[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2691 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2691

 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.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 27, 2002

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

_______________________________________________________________________

                                 A BILL


 
 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 2002''.

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 MONEY OR ANY OTHER VALUABLE CONSIDERATION.

    Not later than one year after the date of 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 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.
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