal to cap property taxes. The Governor was up against a July 7 deadline to place a tax cap amendment on the ballot for the voters this November. Legislative fireworks eclipsed real ones over the State Capitol this Independence Day. In the end, a compromised was reached and the State will move forward. 

So, how will the budget impact you and your business? The NJBIA tells us, well, it’s simple, for one of the few times this decade; you won't have to pay higher taxes to the State to balance the budget. Even though the State faced a whopping $11 billion budget deficit - the largest in New Jersey's history - Governor Christie steadfastly refused to increase taxes. The Governor proposed a budget that closes an $11 billion deficit by cutting spending, and the Legislature approved it with few changes. The Governor did not extend the 4 percent surcharge on the corporate tax, which expired on July 1. He also did not renew the expired one-year "temporary" tax that raised income tax rates for individuals, S corporations and partnerships that made more than $400,000. The Governor did not want to raise taxes on anybody, believing, as NJBIA does, that the budget had to be balanced by cutting spending, not by raising taxes in a weak economy.

Meanwhile, Governor Christie and the Legislature have reached a compromise on a proposal to place a cap on the annual rate of property increases in each town. While the last details are being finalized, legislators remain in Trenton beyond their usual summer recess date. And the hectic pace of activity in the State Capitol may continue beyond the cap debate. Governor Christie, cited the progress on the state budget and the property tax cap this week, saying "why would I take my foot of the accelerator now."  We look for more legislative proposals coming out this activist Governor almost on a daily basis.

White House Supports Spectrum Reallocation

The White House is announcing that it supports reallocation of spectrum for broadband services.  This is not certainly a surprise, but the most significant aspect of this announcement is that they are committing to find spectrum currently allocated to the federal government for this purpose.  It is also important that they are saying that some of the spectrum should be reallocated from the TV band, but on a voluntary basis.  While this is an official WH endorsement of the FCC's plan, it does not change the requirement for congressional action to implement incentive auctions.  NAB Spokesman Dennis Wharton commented that “Expanding broadband is important, and broadcasters will work constructively with policymakers to help them attain that objective. We appreciate FCC assurances that further reclamation of broadcast television spectrum will be completely voluntary, and we're convinced that America can have both the finest broadband and broadcasting system in the world without jeopardizing the future of free and local TV service to tens of millions of viewers. We also believe the first priority of Congress ought to be passage of spectrum inventory legislation that identifies fallow spectrum or companies that may be 'warehousing' the airwaves."

Format Changes and Creations in the Garden State

Buckley Radio and WOR started a Country music station called the Elephant last week, making this format more accessible to their audiences. Musically, WOR Country is more current than most Tri-State Country FMs traditionally had been. (Then again, the market’s nearest Country station, WKMK Monmouth/Ocean, N.J., is one of the most aggressive in the format.) And, in Atlantic City, the rock “Ace” WJSE (102.7) goes “Wild” under new calls of WWAC, as the latest rhythmic competitor at the Jersey Shore. Atlantic Broadcasting’s WJSE is also changing city of license from Petersburg, NJ to Ocean City, and increasing both power and height, though remaining a Class A in the crowded salty ether around Atlantic City.

As the calendar page turns to the second half of the year, the greatest advertising recovery rate has moved beyond the top ten and into the mid-sized and small markets.  This according to Inside radio, which reports that major markets are still up over last year, but the biggest momentum appears to have shifted downstream. Katz Media Group says third quarter national ads are pacing up 31% in markets 100+ — that’s twice the 15% growth rate seen in first and second quarter.  At the same time the top ten markets have seen national ad growth slow from 25% in first quarter to 15% in second quarter.  They’re now pacing up 13% in third quarter.  Katz says of the top 100 markets the one current pacing the highest is #71 Knoxville, up a whopping 140% over a year ago.  The crossover seems to have occurred in May.  Inside Radio’s most recent Insider Outlook survey of 50 markets showed in May revenues were up 7% in both small and large markets.

NJ Governor Meets with Royalty

Governor Chris Christie met with Queen Elizabeth II at ground zero in NYC this Tuesday. The 84-year-old monarch spent five hours in New York City where she placed a wreath in honor of the thousands who died there. Our Governor joined Mayor Bloomberg to welcome the Queen and probably offered her tickets to the Super Bowl. (Something Mayor Mike couldn’t do!) 

Rep. Scott Garrett's Star on the Rise

Rep. Scott Garrett literally had a seat at the table when a select House-Senate conference committee put the final touches on the Wall Street overhaul bill the House ultimately approved Wednesday. From that seat, Garrett was able to insert several provisions into the final package, including a new type of bank financing called covered bonds that he has championed for several years, but never could get to a vote.

Getting a pet project that neither house had approved into a conference bill that leaders of both houses want to pass is the ultimate Washington insider move. And Garrett did it as a junior lawmaker who built his career as an outsider. But Garrett, R-Wantage, did not change to move up in power. The Republicans around him did. Garrett signaled he would be a different kind of congressman on his first day in Washington in 2003, when he cast one of just four votes against an extension of unemployment benefits that sailed through both houses of a Republican-controlled Congress. On Thursday, by comparison, 142 House Republicans and 11 Democrats opposed another unemployment benefits extension. "He's gone from butting heads to being listened to," said Rep. Jeb Hensarling, R-Texas, who serves with Garrett on the House Financial Services Committee. “We are on a trajectory that we are not able to sustain," Garrett said. "I believe some change is needed. Seven years ago I felt that way and I continue to feel that way." "Like all of my colleagues, I believe financial reform is necessary now. But the legislation that's before us now … that empowers failed bureaucrats through government overreach and unnecessary job killing is just not the right legislation," he said. Congressman Garrett has also gone against his own party when he believes he is right. John Boehner had urged his Republican caucus to support the $700 billion bailout, and argued the vote "would separate the men from the boys." Garrett opposed Boehner and Bush on the $700mm bailout and, but rather than suffer any consequences, he leapfrogged more senior colleagues in 2009 to become the top-ranking Republican on the capital markets subcommittee. If the GOP takes back the House in November, Congressman Garrett is the odds-on favorite to hold the Chairman’s seat. (Herb Jackson and The Record)

Welcome Back Mr. Kaplan

NJBA pal Tom Taylor reported that Attorney Rick Kaplan moves from the office of FCC Commissioner Mignon Clyburn (as her chief of staff) to the 8th Floor Big Job of Chief Counsel and Senior Legal Advisor to Chairman Julius Genachowski. That puts Rick in the key policy coordination role among all the agency’s bureaus and offices, and he’ll have his finger on the important “wireless” agenda, as Genachowski keeps pushing for broadband. Kaplan joined the FCC in early 2009 to work on the DTV transition and built an interesting resume before that – he was in private legal practice at Sidley Austin, in the House of Representatives at the Office of the General Counsel, and as the owner of a “sports communications and management agency in New York” for seven years. He repped pro athletes, sports leagues and sports-related businesses. Kaplan succeeds Bruce Gottlieb, who’s leaving the agency in late July after 4-1/2 years. The NJBA wishes Rick well as he helps the Chairman and the FCC navigate these challenging times.

Offshore Drilling an Issue in N.J.  Congressional Race

As oil spews into the Gulf of Mexico from a blown-out well, candidates in New Jersey's most competitive congressional race are making offshore drilling an issue in the district that runs from the Atlantic Ocean to the Delaware River. And although as much as 100 million gallons of oil has spilled into the Gulf of Mexico, the chances of the slick reaching the Jersey Shore are remote, according to state environmental officials. Freshman Democratic U.S. Rep. John Adler, like most of the state's politicians, is against drilling off New Jersey's shore. But Republican nominee Jon Runyan, a former Eagles tackle, says he's in favor of drilling off the state's coast, as long as it can be done safely and New Jersey's residents pass a ballot question supporting it. (Burton, Inquirer) 

QuickNews is provided for general information purposes only and should not be relied upon as legal or tax advice pertaining to any specific factual situation. Legal and tax related decisions should be made only after proper consultation with a legal professional of your choosing.

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