Congress Killed the Radio Star

Most of the talk in Congress when it comes to radio has involved the attempt by the left to shut down conservative talk radio via some new form of the Fairness Doctrine. Hugh Hewitt reports that there's another congressional effort that could kill another important radio format - music:

The recording industry wants to break the decades old deal with music radio under which the radio plays the songs and the audience hears them and buys the music, first via records, then CDs, and now downloads. Now the recording industry wants all the free promotion but also a royalty on every play of every song.

If successful in the hunt for the new radio tax via Congressional mandate, the best brains of the music business will have killed music radio dead as formats change overnight to avoid the new expense in an advertising-challenged era. Good for talk radio, yes, but bad --very bad-- for the medium generally.

One of the Republican sponsors of this very bad idea is an old friend, Representative Darrell Issa of California. We discussed the tax on yesterday's show. The Congressman seems to believe that it can all be worked out, but this is another CPSIA moment-in-the-making, where the realities of a complex industry just don't register with the lawmakers intent on tinkering with it on behalf of special interests, and who end up sideswiping and damaging scores of companies in the pursuit of a slogan. If the performance tax passes, thousands of radio station employees will be out of work, many stations will simply fold up or move to non-music formats, and the Congress will move on to the next big idea that sounded good at the time.

There's a fundamental law of taxes: You get less of whatever you tax. And adding a pay-per-play to every piece of music that crosses the airwaves will do as Hewitt suggested - drive stations out of the music market. It will become too expensive, especially in a time when there are fewer advertisers and fewer advertising dollars.

If anything this will drive stations to a cheaper talk or news format. If Congress enacts the Fairness Doctrine legislation, the airwaves will be filled with a hissing noise - which in fact could be preferrable to some of the music and all of the liberal talk that's currently out there.