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111th Congress                                   Calendar No. 625
 2d Session                      SENATE                          Report
                                                                111-340
_______________________________________________________________________

                                     

                                                       
 
            COMMERCIAL ADVERTISEMENT LOUDNESS MITIGATION ACT

                               __________

                              R E P O R T

                                 OF THE

                  COMMITTEE ON COMMERCE, SCIENCE, AND

                             TRANSPORTATION

                                   on

                                S. 2847



                                     

               September 29, 2010.--Ordered to be printed
       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
                     one hundred eleventh congress
                             second session

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas
JOHN F. KERRY, Massachusetts         OLYMPIA J. SNOWE, Maine
BYRON L. DORGAN, North Dakota        JOHN ENSIGN, Nevada
BARBARA BOXER, California            JIM DeMINT, South Carolina
BILL NELSON, Florida                 JOHN THUNE, South Dakota
MARIA CANTWELL, Washington           ROGER F. WICKER, Mississippi
FRANK R. LAUTENBERG, New Jersey      GEORGE S. LeMIEUX, Florida
MARK PRYOR, Arkansas                 JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri           DAVID VITTER, Louisiana
AMY KLOBUCHAR, Minnesota             SAM BROWNBACK, Kansas
TOM UDALL, New Mexico                MIKE JOHANNS, Nebraska
MARK WARNER, Virginia
MARK BEGICH, Alaska
                     Ellen Doneski, Staff Director
                   James Reid, Deputy Staff Director
                     Bruce Andrews, General Counsel
                 Ann Begeman, Republican Staff Director
              Brian Hendricks, Republican General Counsel
                Todd Bertoson, Republican Senior Counsel
                                                       Calendar No. 625
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-340

======================================================================




            COMMERCIAL ADVERTISEMENT LOUDNESS MITIGATION ACT

                                _______
                                

               September 29, 2010.--Ordered to be printed

                                _______
                                

     Mr. Rockefeller, from the Committee on Commerce, Science, and 
                Transportation, submitted the following

                                 REPORT

                         [To accompany S. 2847]

    The Committee on Commerce, Science, and Transportation, to 
which was referred the bill (S. 2847) to regulate the volume of 
audio on commercials, having considered the same, reports 
favorably thereon with an amendment (in the nature of a 
substitute) and recommends that the bill (as amended) do pass.

                          Purpose of the Bill

    The purpose of the Commercial Advertisement Loudness 
Mitigation Act, S. 2847, as reported, is to require the Federal 
Communications Commission (FCC) to incorporate into its rules 
by reference the standard developed by an industry standards-
setting body for moderating the loudness of commercials in 
comparison to accompanying video programming.

                          Background and Needs

    The FCC has been aware of excessively loud commercial 
advertisements on television and radio since at least 1954.\1\ 
The most common example is when a commercial advertisement, 
without any action by the consumer, becomes abruptly louder 
than the programming that the commercial accompanies. Many 
consumers find sudden disparity between the volume of the 
commercial and the volume of the programming disruptive and 
intrusive. The FCC does not currently regulate the volume of 
commercial advertisements. Television broadcasters and 
multichannel video programming distributors (MVPDs) in the 
United States are aware of the problem. A non-profit 
organization that develops international standards for digital 
television, the Advanced Television Systems Committee (ATSC), 
has developed the technical standards necessary to control 
variations in commercial loudness. These standards, the ``ATSC 
Recommended Practice: Techniques for Establishing and 
Maintaining Audio Loudness for Digital Television,'' were 
approved by ATSC's membership on November 4, 2009.
---------------------------------------------------------------------------
    \1\Federal Communications Commission, In the Matter of Amendment of 
Part 73 of the Commission's Rules and Regulations to Eliminate 
Objectionable Loudness of Commercial Announcements and Commercial 
Continuity over AM, FM and Television Broadcast Stations, BC Docket No. 
79-168, 1984 FCC LEXIS 2425 (June 27, 1984).
---------------------------------------------------------------------------

                         Summary of Provisions

    S. 2847 would require the FCC, within one year of enactment 
of the bill, to prescribe a regulation limited to incorporating 
by reference the ATSC report ``ATSC Recommended Practice: 
Techniques for Establishing and Maintaining Audio Loudness for 
Digital Television.'' In addition, the bill would provide for a 
process at the FCC to provide waivers to television broadcast 
stations, cable operators, or other multichannel video 
programming distributors for whom complying would entail a 
financial hardship.

                          Legislative History

    S. 2847 was introduced by Senator Whitehouse and Senator 
Schumer on December 8, 2009. The Senate Committee on Commerce, 
Science, and Transportation reported S. 2847 favorably, as 
amended, on June 9, 2010. The Committee approved a substitute 
amendment from Senator Rockefeller that makes minor technical 
adjustments regarding the availability of waivers.

                            Estimated Costs

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and section 403 of the 
Congressional Budget Act of 1974, the Committee provides the 
following cost estimate, prepared by the Congressional Budget 
Office:

                                                      July 2, 2010.
Hon. John D. Rockefeller IV,
Chairman, Committee on Commerce, Science, and Transportation,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2847, the CALM Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie, 
who can be reached at 226-2860.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

S. 2847--CALM Act

    S. 2847 would require the Federal Communications Commission 
(FCC) to adopt, within one year of enactment, an industry-
created standard capping the volume level of television 
commercials and equalizing the volume between advertisements 
and other television programming. CBO estimates that 
implementing S. 2847 would have no significant effect on the 
federal budget. Enacting S. 2847 would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures would 
not apply.
    S. 2847 would impose an intergovernmental and private-
sector mandate as defined in the Unfunded Mandates Reform Act 
(UMRA) by requiring television broadcast stations, cable 
operators, and other distributors of television programming to 
meet the proposed standard. The cost to those entities would 
depend on the method used to comply with the mandate. According 
to information from industry sources, the cost of equipment 
that controls the volume of programming ranges from a few 
thousand dollars to about $20,000 per device. Based on 
information from the FCC and industry sources, CBO expects that 
several thousand entities would have to comply with the 
mandate. Because a small number of those entities are publicly 
owned, CBO estimates that the aggregate cost to public entities 
would be small and would fall below the annual threshold 
established in UMRA for intergovernmental mandates ($70 million 
in 2010, adjusted annually for inflation). CBO estimates that 
the aggregate cost to private entities would total at least 
tens of millions of dollars but would probably fall below the 
annual threshold established in UMRA for private-sector 
mandates ($141 million in 2010, adjusted annually for 
inflation).
    On December 9, 2009, CBO transmitted a cost estimate for 
H.R. 1084, the CALM Act, as ordered reported by the House 
Committee on Energy and Commerce on November 19, 2009. The two 
bills are similar and the CBO cost estimates are the same.
    The CBO staff contacts for this estimate are Susan Willie 
(for federal costs), Elizabeth Cove-Delisle (for the state and 
local impact), and Amy Petz and Sam Wice (for the private-
sector impact). The estimate was approved by Peter H. Fontaine, 
Assistant Director for Budget Analysis.

                      Regulatory Impact Statement

    In accordance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee provides the 
following evaluation of the regulatory impact of the 
legislation, as reported:

                       NUMBER OF PERSONS COVERED

    S. 2847 would affect television broadcast stations, cable 
operators and other multichannel video programming 
distributors.

                            ECONOMIC IMPACT

    S. 2847 would not have a significant impact on the nation's 
economy. CBO estimates that the aggregate cost to private 
entities would total at least tens of millions of dollars but 
would probably be less than $140 million annually.

                                PRIVACY

    S. 2847 is not expected to have an adverse effect on the 
personal privacy of any individuals that will be affected by 
this legislation.

                               PAPERWORK

    S. 2847 would have minimal or no impact on current 
paperwork levels.

                   Congressionally Directed Spending

    In compliance with paragraph 4(b) of rule XLIV of the 
Standing Rules of the Senate, the Committee provides that no 
items contained in the bill, as reported, meet the definition 
of congressionally directed spending items under the rule.

                      Section-by-Section Analysis


Section 1. Short title

    This section would provide that the legislation may be 
cited as the Commercial Advertisement Loudness Mitigation Act.

Section 2. Rulemaking on loud commercials required

    Subsection 2(a) of the bill would require the FCC to 
promulgate rules within one year of the date of enactment of S. 
2847. Any FCC rules must be limited to incorporating by 
reference the ATSC standard ``ATSC Recommended Practice: 
Techniques for Establishing and Maintaining Audio Loudness for 
Digital Television'' concerning the loudness levels of 
commercial advertisements, accompanying any video programming 
shown by a television broadcast station or distributed by a 
MVPD. Pursuant to the bill, television broadcast stations, 
cable and direct broadcast satellite (DBS) operators, and other 
MVPDs would be required to install and maintain equipment that 
is compliant with the ATSC Recommended Practice. After initial 
installation, the Committee expects that stations and MVPDs 
will use commercially reasonable efforts to maintain equipment 
and to repair or replace malfunctioning equipment. The FCC 
should presume that an entity is in compliance with its rule 
where the entity can demonstrate that it has properly installed 
and is properly maintaining all needed equipment. Stations that 
fail to timely install equipment, fail to maintain it, or--in 
the event of a malfunction--fail to repair such equipment in a 
commercially reasonable and timely manner shall be subject to 
fines and penalties as determined by the FCC.
    Section 2(b) of the bill would require that the rule 
prescribed by the FCC become effective one year after the date 
the FCC adopts it. It would allow the FCC to grant a one-year 
waiver of the rule to those entities demonstrating that 
compliance would cause them financial hardship. The Committee 
intends for the FCC to interpret ``financial hardship'' broadly 
and to take into account, for example, the fact that television 
broadcast stations in smaller markets and smaller cable systems 
may face greater challenges budgeting for the purchase of 
equipment to comply with the bill than television broadcast 
stations in larger markets or larger cable systems. The FCC 
should not require stations or MVPDs to demonstrate that they 
have negative cash flow or are in receivership for bankruptcy 
to be eligible for a waiver based on financial hardship. The 
FCC may renew waivers for one additional year. This section of 
the bill also would clarify that nothing in this section 
affects the FCC's authority under section 1.3 of its rules (47 
CFR 1.3) to waive any rule required by the bill, or the 
application of any such rule, for good cause shown to a 
television broadcast station, cable operator, or other MVPD, or 
to a class of such stations, operators, or distributors.
    Section 2(c) of the bill would define the terms television 
broadcast station, cable operator, and multichannel video 
programming distributor as those terms have been defined 
elsewhere in the Communications Act of 1934.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill as reported would make no change to existing law.