Congressional Hearings on Performance Royalties and the Journalism Competition & Preservation Act

Wednesday, February 2nd’s House Judiciary Committee performance tax hearing was held at the full committee level. Several Members asked questions clearly aimed at shaping the pro-royalty arguments, including Reps. Nadler^ (NY-10), Cohen^ (TN-09), Deutch^ (FL-22), Jackson-Lee (TX-18), Jayapal^ (WA-07), Jeffries (NY-08), Issa^ (CA-50), Lofgren (CA-19), McBath^ (GA-06), McClintock^ (CA-04), and Raskin^ (MD-08). Others asked questions designed to help make radio’s case, including Reps. Chabot* (OH-01, acting as Ranking Member), Biggs (AZ-05), Fitzgerald (WI-05), M. Johnson* (LA-04), Massie (KY-04), and Tiffany* (WI-07). Several more, though, posed neutral inquiries and allowed the witnesses to frame the issues, including Bass (CA-37), Bentz* (OR-02), Cicilline (RI-01), Correa (CA-46), Dean (PA-04), Demings (FL-10), Garcia (TX-29), H. Johnson (GA-04), and Stanton (AZ-09). 

The panel of four pro-performance tax witnesses (three of them performing artists themselves) stacked against radio’s one witness, Curtis, was clearly designed to spin a narrative in favor of the American Music Fairness Act (AMFA), a performance tax proposal at the heart of this hearing. Curtis’s live testimony focused heavily on the discussions between broadcasters and the recording industry, called by Chairman Nadler, and revealed that hearing-eve publicity stunts by the recording industry should be discounted as such. The hearing questions mainly highlighted the small station “exemptions,” artists’ property rights, promotional value of radio (including to legacy musicians), public safety impact of a performance tax, foreign royalty collection, and comparisons to streaming. The recording industry witnesses largely acknowledged the value of radio (including Gloria Estefan, who said “without radio, we would be nowhere”), but went on to say that such promotional value is not a substitute for royalty payments. They recording industry witnesses went to dispute the notion that the payments (especially those at a lower threshold for smaller stations) would cause any harm to the radio industry.

No mention has been made of scheduling a markup of the AMFA, but we believe it remains a real possibility this Congress and are actively preparing for that case in this hostile committee. The addition of two new House cosponsors overnight takes our current number to 234 combined in the House (210) and Senate (24), and would encourage all to continue to engage your lawmakers on this important signal that, regardless of the Judiciary Committee’s intentions, this remains a majority-opposed effort in the full House.

Wednesday’s hearing regarding the Journalism Competition and Preservation Act (JCPA) was held in the Senate Judiciary Antitrust Subcommittee, chaired by Senate JCPA co-lead, Senator Amy Klobuchar (MN). Joel Oxley, GM of Hubbard-owned WTOP-FM here in Washington, testified on behalf of NAB. Further thanks to Joel for taking the time to represent the broadcast industry and to speak first-hand to WTOP and Hubbard’s investment in journalists and award winning journalism. Other witnesses included antitrust experts testifying for and against the antitrust exemption for newspapers and broadcasters that would be created by the JCPA (Hal Singer and Daniel Francis), a newspaper publisher (Jennifer Bertetto of Trib Total Media), and a witness testifying to alleged anticonservative bias in larger national media outlets (Dan Gainor of Free Speech America and Business for the Media Research Center).

Chairwoman Klobuchar led a wide-ranging discussion outlining the harms against local broadcast and newspaper journalists that are being caused by the anticompetitive practices of Facebook, Google, and the other major online platforms. Other Democrats, including full Committee Chair Dick Durbin (IL), Senator Richard Blumenthal (CT), and Senator Alex Padilla (CA), joined Klobuchar in praising the unique and critical value of local broadcasters and newspapers to local communities, all of whom echoed the urgency of the threat posed by Big Tech to their continued survival. 

Ranking Member Mike Lee (UT) was largely skeptical of the JCPA’s antitrust exemption, and his questioning focused on his belief that the JCPA would create a “cartel” of “Big Media” conglomerates who are largely biased against conservatives, and whose economic challenges are based more upon their own business decisions than the predatory practices of the Big Tech platforms. Notably, the only other Republican to attend the hearing was Sen. Marsha Blackburn (TN), who touched upon similar fears about biased, “Big Media” cartels being created by the JCPA. She also disapprovingly suggested that the JCPA’s antitrust exemption might ultimately necessitate the same type of consent decrees that have governed the music licensing ecosystem for many years.

While Sens. Lee and Blackburn injected a healthy dose of skepticism regarding the JCPA, neither entirely closed the door on the legislation, and Sen. Lee even suggested that he might be more amenable to a significantly narrowed version of the idea. Moreover, although Sen. Kennedy (LA) – the lead Republican sponsor of the bill – did not attend the hearing, we are aware the Sen. Thom Tillis (NC), another Judiciary Committee member, may ultimately support the measure in addition to other Republicans already cosponsoring the legislation outside the committee.

Beyond Wednesday’s hearing, NAB remains engaged with Sen. Klobuchar and Rep. David Cicilline (RI-01) – the lead House sponsor of the JCPA – on improvements to the measure, and expect that a revised version of the bill will be released by those members soon, following agreement from the Republican leads in the Senate and House (Sen. Kennedy and Rep. Buck (CO-04)), respectively. Whether as a stand-alone or attachment to broader big-tech antitrust legislation, NAB will continue to support that the JCPA receive serious consideration and advancement this Congress and as soon as this quarter, consistent with these legislative leaders own statements.