Explainer: The Local Radio Freedom Act

NRB | May 12, 2021 | Advocacy

In today’s political climate it’s increasingly rare to have bipartisan support for anything, yet key members from both sides of the of the U.S. Senate and House of Representatives, respectively, have done just that by recently introducing “The Local Radio Freedom Act” (LRFA).  The LRFA is already formally supported by 87 House Representatives and nine Senators. A majority of both bodies is needed for this act to pass.

What is the LRFA, and why should you care?

The recording industry has been striving for a performance fee on AM/FM terrestrial broadcasts for many decades. Broadcasters have always paid the sound recording performance fees when they stream, but they have been exempted from paying fees for this right on their terrestrial signals. The LRFA simply provides resolutions in Congress against the creation of “any new performance fee, tax, royalty, or other charge” on local radio stations.

Radio broadcasters already pay significant royalties for the right to perform music via their broadcasts and digital streams, as they should. The sponsors and supporters of the LRFA are not seeking to have broadcasters pay less than “their fair share.” Rather, legislators are focused in large part on preserving a decades-long rule that exempts broadcasters from paying just one royalty (the over-the-air broadcast transmissions of sound recordings). If you are a broadcaster, you already pay many other music license royalties on your transmissions, including royalties for the over-the-air broadcast of musical works, any digital simulcast streaming that contains music, and potentially separate royalties for events and audio/visual transmissions including music.

You may have heard this proposed new royalty referred to as a “performance tax.” The music industry has steadily advocated for such a new royalty, but it has been successfully opposed by acts similar to the LRFA in prior legislative sessions.

If a new “performance tax” were to be adopted, billions of broadcaster dollars would be shifted into the pockets of the record labels, potentially thrusting some stations into financial hardship or ruin. The music industry has claimed that this over-the-air exemption is unfair to music performers and that broadcasters should begin paying for a royalty that they have long been exempted from under existing law. Broadcasters respectfully disagree. Broadcasters do not desire to “cheat” creators out of payments being wrongfully withheld but simply to pay a fair royalty for the music they distribute while also taking into consideration Congress’ longstanding recognition of certain royalty exemptions that respect the promotional value of free radio broadcasts of music.

This issue doesn’t just impact religious broadcasters. It has vital implications for all broadcasters across America. That’s why NRB fully supports the National Association of Broadcasters (NAB) in its efforts to support and gather a majority approval of the LRFA.

Please consider joining NRB, the NAB, and broadcasters all across the country in supporting the LFRA. Call your local Representative and your Senators and tell them you support this vital effort.

The House needs only 218 signers in favor of HCR-20, which is only 25 short of a simple majority opposing the Tax. If you have not already done so, and if you have developed relationships with House Members in your market(s), this would give you a reason to call on them. We have template letters available for you to adapt to your specific needs, so please step up and resist this anti-radio campaign.

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