To amend the Communications Act of 1934 to facilitate an increase in programming and content on radio that is locally and independently produced, to facilitate competition in radio programming, radio advertising, and concerts, and for other purposes.

January 28, 2003

Mr. FEINGOLD (for himself and Mr. Miller) introduced the following bill; which was read twice and referred to the Committee on Commerce, Science, and Transportation

To amend the Communications Act of 1934 to facilitate an increase in programming and content on radio that is locally and independently produced, to facilitate competition in radio programming, radio advertising, and concerts, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Competition in Radio and Concert Industries Act of 2003'.

SEC. 2. FINDINGS; PURPOSE.

(a) FINDINGS- Congress makes the following findings:

(1) Pursuant to the Telecommunications Act of 1996 (Public Law 104-104), the Federal Communications Commission eliminated national ownership rules, and revised local ownership rules, for radio broadcast stations.

(2) This deregulation of ownership rules has materially altered the radio broadcast industry and resulted in a concentration of ownership of radio stations and a corresponding reduction in localism. The number of radio station owners decreased from 5,100 in 1996 to 3,800 in 2001, a decrease of 25 percent.

(3) Segments of the radio, concert, and concert promotion industries have also become vertically integrated. In some cases, radio station owners, and concert promoters have common ownership, as well as exclusive agreements to manage concert venues. As a result, these radio station owners have the incentive and ability to favor the musical artists and groups they promote.

(4) This could make it more difficult for nonaffiliated concert promoters to secure air time, for nonaffiliated musical artists or groups to secure air time, and for nonaffiliated radio stations to secure access to musical artists or groups.

(5) According to a number of recent studies, in the rapid consolidation of the radio, concert promotion, and concert venue industries in the 5-year period following the enactment of the Telecommunications Act of 1996, concert ticket prices have increased by more than 50 percent more than such prices had increased in any previous 5 year-period.

(6) According to some estimates, from l991 to 1996, the average concert ticket price increased by approximately 21 percent, compared to an increase in the Consumer Price Index of about 15 percent. From 1996 to 2001, the average concert ticket price increased by more than 61 percent, while the Consumer Price Index increased by 13 percent.

(7) There is a substantial public interest in promoting the values embraced by the first amendment to the Constitution, and the public interest, convenience, and necessity, by increasing the presence of independently-owned and locally-produced content on radio.

(8) There is a substantial public interest in promoting the value embraced by the first amendment to the Constitution by strengthening the diversity of voices provided through media such as radio.

(9) Pursuant to its authority and responsibility to protect the public interest under the Communications Act of 1934, the Commission has sought to promote diversity and competition in radio broadcasting.

(10) The promotion of independently-owned and locally-produced content in radio not only addresses the primary objective of the Commission to guarantee adherence to the first amendment to the Constitution, it also increases competition of audio in the provision of audio programming, in radio advertising, and in concert venue and concert promotion.

(11) The concentration of ownership of radio stations and a corresponding reduction in localism following the enactment of the Telecommunications Act of 1996 has exceeded that intended by Congress in enacting that Act.

(12) In 1995, the top 50 radio groups owned 8.6 percent of the total number of radio stations. By 2000 they owned 27.5 percent of the total number of radio stations.

(13) In 1995, the top 50 radio groups accounted for 43.6 percent of the total revenues going to all radio stations. By 2000 that percentage had increased to 62.5 percent.

(14) The top 10 groups account for almost 50 percent of all radio station industry revenues, while owning 17.6 percent of all commercial radio stations.

(15) This consolidation has also caused some radio station groups to collect alternative sources of income, including establishing exclusive agreements with independent promoters, establishing fees for play list monitoring, and limiting radio promotion of concert tours to musical artists and groups playing at venues owned by such groups.

(16) These practices, when coupled with the increased concentration of the ownership of radio stations, have the potential to reduce the diversity of music and other material made available to the American public over radio as stations make programming decisions for reasons other than the licensee's bona fide determination whether the material serves the public interest.

(17) Current Commission rules prohibiting payola predate the enactment of the Telecommunications Act of 1996, and the evolution of new promotional practices, and do not directly address the applicability of sections 317 and 507 of the Communications Act of 1934 (47 U.S.C. 317, 508) to such new promotional practices. As a result, radio stations engaging in such practices do not make any sponsorship identification announcements in connection with the broadcast of material which are the subject of such practices.

(18) These types of practices are inconsistent with the public interest and with the policies enunciated in sections 317 and 507 of the Communications Act of 1934. In order to assure compliance with these sections, the Commission should revise its rules implementing those sections to prohibit these practices and to facilitate the broadcast of diverse radio programs while assuring that legitimate promotional activities can continue.

(19) Promotion of the values embraced by the first amendment to the Constitution, and the strengthening of a diversity of voices provided through media, such as radio, is in the public interest.

(20) A broader diversity of voices through media sources such as radio promotes the right of the people under the first amendment to the Constitution to receive a wide range of information.

(b) PURPOSE- The purpose of this Act is to promote the values embraced by the first amendment to the Constitution, and the public interest, convenience, and necessity, by facilitating--

(1) better service by radio stations to the local communities they are licensed to serve, including an increase in the amount of radio programming and content that is produced by local and independent sources;

(2) an increase in competition in radio programming and content, radio advertising, concert venues, and concert promotion; and

(3) more diversity in radio programming.

SEC. 3. PROHIBITION ON USE OF RADIO TO REDUCE PUBLIC ACCESS TO DIVERSE RADIO AND CONCERT PROGRAMMING AND CONTENT.

(a) REVOCATION OF LICENSE FOR HINDERING AVAILABILITY OF INDEPENDENT, LOCAL PROGRAMMING AND CONTENT- Section 312(a) of the Communications Act of 1934 (47 U.S.C. 312(a)) is amended--

(1) in paragraph (6), by striking `or' at the end;

(2) in paragraph (7), by striking the period at the end and inserting a semicolon; and

(3) by adding at the end the following new paragraph:

`(8) for willful and repeated engagement in unfair methods of competition, unfair or deceptive acts or practices, or tying the use of entities owned by the licensee or permittee for the purpose of hindering significantly, or preventing, the broadcast of programming or content, including any sound recording by a musical artist, if such programming or content is produced or promoted by a person independent of the licensee or permittee or the creator thereof is independent of the licensee or permittee; or'.

(b) REVOCATION OF LICENSE FOR HINDERING AVAILABILITY OF CONCERTS- That section is further amended by adding at the end the following new paragraph:

`(9) for conviction or final adjudication under an antitrust law or unfair trade practice law of a violation of such law regarding concert venues or concert promotion.'.

(c) PROHIBITION- That section is further amended by adding at the end the following new subsection:

`(h) PROHIBITION ON HINDERING AVAILABILITY OF RADIO PROGRAMMING AND CONTENT AND CONCERTS-

`(1) PROHIBITION- Under such regulations as the Commission shall prescribe, it shall be unlawful for any licensee or permittee to carry out an act for which revocation of a license or permit is authorized under paragraph (8) or (9) of subsection (a).

`(2) PENALTIES- A licensee or permittee that violates paragraph (1) shall be subject to such penalties under title V as the Commission shall prescribe in regulations.

`(3) CONSTRUCTION WITH LICENSE REVOCATION AUTHORITY- The penalties provided under paragraph (2) for an act described in paragraph (1) are in addition to any other action which the Commission may take under subsection (a) with respect to such act.'.

(d) DEFINITIONS- Subsection (f) of that section is amended by adding at the end the following new paragraphs:

`(3) The term `antitrust law' has the meaning given that term in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)).

`(4) The term `unfair trade practice law' means the Federal Trade Commission Act (15 U.S.C. 41 et seq.) and include any State law similar to that Act.'.

(e) REGULATIONS-

(1) IN GENERAL- Not later than 180 days after the date of the enactment of this Act, the Federal Communications Commission shall prescribe regulations and implement the amendments to section 312 of the Communications Act of 1934 made by this section.

(2) CONSULTATION- The Federal Communications Commission shall prescribe regulations under paragraph (1) in consultation with the Federal Trade Commission.

(3) ELEMENTS- The regulations under paragraph (1) shall prohibit a licensee or permittee of a radio station, or affiliate thereof, that has an attributable interest (as determined under section 73.3555 of title 47, Code of Federal Regulations) in a programming entity or concert venue or concert promotion service from--

(A) improperly influencing the decision of the entity or service, or any musician or other programming or content provider, to sell, or the price, terms, or conditions of sale of, satellite cable programming or content or satellite broadcast programming or content to any other radio station or unaffiliated concert venue or concert promotion service;

(B) improperly influencing the decision of any musician or other programming or content provider to sell, or the price, terms, or conditions of sale of, any song, work, or sound recording, programming, concert performance, or concert promotion service to any person or entity not affiliated with--

(i) the licensee or permittee;

(ii) an affiliate of the licensee or permittee; or

(iii) an entity in which the licensee or permittee has an attributable interest;

(C) discriminating against a musician or other programming or content provider that does not agree to enter into a contract or other arrangement with an entity affiliated with the licensee or permittee, or in which the licensee or permittee has an attributable interest, that offers concert venue or concert promotion service;

(D) requiring an exclusive contract or other arrangement with a musician or other programming or content provider that prevents other radio licensees or permittees, concert promotion entities, or concert venues from obtaining programming or content from the musician or other programming or content provider to the extent that such contract or other arrangement--

(i) impairs, impedes, or prevents competition in radio programming or content, concert venues, or concert promotion;

(ii) impairs, impedes, or prevents diversity of programming or content in local radio markets;

(iii) is unduly long in duration; or

(iv) contains unreasonable renewal or extension provisions.

(4) EXCLUSION FROM REQUIRED BIENNIAL REVIEW- Section 202(h) of the Telecommunications Act of 1996 (Public Law 104-104; 110 Stat. 111), relating to the biennial review by the Commission of its ownership rules, shall not apply with respect to the regulations prescribed under this section.

SEC. 4. ENHANCED SCRUTINY OF FURTHER CONSOLIDATION IN RADIO.

(a) ENHANCED SCRUTINY-

(1) IN GENERAL- Section 309 of the Communications Act of 1934 (47 U.S.C. 309) is amended by adding at the end the following new subsection:

`(m) ADDITIONAL REQUIREMENTS REGARDING RADIO-

`(1) HEARING ON CERTAIN APPLICATIONS- The Commission shall designate for hearing any application for the grant, transfer, assignment, or renewal of a license for a commercial radio station if approval of the application would result in the applicant, or any of its stockholders, partners, members, officers, or directors, owning, operating, controlling, or having an attributable interest, whether directly or indirectly, in radio stations that have an aggregate national audience reach, as determined in a manner comparable to the manner provided for television stations under section 73.3555(e)(1) of title 47, Code of Federal Regulations, exceeding 60 percent.

`(2) SHOWING AT HEARING- In addition to any other matters required to be shown under this section, an applicant referred to in paragraph (1) shall be required to show at a hearing under that paragraph that the applicant--

`(A) with respect to all radio stations in which the applicant has an attributable interest at the time of application, does not--

`(i) improperly influence the decision of any musician or other programming or content provider to sell, or the price, terms, or conditions of sale of, any song, work, or sound recording, programming, concert performance, or concert promotion service to any person or entity not affiliated with--

`(I) the applicant;

`(II) an affiliate of the applicant; or

`(III) an entity in which the applicant has an attributable interest;

`(ii) discriminate against any musician or other programming or content provider that does not agree to enter into a contract or other arrangement with an entity affiliated with the applicant, or in which the applicant has an attributable interest, that offers concert venue or concert promotion service; or

`(iii) require any exclusive contract or other arrangement with a musician or other programming or content provider that prevents other radio licensees or permittees from obtaining programming or content from the musician or other programming or content provider; and

`(B) with respect to the radio station covered by the application, has identified and will respond through appropriate programming or content to the problems, needs, and interests of the local market for such radio station.'.

(2) EFFECTIVE DATE- Subsection (m) of section 309 of the Communications Act of 1934, as added by paragraph (1), shall take effect on the date of the enactment of this Act, and shall apply with respect to applications described by such subsection that are pending with the Federal Communications Commission on or after that date, regardless of the number of AM or FM radio stations owned, operated, or controlled by the applicant concerned on that date.

(b) LOCAL MARKET SHARE AND LOCAL MARKETING AGREEMENTS- The Federal Communications Commission shall prescribe regulations to prohibit the transfer or assignment to operate, or the use of, a local marketing agreement with respect to a commercial radio station if the transfer or assignment, or such agreement, will permit the applicant, or the brokers of such agreement, to own, operate, or have an attributable interest in commercial radio stations that have in aggregate, as of the date of application therefor--

(1) more than 35 percent of the audience share of the local market of such radio stations; or

(2) more than 35 percent of the radio advertising revenue in the local market of such radio stations.

(c) LOCAL OWNERSHIP LIMITS-

(1) PROHIBITION ON UPWARD REVISION OF LIMITS- The Federal Communications Commission may not revise upward the limitations on multiple ownership of radio stations specified in section 73.3555(a) of title 47, Code of Federal Regulations, as of the date of the enactment of this Act.

(2) EXCLUSION FROM REQUIRED BIENNIAL REVIEW- Section 202(h) of the Telecommunications Act of 1996 (Public Law 104-104; 110 Stat. 111), relating to the biennial review by the Commission of its ownership rules, shall not apply with respect to the limitations on multiple ownership of radio stations referred to in paragraph (1).

SEC. 5. REVIEW OF USE OF PRIVATELY-CONTROLLED AUDIENCE MEASUREMENT SYSTEMS FOR DETERMINATION OF LOCAL MARKETS OF RADIO STATIONS.

(a) REVIEW REQUIRED- Not later than one year after the date of the enactment of this Act, the Federal Communications Commission shall conduct a review of the advisability of its continuing to utilize privately-controlled audience measurement systems in order to determine the local markets of radio stations.

(b) ELEMENT OF REVIEW- As part of the review under subsection (a), the Commission shall determine whether or not the commercial radio industry utilizes practices to manipulate privately-controlled audience measurement systems.

(c) ACTION AFTER REVIEW- If the Commission determines as a result of the review under subsection (a) to continue to utilize privately-controlled audience measurement systems in order to determine the local markets of radio stations, the Commission shall prescribe in regulations measures to adapt to changes in audience measurement under such systems in order to ensure that audience measurement by the Commission utilizing such systems is consistent over time and is not subject to influence by the commercial radio industry or other private parties.

(d) MEASUREMENT OF RURAL AREAS AND SMALL MARKETS- The Commission shall prescribe in regulations mechanisms to measure the audiences in rural markets, small markets, and other markets not covered by privately-controlled audience measurement systems.

SEC. 6. MODIFICATION OF ATTRIBUTABLE INTEREST IN RADIO STATIONS AND LIMITATIONS ON LOCAL MARKETING AGREEMENTS.

(a) MODIFICATION OF ATTRIBUTABLE INTEREST- The Federal Communications Commission shall modify its rules under section 73.3555 of title 47, Code of Federal Regulations, in order to provide the following:

(1) That a licensee or permittee of a commercial AM or FM radio station shall be treated as having an attributable interest in an entity that supplies more than 15 percent of the total weekly broadcast programming hours to another licensee or permittee of a commercial AM or FM radio station if--

(A) the licensee or permittee holds equity (including all stock, whether voting or nonvoting and whether common or preferred) and debt in such entity in excess of 33 percent of total asset value of such entity, as determined by taking into account the aggregate value of all equity and debt of such entity; or

(B) the licensee or permittee holds an option to purchase or acquire such entity.

(2) That a licensee or permittee of a commercial AM or FM radio station shall be treated as having an attributable interest in another licensee or permittee of a commercial AM or FM radio station if an individual or entity serving the licensee or permittee serves such other licensee or permittee in an identical or similar capacity with regard to the provision of program content, selection of program content, or supervision of selection of program content for such other commercial AM or FM radio station.

(b) REPORTS ON SPECIAL RELATIONSHIP CONTRACTS-

(1) IN GENERAL- Not later than one year after the date of the enactment of this Act, the Commission shall prescribe in regulations requirements that each licensee or permittee of a radio station submit to the Commission a report on each special relationship contract between such licensee or permittee and another licensee or permittee of a radio station, or any person or entity having an attributional interest in such other licensee or permittee, in the market served by such licensee or permittee.

(2) SPECIAL RELATIONSHIP CONTRACT DEFINED- In this subsection, the term `special relationship contract' means a contract, option, or other arrangement regarding management, programming, or sales, an actual or contingent financial arrangement, ownership interest, investment, or loan between the parties to such contract, option, or other arrangement or their immediate families.

(c) LIMITATION ON DURATION OF CERTAIN LOCAL MARKETING AGREEMENTS-

(1) IN GENERAL- No local marketing agreement or other agreement entered into or renewed after the date of the enactment of this Act under which a licensee or permittee of a commercial radio station, or any person or entity having an attributional interest in the commercial radio station, provides more than 15 percent of the programming or content to another commercial radio station in the same market may have a term exceeding one year, including any period of renewal of such agreement.

(2) APPLICATION- Paragraph (1) shall apply with respect to any agreement described by that paragraph that is in effect on or after the date of the enactment of this Act.

(d) EXCLUSION FROM REQUIRED BIENNIAL REVIEW- Section 202(h) of the Telecommunications Act of 1996 (Public Law 104-104; 110 Stat. 111), relating to the biennial review by the Commission of its ownership rules, shall not apply with respect to any rules or requirements established by or under this section.

SEC. 7. USE OF CONTROL OVER BROADCAST MATTER BY A RADIO STATION TO EXTRACT OR RECEIVE MONEY OR ANY OTHER VALUABLE CONSIDERATION.

Not later than one year after the date of the enactment of this Act, the Federal Communications Commission shall modify its regulations under sections 317 and 507 of the Communications Act of 1934 (47 U.S.C. 317 and 508), in order to prohibit the licensee of any radio station, including any parent, subsidiary, or affiliated entity of such licensee, from using its control over any matter broadcast by such licensee to extract or receive money or any other consideration, whether directly or indirectly, from a record company, artist, concert promoter, or other entity or an agent or representative thereof.

SEC. 8. LIMITATION ON SUSPENSION OR WAIVER OF RULES.

(a) LIMITATION- The Federal Communications Commission may suspend or waive a rule or regulation prescribed under this Act, or implementing a provision of this Act, only if the Commission determines that there is a compelling justification to suspend or waive the rule or regulation.

(b) TREATMENT OF COURT DECISIONS- The decision of a court to stay, reverse, or negate a rule or regulation of the Commission referred to in subsection (a), if not final or if stayed on appeal, does not constitute good cause for purposes of that subsection.

SEC. 9. ANNUAL REPORTS.

Not later than January 31 each year, the Federal Communications Commission shall submit to Congress a report on the compliance of the commercial radio industry during the preceding year with prohibitions on sponsorship identification, payola, plugola, national and local ownership limitations, local marketing agreements, and attributional interest rules, including practices of the industry that have the effect of circumventing such prohibitions.

END