The NAB Gets It Right, Sometimes

by Rick Rockwell*

The National Association of Broadcasters (NAB) is putting its weight behind two issues that might save both internet radio and satellite radio.

Of course, you might expect a former broadcaster to pat the NAB on the back, but you’d be wrong. The NAB is not out to save democracy. The NAB is not out to do what is best for the media system in the United States. The NAB exists solely to represent broadcasters and it does a very good job of that.

The NAB is one of the most powerful lobbies in Washington. (Don’t think so? Add up the dollars sometime. Or go ask Sen. John McCain: not all of his recent problems are self-inflicted.) Usually, the NAB looks out best for the biggest broadcast firms, not small family-owned operations (these days, those stations are a rare breed). So the NAB represents corporate media. That’s why its positions on low-power FM radio and reinstating the fairness doctrine are so wrong-headed: the NAB is out to stop grassroots competition for its biggest clients or to stop alternative viewpoints that make those corporations squirm.

But on internet radio and satellite radio, the NAB gets it right. The NAB may get it right for the wrong reasons, but in the end the support of this huge lobby could spell the difference.

First, the NAB wants to see equity on royalties for internet radio. That means the NAB backs bills in Congress, which would have internet radio paying the same rates as traditional terrestrial radio.

Why would the NAB support these measures, which seem to give a boost to grassroots radio? Two reasons. First, many traditional radio stations are now streaming their signals online. That means the traditional broadcasters would see the same large increases in royalties for their new online presence. Also, one of the popular webcasters, last.fm, is owned by CBS, one of the real corporate powers, which also owns 144 traditional radio stations. CBS is no longer part of Viacom and is no longer connected to a music label, so its position is different from the major record firms.

The NAB also opposes the merger of XM and Sirius in satellite radio. The NAB opposes the merger for obvious reasons: XM and Sirius provide competition for traditional broadcasters. This week, the satellite services, in a measure to win consumer support, promised to slash prices nearly in half if the merger is approved.

Smartly, the NAB attacked the economics of that offer, asking the question: what keeps those services from slashing prices now? The merger will allow the satellite radio firms to consolidate debt, but most of that debt was brought on by ill-advised deals with star talent. The NAB correctly argues that the FCC, Congress, and the courts shouldn’t reward bad business practices by allowing a merger that will create a monopoly. Also, a satellite radio monopoly will make it extremely tough for new competition in that field in the future. Further, nothing will be able to stop that monopoly from raising rates back to current levels once the merger is approved.

The NAB has successfully raised those points and Congress, the Federal Communications Commission (FCC) and others will be hearing more about them soon. So for once, those who support innovative, grassroots radio and more competition have an unlikely and important ally to do the lobbying.

*Rick Rockwell worked for more than a dozen years as a full-time broadcaster; he also served on Capitol Hill in 2003 and 2004 as an advisor on communications policy issues.

(Photo by David Jones of the Isle of Wight, United Kingdom, via Flickr using a Creative Commons license.)

For related posts on these issues, please see these entries:

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Ned Hughes said...

Thank you for this report. I think that it's really hard to say that they do a good job of representing the listeners when everyone is just so different.

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