Radio Outlook 2023

Many of radio’s key issues in Washington remain unresolved as the second act of the Biden administration begins with a newly-divided Congress. That split could put added focus on the regulatory agencies to achieve policy goals unlikely be resolved on Capitol Hill. From pending legislation in Congress to proposed rulemakings at the Federal Communications Commission, here are four things the radio industry needs to watch for in Washington in 2023.

Performance Royalty Returns

It has become a perennial battle for radio. Buoyed by the passage last month of the American Music Fairness Act (H.R. 4130) in the House Judiciary Committee, supporters are vowing to press on with their fight in the118th Congress. “The proposal to finally compensate music creators when their songs are played on AM/FM radio made more progress in 2022 than in any year since 2009,” said Joe Crowley, chair of the musicFirst Coalition. He says royalty supporters are looking to build on that momentum and “take the fight for music fairness even further in 2023.”

The National Association of Broadcasters has continued to offer to negotiate with the record labels on a larger deal that includes streaming rights, and radio has consistently lobbied hundreds of lawmakers to oppose any change to the law. A fresh Local Radio Freedom Act is expected to be introduced in the coming months.

Broadcast lobbyists say they also heard something else during last month’s House vote as lawmakers pushed the two industries to reach a consensus. “Having the House go Republican is also more helpful for the industry,” said one, who notes that while radio has found supporters in both parties, GOP members have traditionally been more open to siding with broadcasters.

Cannabis Ads Face Uphill Climb

The divided Congress means getting any legislation through will be more challenging, including some things broadcasters want. That includes efforts to change federal drug classification laws which could open the door to more cannabis ads on radio. But Republican members have been cooler to the idea, and they now control things in the House.

“I just don’t see that getting over the finish line,” said a Washington insider. Even if Congress were to relax some drug laws, lobbyists say it is possible that strict restrictions on advertising could be included, similar to how federal law prohibits tobacco ads on radio. “Federal legalization is not the end of the story. Other things need to happen, and it gets very complicated,” they said.

FTC A Growing Concern

President Biden is certain to be stymied in Congress in a way he has not been during the past two years. Coming out of the midterms and seeing the messy leadership decision-making by House Republicans last week, some in Washington expect the administration to put more of its focus on pushing through its agenda at the agency level. That includes the Federal Trade Commission.

The FTC currently has launched a rulemaking that would stiffen penalties on endorsement ads like those pitched by radio personalities when they are found to be deceptive. That includes creating new monetary fines to “deter bad actors.” The FTC this month also proposed a new rule that would ban employers from imposing noncompetes and require existing ones to be rescinded.

Beltway insiders think FTC Chair Lina Khan will try to expand FTC authority, or creatively read into the authority Khan believes the agency already holds. “It's going to be active there,” one predicted.

FCC Eyes Media, EEO And Sponsorship Rules

This month’s renomination of Gigi Sohn to serve on the FCC likely signals the White House believes it has the votes to get her confirmed, and give Chair Jessica Rosenworcel the majority she has waited two years for. That would open the door to more controversial proceedings, including potential changes to radio ownership limits as part of the just-launched quadrennial media ownership review.

Rosenworcel is also likely waiting for a third vote on a proposed rulemaking started in 2021 that would restart the collection of annual (Form 395) employment data from stations.

Rosenworcel is also looking for a way to revive some of the foreign sponsorship identification rules that were struck down by a federal appeals court. “As we get closer to an election year, commissioners are more focused on disclosure issues,” one lobbyist noted.

A wildcard is GeoBroadcast Solutions’ pending Zonecasting proposal. The FCC often declines to make technical rule changes when nearly all of the biggest broadcast groups have opposed them, and a reversal by the National Association of Black-Owned Broadcasters, which now opposes the plan, offers potential cover for a commissioner to vote “no.”