NJBA Weekly Newsletter Friday, May 15, 2009

Speak Now or Forever Hold Your Piece

Literally. The simple truth is the radio industry cannot survive a Performance Tax. Despite pleas from local radio stations, listeners, and civil rights leaders, the House Judiciary Committee passed a bill this past Wednesday by a vote of 21 to 9 that would levy a new fee on local radio stations for music aired free to listeners. If enacted, 50 percent of the new fee would go directly into the coffers of the major record label companies, three out of four of which reside outside the United States. The NJBA is certainly not happy to see it voted out of committee, but pleased at the bipartisan opposition within the House Judiciary Committee. MusicFIRST, on the other hand, was celebrating victory.

While New Jersey does not have a Congressional member on this committee NJBA President Paul Rotella attended the committee’s mark-up in Washington that morning. In addition, he and NJBA Board Member Robert McAllan visited Members of NJ’s Congressional Delegation who are still in favor of this industry crippling legislation. NJBA members should call to applaud the solid leadership of Representatives Rob Andrews (202)225-6501, Frank LoBiondo (202) 225-6572, Frank Pallone (202) 225-4671, Albio Sires (202) 225-7919 and Bill Pascrell (202) 225-5751, who are all solid friends of free-over-the-air-radio for all New Jersey residents, and are also part of the 196 members who have co-sponsored H. Con. Res. 49, the “Local Radio Freedom Act”. (Learn more at www.noperformancetax.org). Unfortunately, Congressmen Garrett, Adler, Smith and Frelinghuysen are wavering a bit and need reinforcement, but worse, Representatives Holt, Payne and Rothman are currently in favor of the Performance Tax and the NJBA is working with them to help them understand the devastating issues facing all NJ residents if this Tax is imposed on Radio stations.

The following Congressmen need to hear from you loud and clear! Call them today to make your important opinion known:

John Adler (D-3^rd) 202-225-4765; and 856-985-2777

Steven Rothman (D-9^th) 202-225-5061; and 201-646-0808; and 201-798-1366

Donald Payne (D-10^th) 202-225-3436; and 908-629-0222; and 201-369-0392

Christopher Smith (R-4^th) 202-225-3765; and 609-585-7878; and 732-350-2300

Leonard Lance (R-7^th) 202-225-5361; and 908-518-7733

Scott Garrett (R-5^th) 202-223-4463; and 201-712-0330; and 973-300-2000

Rush Holt (D-12^th) 202-225-5801; and 609-750-9365

Rodney Frelinghuysen (R-11^th) 202-225-5034; and 973-984-0711

FCC Fines for Not Following Contest Rules

The FCC fined yet another broadcaster for violations of its contest rules, issuing a fine of $4,000 to a station that had not disclosed to its listeners all of the material terms of a contest that it conducted on the air. In this case, the station promised a give-away of three cars, but in reality it was only awarding to winners a two-year lease for the cars, not actual ownership of the vehicles. This is another in a series of recent fines for contests, so stations should be aware of the attention that the FCC is giving these issues. And this case should again remind broadcasters that they must disclose any practices that may affect the odds of winning of potential contestants - including any benefits that certain listeners, like members of loyal listeners clubs, might get that would improve their chances of winning a contest.

Satellite Radio Loses Listeners as Terrestrial Radio Increases Dominance

At a time when more and more Americans are listening to radio, Sirius XM Radio Inc. saw its number of subscribers decline during a quarter for the first time since its inception in 2001, indicating a rocky road ahead as consumers slash spending and car sales skid. A record 1.7 million satellite-radio subscribers cancelled their service in the first quarter, more than offsetting the 1.3 million new customers that Sirius XM added in the period. The company ended March with 18.6 million customers, down 404,000 from December.

Remember FCC Public File Obligations When Running Issue Advertising

As we all know, political ads are running on broadcast stations across the Garden State. These ads often have a tag line “write or call your Congressman and tell him to vote No” on whatever bill is being discussed. While these are not ads for political candidates that require lowest unit rates or specific equal opportunities, they do give rise to political file issues.  Stations need to remember to observe these requirements and put the required information into their public file to avoid FCC issues. Under provisions of the Bipartisan Campaign Reform Act, when a station runs an ad addressing a “Federal issue”, the station must keep in its public file essentially all the same information about the ad that it would maintain for a candidate ad. The station must identify the spot and the schedule that its sponsor has purchased, the identity of the sponsor (name, address and list of principal executive officers or directors), the class of time purchased, and the price paid for the ads.  Federal issues are ones that deal with a Federal election or with any issue to be considered by Congress or any Federal government agency. Even ads dealing with state or local issues (e.g. school bond issues, zoning disputes, and state ballot initiatives) require some public file disclosures.  While stations do not need to provide information about the entire schedule and the price of spots purchased in connection with controversial issues of state or local importance, they do need to maintain in their public file a list of the sponsoring organization's chief executive officers, the members of its executive committee, or its directors.  Maintain those files – and stay out of potential FCC trouble.

75 Percent of DTV-Ready Homes Claim Better Reception, More Channels

With less than a month remaining until television stations across America switch to all-digital broadcasting, NAB released a new poll that shows 75 percent of digital-ready households say they received better quality reception across all broadcast channels after upgrading to digital with a converter box. Meanwhile, another nationwide DTV soft test is scheduled for May 21^st.

New Jersey Tax Amnesty Begins 

New Jersey Tax Amnesty started last week and will run to June 15th. Amnesty applies to all New Jersey state taxes and to levies accruing between January 1, 2002 and January 31, 2009. All taxpayers are eligible to participate except those under criminal investigation or charged with a criminal state tax violation, per the Division. After the amnesty period concludes, taxpayers that failed to participate will be subject to a 5% penalty if their tax debt becomes known.

Nominate Your Station for the Top Honor

One of the most prestigious awards in radio could be yours. Winners enjoy the competitive edge of being nationally recognized – and that edge is within your grasp. Nominate your station and top air personality for the NAB Marconi Radio Awards now. The deadline is May 31.Nominations are being accepted in the following categories: Station of the Year by Market Size; Station of the Year by Format; Personality of the Year by Market Size; Spanish Format Personality of the Year; Network/Syndicated Personality of the Year; Legendary Station. Nominations are made online at www.nab.org/awards/marconis and are due May 31. Finalists will be announced in July and winners will be announced in Philadelphia at the NAB Marconi Radio Awards Dinner and Show, Thursday, September 24.

The Quest for the NAB’s Next Leader Begins

Following last week’s resignation by NAB president/CEO David Rehr, the effort to find a successor will begin over the next several weeks. Under NAB bylaws, the most recent past Joint Board chairman will head the search committee. That points to Bonneville CEO Bruce Reese, although he is set to rotate off the committee in just a few weeks. Hopefully, the board will move swiftly to hire a new President and CEO. The Executive Board will meet this week to start the process. The NAB Board meets next month. Radio Board Chairman Steve Newberry will become the next Joint Board chairman and expects he and other board members will spend more time in Washington overseeing the NAB in the coming months. The NJBA stresses that there has never been a greater need for Garden State’s broadcasters to be actively involved in grassroots lobbying efforts.  With the issues that are currently ‘on the table’ and with no ‘leadership’ on the national level - - - - it’s up to us!                                                                             

The Trenton Report from The Marcus Group

Amidst budget deliberations, there has been some legislative activity. A bill prohibiting the use of simulated government documents in advertising was introduced in the Assembly. Two bills touching on access to public documents were also introduced - one concerns private detectives’ access to government records and the other would provide copies of public documents via email at no additional charge. Additionally, Assemblyman Chivukula’s bill calling for expanded commitments from certain cable television companies concerning public, educational and governmental access channels was reported out of the Assembly Telecommunications and Utilities Committee.

New Jersey Takes a “Time Out”

New Jersey is furloughing workers across state government in May and June to help cut spending as Governor Corzine faces a deficit in the current year budget that has now grown to more than $1.2 billion. The furloughs are part of a broader budget rebalancing proposal Corzine rolled out in February that also includes department spending cuts, a tax amnesty program and other measures. Getting a new driver’s license, boat registration or some other transaction completed with the New Jersey Motor Vehicle Commission will be impossible on May 18 and June 15. County courthouses throughout New Jersey will be shuttered on May 22 and June 29. The Trenton War Memorial, a 1,800-seat theater near the State House administered by the New Jersey Department of State, is closed on May 11 and again June 22. And those New Jersey welcome centers won’t be welcoming anyone on May 12 and June 9.

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.