The U.S. Senate Commerce Committee held a "Future Of Radio" hearing today, with ownership rules and performance rights royalties as the topic of the day. NAB Radio Board Chair Russ Withers and Free Press Research Director S. Derek Turner both spoke on the issue of ownership consolidation.

Withers pushed for the relaxation of ownership rules, saying, "broadcasters are not asking for total deregulation. Our message is simple: we must have reasonable rules that reflect the current competitive radio environment. With reasonable rules we can have a vibrant industry that will continue to provide the service our local communities expect - whether that is lifeline service in times of emergency or entertainment and informational programming everyday."

Discussing the 1996 Telecommunications Act, Withers said, "In the early 1990's the FCC reported that more than half of all stations were losing money and almost 300 stations had gone silent. You can't serve the public interest with no service. Since 1996, however, numerous studies have shown that the changes within local broadcast markets, especially among radio stations, have enhanced the diversity of programming offered by local stations. And, another study demonstrated, that localism is still alive and well despite the rule changes."

On the other hand, Turner argued that, "Ownership rules exist for a reason: to increase diversity and localism, which in turn produces more diverse speech, more choice for listeners, and more owners who are responsive to their local communities."

He added, "Our research conclusively demonstrates that more consolidation means less female and minority ownership. The Commission needs to first adequately study the issue of minority ownership before moving forward with any rule changes. It may be hard to believe, but they’ve never even conducted an accurate count of who owns the nation’s radio outlets. How can the FCC conduct any meaningful analysis regarding the effects of its policies if it can’t conduct a basic count of who owns what?"

As for the proposed new radio royalties, Withers told the Senate, "Local radio and the recording industry have always enjoyed a mutually beneficial relationship that can be distilled down to one concept: free music for free promotion. Local radio offers the recording industry a listening audience of 232 million listeners a week to promote and expose music that drives consumers to go buy music, attend concerts, and purchase artist merchandise. Now, with slowing sales and arguably a flawed business model for the digital age, the recording industry is looking to recoup their waning revenues through a performance tax on local radio broadcasters. Local radio, however, is not the reason the recording industry is suffering from declining profits, and local radio should not be used as a bail-out fund. Radio broadcasters will fight this tax to preserve a local radio system that remains free, essential, and available to all consumers."

Merge Records co-founder Mac McCaughan also spoke at the hearing, discussing how two bands on his label (Arcade Fire and Spoon) debuted in the top ten in album sales this year, yet have received little commercial radio airplay.

Meanwhile, Sens. Byron Dorgan (D-ND) and Trent Lott (R-MS) announced they would attempt to veto any changes made by the FCC to the ownership rules. "There's no urgency for the agency to further relax ownership rules," said Dorgan, according to Dow Jones. "In fact I would make the case that there's no set of evidence to suggest they should be relaxed."

Lott added, "I think we've already got too much media concentration. I can't understand why a Republican administration would want to allow more concentration."