Congress should not pass legislation that hurts free, local broadcasting by modifying the tax laws to make advertising more expensive for businesses. Advertising is currently treated as an ordinary and necessary business expense - just like salaries, rent and utilities - under the U.S. tax code. This means a business can fully deduct the expense in the year it was incurred. Some in Congress have suggested changing the tax treatment of advertising for specific types of products, such as pharmaceuticals. This change would have a devastating impact on listeners and viewers of local radio and television stations that rely on advertising revenue to survive, raises significant First Amendment concerns and ignores the important consumer benefits that advertising provides.
During the past two Congresses, some members of Congress, at the behest of the big record labels, introduced
a bill to impose a performance tax on local radio broadcasters. The Performance Rights Act would have imposed
a devastating new fee on local stations simply for airing music on the radio airing the music that provides free
promotion to the labels and artists. A new performance fee could financially cripple local radio stations putting
jobs at risk, stifle new artists trying to break into the recording business and harm the listening public who rely
on local radio.
The C-band is a strip of satellite spectrum that radio and TV stations use every day to receive critical content for their broadcasts. The Federal Communications Commission (FCC) is considering transferring some or all of that spectrum to wireless companies for new services, which could impact the programming listeners and viewers rely upon.
Virtually all smartphones are manufactured with hardware capable of receiving free FM radio signals, but not all phones have this feature activated, either by choice of the phone’s manufacturer or the wireless carrier. However, Apple has not activated this feature on any of its iPhones, preventing their customers from saving battery life and data charges, while also blocking access to a critical lifeline during times of emergency.
The internet has transformed the media marketplace, yet TV and radio broadcasters are still subject to outdated rules restricting the number and type of outlets they may own. Policymakers should support the continued modernization of these rules to account for the rise, and increasing influence, of digital media.