To promote transparency and reduce anti-competitive practices in the radio and concert industries.

November 18, 2005

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

To promote transparency and reduce anti-competitive practices in the radio and concert industries.

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 `Radio and Concert Disclosure and Competition Act of 2005'.

SEC. 2. DISCLOSURE REGULATIONS.

(a) Modification of Regulations-

(1) IN GENERAL- Not later than 1 year after the date of the enactment of this Act, the Federal Communications Commission shall modify its regulations under sections 317 and 508 of the Communications Act of 1934 (47 U.S.C. 317 and 508), to prohibit the licensee or permittee of any radio station, including any employee or affiliate of such licensee or permittee, from receiving money, services, or other valuable consideration, whether directly or indirectly, from a record company, recording artist, concert promoter, music promoter, or music publisher, or an agent or representative thereof, unless the licensee or permittee discloses at least monthly the receipt of such money, services, or other consideration to the Federal Communications Commission (in this Act referred to as the `Commission') and the public in a manner that the Commission shall specify.

(2) EXCEPTION- The Commission in modifying its regulations as required under paragraph (1) may create an exception to the prohibition described under paragraph (1) for--

(A) transactions provided at nominal cost; or

(B) paid broadcasting disclosed under section 317 of the Communications Act of 1934 (47 U.S.C. 317), if the monthly disclosure described in paragraph (1) includes the proportion of total airplay considered paid broadcasting.

(b) Playlist- The monthly disclosure by a radio station licensee or permittee required under subsection (a) shall include a list of songs and musical recordings aired during the disclosure period, indicating the artist, record label, and number of times the song was aired.

SEC. 3. ARM'S LENGTH TRANSACTIONS.

(a) In General- Not later than 1 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), to require that all transactions between a licensee or permittee of any radio station, including any employee or affiliate of such licensee or permittee, and a record company, recording artist, concert promoter, music promoter, or music publisher, or an agent or representative thereof, shall be conducted at an arm's length basis with any such transaction reduced to writing and retained by the licensee or permittee for the period of the license term or 5 years, whichever is greater.

(b) Records- A record of each transaction described under subsection (a) shall be--

(1) made available upon request to--

(A) the Commission; and

(B) any State enforcement agency; and

(2) subject to a random audit by the Commission to ensure compliance on a basis to be determined by the Commission.

(c) Exemption- The Commission may create an exemption to the record keeping requirement described in subsection (b)--

(1) for a transaction that is of a nominal value; and

(2) for a radio station that is a small business, as recognized by the Commission and established by the Small Business Administration under section 121 of title 13, Code of Federal Regulations, if the Commission determines that such record keeping poses an undue burden to that small business.

SEC. 4. COMPETITION REGULATIONS.

Not later than 1 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), to accomplish the following:

(1) GENERAL PROHIBITION- To prohibit the licensee of any radio station, including any parent, subsidiary, or affiliated entity of such licensee, from using its control over any non-advertising matter broadcast by such licensee to extract or receive money or any other form of consideration, whether directly or indirectly, from a record company, artist, concert promoter, or any agent or representative thereof.

(2) RADIO STATION CONCERTS-

(A) IN GENERAL- To prohibit a licensee or permittee of a commercial radio station, or affiliate thereof, from--

(i) engaging, receiving, making an offer for, or directly profiting from concert services of any musician or recording artist unless the licensee or permittee does not discriminate, in whole or in part, about the broadcast of non-advertising matter, including any sound recording, by that particular artist upon whether or not that artist performs at the radio station affiliated concert; and

(ii) engaging or receiving concert services of any musician or recording artist unless the licensee or permittee provides the musician or recording artist with compensation for such services at the fair market value for the performance.

(B) DEFINITION- For purposes of subparagraph (A), the term `fair market value' shall include such factors as--

(i) the rate typically charged by the musician or recording artist for a concert of the size being put on for the station;

(ii) the expenses of the musician or recording artist to travel to, and perform at, the concert location; and

(iii) the length of the performance in relation to the standard duration for a concert by the musician or recording artist.

(C) LIMITATIONS AND EXCLUSIONS- The provisions of this paragraph shall not--

(i) prohibit consideration for the concert services being made in the form of promotional value, cash, or a combination of both; or

David Moser's Note: Does this severely limit the effectiveness of the provision above? Could a radio station claim that the "promotional value" an artist receives for a concert performance is equivalent to a large amount of cash and therefore avoid having to pay cash? How would the cash equivalent of promotional value be determined?

(ii) apply to--

(I) a radio station that is a small business, as recognized by the Commission and established by the Small Business Administration under section 121 of title 13, Code of Federal Regulations;

(II) in-studio live interviews and performances; or

(III) concerts whose proceeds are intended and provided for charitable purposes.

(3) RADIO AND CONCERT CROSS-OWNERSHIP-

(A) IN GENERAL- To prohibit a licensee or permittee of a radio station, or affiliate thereof, from owning or controlling a concert promoter or venue primarily used for live concert performances.

(B) WAIVER- The Commission may waive the prohibition required under subparagraph (A) if--

(i) the Commission determines that because of the nature of the cross-ownership and market served--

(I) the affected radio station, concert promoter, or venue would be subjected to undue economic distress or would not be economically viable if such provisions were enforced; and

(II) the anti-competitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the needs of the community to be served; and

(ii) the affected radio station, concert promoter, or venue demonstrates to the Commission that decisions regarding the broadcast of matter, including any sound recording, will be made at arm's length and not based, in whole or in part, upon whether or not the creator, producer, or promoter of such matter engages the services of the licensee or permittee, or an affiliate thereof.

SEC. 5. REVIEW OF TRANSACTIONS.

(a) In General- Upon petition by a musician, recording artist, or interested party, the Commission shall review any transaction entered into under section 3 or section 4.

(b) Copy of Petition- A copy of any petition submitted to Commission under subsection (a) shall be provided by the person filing such petition to the licensee or permittee, or musician or recording artist, as applicable.

(c) Public Disclosure- If the Commission, after reviewing a petition submitted under subsection (a) finds a transaction violated any provision of this paragraph or section 3, the Commission shall publicly, after all parties have had a reasonable opportunity to comment, disclose its finding and grant appropriate relief.

SEC. 6. PENALTIES.

The regulations promulgated under sections 2, 3 and 4 shall set forth appropriate penalties for violations including an immediate hearing before the Commission upon the issuance of a notice of apparent liability or violation, with possible penalties to include license revocation.

SEC. 7. REPORT.

Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter, the Commission shall issue a report to Congress and the public that--

(1) summarizes the disclosures made by licensees and permittees as required under section 2;

(2) summarizes the audits conducted by the Commission as required under section 3(b)(2);

(3) summarizes the cross-ownership waivers, if any, awarded by the Commission under section 4(3)(B);

(4) evaluates ownership concentration and market power in the radio industry in a manner similar to the most recent in the discontinued series of FCC reports, `Radio Industry Review 2002: Trends in Ownership, Format, and Finance'; and

(5) describes any violations of section 2, 3, or 4, and penalty proceedings under section 6, and includes recommendations for any additional statutory authority the Commission determines would improve compliance with regulations issued under this Act.

SEC. 8. LICENSE REVOCATION.

Section 312(a) of the Communications Act of 1934 (47 U.S.C. 312) is amended--

(1) in paragraph (6), by striking `; or' and inserting a semicolon;

(2) in paragraph (7), by striking the period at the end and inserting `; or'; and

(3) by adding at the end the following:

`(8) for violation of or failure to follow any regulation established in accordance with section 2, 3, 4, or 6 of the Radio and Concert Disclosure and Competition Act of 2005.'.

SEC. 9. INCREASED MAXIMUM PENALTIES.

(a) Penalties for Disclosure of Payments to Individuals Connected With Broadcasts- Section 507(g)(1) of the Communications Act of 1934 (47 U.S.C. 508(g)(1)) is amended by striking `$10,000' and inserting `$50,000'.

(b) Penalties for Prohibited Practices in Contests of Knowledge, Skill, or Chance- Section 508(c)(1) of the Communications Act of 1934 (47 U.S.C. 509(c)(1)) is amended--

(1) by striking `$10,000' and inserting `$50,000'; and

(2) by inserting `, for each violation' before the period.

END