NJBA Weekly Newsletter for Friday, April 9, 2010

Meet Me in Atlantic City June 7^th & 8^th

Let the Broadcaster games begin! The 2010 Mid-Atlantic Broadcasters Conference is less than two months away. This year’s theme is: “One to Everyone!”, celebrating the important and unique role Broadcasters powerfully play in all of our daily lives.  Look for your entry form in the mail for the “Best of the Best” Awards contest. Categories include: “Best Commercial”, “Best News”, Best Public Affairs and “Best Promotion”.  Make sure your station is in the running for these prestigious NJBA awards.  Also announced were the following scholarship programs:  Millennium Radio will award the Erik Van Ness Scholarship, Greater Media will award the Anthony V. Marano Scholarship and a special NJBA Memorial Scholarship will be awarded to broadcast majors in New Jersey in honor of former NJBA Chairman Don Brooks.  Student applications for these scholarships are also being accepted.  Please contact the NJBA Office with your questions.  We’re looking forward to a great reunion and we can’t wait to see you in Atlantic City!  

Commerce Department Betrays Broadcasters

The U.S. Department of Commerce has sent a letter in support of a performance royalty on broadcast radio to Senate Judiciary Committee Chairman Patrick Leahy (D-VT), who co-sponsored the Performance Rights Act. The letter came from Leahy’s attorney, Cameron Kerry (Senator John Kerry’s brother) who says there is a “strong support” for eliminating the exemption currently held by terrestrial broadcasters. Kerry calls it “a matter of fundamental fairness to performers” that would “provide a level playing field for all broadcasters” whether they’re on-air, satellite or online.   He could not have been more wrong. This is a disingenuous comparison of broadcast radio to internet providers and pay/subscription audio entertainment programming and fees paid by satellite radio. The proponents of this legislation want us all to be alike, but we should reflect on this offensive language. We are not alike!  Free over-the-air radio & television are the only exclusively local media that exists! We are licensed separately and differently; we have a very different mission, mainly to operate in the public interest from the EAS for local emergency notification such as NJ Amber Alerts and community wide emergencies such as forest fires, hurricanes, blizzards, and other extreme weather hazards, and flash flooding, to local news of community events and happenings in entertainment from our great and diverse variety of formats. Compared to free radio’s more than 235 million listeners in the United States alone, satellite and   subscription services reach less than 10% of radio’s ever expanding and diverse listening base.  And it’s free! Think about how many people in today’s economy can afford to pay to hear radio in the first place. The National Association of Broadcasters says it wasn’t surprised by the letter, which is similar to a position taken by the Bush administration. 

Prior to the release of the letter, the NAB met with the Department of Commerce staff to ensure their awareness of the vast congressional opposition to the proposed legislation.  Additionally, the staff was advised of the negative consequences to those in the radio broadcasting industry and the communities they serve. NAB EVP Dennis Wharton says, “We’re disappointed the Commerce Department would embrace legislation that would kill jobs in the U.S. and send hundreds of millions of dollars to foreign record labels that have historically exploited artists whose careers were nurtured by American radio stations.” By the way, if anyone wants to see the effects of wrongheaded Performance fees, just look at the recent 30%+ increase in satellite’s monthly subscription fees, and the “going dark” of some radio stations’ streaming audio on the net, due largely in part to the ever-increasing royalties charged to stream content. And to lie to rest the specious argument that the performing artists will get any money from the new Performance Tax, all you need to do is review the typical recording contract any new artist is “forced” to sign if they want to get their coveted “record deal”. It often provides for very little compensation to flow to the artist after record production and promotion costs are re-cooped.

Need More Proof That the Performance Tax is a Big Fat Lie?

Just look at the latest lawsuit springing from the Performance Rights Royalty owed artists in England. EMI was recently sued by the Doobie Brothers for royalties allegedly owed them. London-based (Ah, that would be a foreign owned) recording giant EMI's North American operation is being sued for non-payment of royalties by Bluewater Music Services, which supervises royalty payments to songwriters. The lawsuit alleges that the record company didn't pay royalties to music writers on a group of songs that were used in compilation albums and as ringtones. NJBA Board Member Dick Taylor rightfully argues “So why would anyone think they would have their artists’ best intentions at heart by pushing a performance tax?  They don't.  FREE over-the-air exposure on America's radio stations actually does more for recording artists than any system ever devised.”  Well said!  Support your favorite emerging recording artists by your continuing support of the Local Radio Freedom Act.  It's a Win-Win. Always was. And always will be.

Another Tax?

Yep! And this one could really put the final nail in our economy’s coffin. Broadcasters next year may face the potential loss of advertising revenue if taxes on ads and ad services are enacted, industry lobbyists said in a recent information session. "Anybody who is buying on a regional or national basis is going to pull a fair amount of money out of those states and put it in other states where they are going to get better value for their advertising dollar," said Clark Rector, the AAF's executive vice president. The NJBA will be monitoring this job destroying prospect with great interest.

Lowest Unit Rate Opens April 24th

Later this month, the Lowest Unit Rate advertisement window opens. April 24^th is the first day of the Lowest Unit Rate Period for the Congressional primaries to be held in New Jersey on June 8^th. Please make sure to alert your stations of this important regulatory date. See more April filing and regulatory deadlines below.

NJBA Endorses Alert FM’S Push for Cell Phone Radio

The New Jersey has joined in the support of ALERT FM, the FM radio-based personal alerting and messaging system from Global Security Systems (GSS).   Using the existing FM data subcarrier known as Radio Data Service (RDS), ALERT FM delivers emergency alert messages to any electronic device with an FM receiver, including those that are wireless or mobile. “In any emergency, FM radio’s ubiquitous single-point to multi-point transmission assures the delivery of critical information to an infinite number of FM-enabled devices simultaneously -- a huge advantage over wireless broad band’s point-to-point system which overloads and jams in that scenario,” noted Paul Rotella, President and Chief Executive Officer, New Jersey Broadcasters Association.   “Expanding the availability of FM on a variety of devices and implementing ALERT FM at local radio stations will save more lives.” Alert FM has the backing of the NAB and several other state broadcaster associations including the NJBA.

Alert FM sends emergency alerts to any device with the receiver chip.  “We’re working to get FM chips in all phones and consumer devices,” Alert FM COO TJ Lambert says.  More than $150 million has been spent so far developing and introducing Alert FM. The RDBS-based emergency alert system would target cell phones and other FM-enabled devices.  It will not only help the public, but also radio in its quest to get FM on more mobile phones.    Stations get full control and can transmit information like song title and artist or advertiser messages during the vast majority of time alerts aren’t being sent. Lambert says, “We can’t touch it for commercial interests.” Lambert believes as more stations and states embrace the technology, federal officials will see FM as a critical EAS link.  “That gets FM chips in phones quicker,” he says. When Congress passed the Warning Alert and Response Network (WARN) Act four years ago, it left the job of figuring out how to get emergency alerts into mobile phones up to the FCC.  Estimates are more than 700 million cell phones worldwide have FM, but only a handful of models sold in the U.S. feature radio.  Many in Congress believe putting FM receiver chips into cell phones is the best EAS option, and 60 lawmakers sent a letter to FCC chairman Julius Genachowski last September urging he look more closely at the possibility.  “Radio’s EAS is a proven, reliable service,” they wrote.  But the FCC has been reluctant to put the mandate on cell phone companies even though it’s estimated to cost just three cents per handset to add FM capabilities. The RDBS-based emergency alert system would target cell phones and other FM-enabled devices.  It will not only help the public, but also radio in its quest to get FM on more mobile phones. If you have FM radio on your cell phone, you’re walking around with a device that can be alerted 24-7.

Save the Date for Free EEO Webinar

Many members have raised significant questions regarding a broadcaster’s on-going Equal Employment Opportunity obligations. Accordingly, the NJBA, in conjunction with the MAB, will be hosting an EEO webcast with Davis, Wright, Tremaine’s Brendan Holland on May 11^th for our Members. (This is a paid member benefit.)  Here are more details: It’s called “Navigating the FCC’s Equal Employment Opportunity Rules” and is set for Tuesday, May 11, 2010 starting at 1PM. More details will be forthcoming in future editions of QuickNews.

The Trenton Report: From The Marcus Group

It’ The Budget, Stupid!

In the 1992 Presidential campaign the phrase, "It's the economy, stupid" entered our political vocabulary. Bill Clinton was challenging the first President Bush and this slogan was plastered about his campaign headquarters. It was the theme of the campaign and a signal of the importance of message discipline both in campaigning and governing. 

Our new Governor Chris Christie is following the same disciplined path by keeping the public debate focused on the plight of the state budget. This week in Trenton the Senate and Assembly Budget Committees kicked off two months of hearings with every member of Governor Christie's cabinet testifying on the impacts of dwindling state resources upon their department's core mission and how they will cut staff and services to meet those budgetary limitations.

Also, this week the New Jersey Privatization Task Force created by Governor Christie begins hearings on what state services might better be funded and delivered by the private sector. Former Congressman Dick Zimmer is chairing this group. Governor Christie has charged them with coming up with $100M in savings for the state budget. Zimmer is taking a broad view of potentials for privatization: "If it is listed in the Yellow Pages, it is a candidate for privatization."

The Legislature and Governor have a constitutional deadline to enact a balanced state budget by June 30 and this one should go down to the wire.

NJ Has Low Response to Census 

The AP reports that U.S. Census Bureau officials are concerned because fewer New Jerseyans are returning their census forms compared to the rest of the nation. Census Bureau director Robert Groves says the response rate is low in the state's urban areas. Only 27 percent of Newark residents have mailed in their forms and 33 percent of Elizabeth residents have complied. Guess they should have taken the NJBA up on our generous Public Education Program (PEP) offer.

Senate Committee Approves Bill to Add Pro Staff to FCC

A bill that would allow each FCC commissioner to add an electrical engineer or computer scientist to his or her staff has been approved by the Senate Commerce Committee. The FCC Commissioners' Technical Resource Enhancement Act says the new technical staffers would "provide the commissioner technical consultation when appropriate" and "interface with the Office of Engineering and Technology, commission bureaus, and other technical staff of the commission for additional technical input and resources." The bill was co-sponsored by Sens. Olympia Snowe (R-ME) and Mark Warner (D-VA). A similar bill was introduced in the House by Rep. Jerry McNerney (D-CA) earlier this month and has been referred to the House Commerce Committee.

Greater Media’s Smyth: Radio is Best for Political Ads

His “Corner Office” column, advises radio sales executives should not ignore this juicy market because of format issues, just because most of the ad dollars have been directed to television in the past, almost by habit. Peter says that thinking should change. For instance, “the recent healthcare debate had vastly different priorities, depending on the age of the listeners. On the pro-reform side, a reassuring spot for retirees, a clear explanation of future benefits to the 25-44 age group, and a discussion of immediate changes for those 55-64 would have more clearly and convincingly made this complicated issue understandable to the average citizen." He says instead we got "more a steel cage match than a campaign to inform and engage the majority of the electorate.” But it is clear, that radio will reach more diverse voting pools with more intellectual content and can be the best way for issue and candidate’s ads to be broadcast, regardless of format. So it begs the question: Why aren’t more music stations pitching political and issue-ad business?

BMI Announces Promotions

NJBA Board Member Dan Spears of BMI announced that BMI has promoted his colleague Richard Conlon to Senior VP/Corporate Strategy, Communications and New Media, as well as the promotion of the current BMI Chief Financial Officer Bruce Esworthy to SVP/Finance and Administration. Also – Senior VP/Licensing Michael O’Neill becomes SVP/Repertoire and Licensing. Congratulations to our friends at BMI for their on-going success!

Mobile DTV is cooling

Members of the Open Mobile Video Coalition, saying they are encouraged by the FCC's inclusion of mobile DTV in its broadband proposal, are moving forward with plans to roll out the new technology. They also reminded reporters during a conference call that any attempts by the FCC to reclaim broadcast spectrum must be approved by Congress. "I think it's critical that broadcasters maintain their share of spectrum to allow new services like mobile DTV," said Colleen Brown, president-CEO of Fisher Communications and an OMVC member.

Other FCC Deadlines:

April 10 – FCC Form 398 Children's Television Programming Reports Due. By April 10, all commercial full-power television stations and Class A LPTV stations must prepare and file an FCC Form 398 Children's Programming Report for the first quarter of 2010 with the FCC.

April 10 – Children's Television Commercial Limitations Certification. In addition to broadcasting programming responsive to the educational and informational needs of children, the FCC's rules limit the amount of commercial material that can be aired during programming aimed at children. In order to demonstrate compliance with this rule, stations must prepare and place proof of compliance with the commercial limitations in the public inspection file every quarter. Thus, by April 10, stations must prepare and place in their public inspection files proof of compliance with the children's television commercial limitations for the first quarter of 2010.

April 10 – Quarterly Issues Programs Lists. By April 10, all radio and television broadcast stations, both commercial and noncommercial, must prepare and place in their public inspection files a list of important issues facing their communities, and the programs aired in the months of January, February and March dealing with those issues.

April 10 – Class A LPTV Stations Demonstration of Continuing Compliance. The FCC requires that Class A TV stations maintain in their public files sufficient information to demonstrate their continuing eligibility for Class A status—e.g., that they have broadcast three hours per week of local programming, broadcast 18 hours a day, and otherwise observed the rules that apply to full-power TV stations. While the FCC has not mandated that this report or certification be made quarterly, the preparation of the Quarterly Issues Programs lists would seem to provide a good opportunity to prepare such documentation. Accordingly, by this date, Class A stations are encouraged to prepare and place in their public inspection files information sufficient to support their continued eligibility for Class A status.

April 10 – FCC Form 388 DTV Quarterly Activity Station Reports Due. Any full-power digital television stations that have not yet completed their full authorized DTV facilities and that presently serve less than their former authorized analog service area (i.e., stations that do not reach all of their pre-transition viewers) are required to continue DTV consumer education efforts until their request for authorization to operate with such facilities has been withdrawn or denied, or until a granted authorization has expired. Accordingly, any such stations—of which there are only a handful remaining in the country—must continue to file FCC Form 388 quarterly reports summarizing their efforts, up to and including the final quarter in which they have active educational requirements. Thus, by April 10, any such full-power television stations must electronically file an FCC Form 388 DTV Quarterly Activity Station Report with the FCC detailing the station's efforts to educate viewers about the digital television (DTV) transition.

April 14 – Copyright Royalties for Internet Streaming. By April 14, webcasters, including radio stations simulcasting their programming on the Web, must pay the monthly royalty fee to SoundExchange for music streamed by the webcaster during the month ending Feb. 28, 2010, and report the songs they streamed.

Nuthin’ But Fun!

Well, if you made it all the way down to the end of that list, here’s your reward: Check out this neat compilation of fun New Jersey facts. It’ll make ya feel good about our beloved Garden State! www.memory-lane.org/NewJerseyFacts  

Quick Note

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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