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ASCAP, BMI Music Licensing Consent Decrees Stir Debate

NAB would like the Justice Department to keep intact the consent decrees governing music performance licensing rates that ASCAP and BMI charge radio.

The consent decrees “provide important protections for licensees from potential anticompetitive behavior by the performance rights organizations,” stated NAB this week in comments filed with the DOJ’s Antitrust Division.

“The aggregation of rights gives the PROs tremendous market power, which in the absence of the consent decrees would allow the PROs to extract supracompetitive pricing for their licenses,” said NAB in the filing.

“Radio and television broadcasters lack control, in certain instances, over the particular songs that are broadcast. Even with respect to programming created by broadcasters, each of the PROs has aggregated such a large repertory that there is often no practical way to avoid playing music licensed by each of the PROs.”

NAB also urged the DOJ to not amend the consent decrees to allow some music publishers to selectively withdraw their catalogs from the PROs for some licensees but not for others; if they’re allowed to do that some music publishers could discriminate against some licensees to extract exorbitant fees, according to the broadcast lobby.

If the DOJ decides to amend the consent decrees, NAB said, then it should focus on requiring greater transparency by ASCAP and BMI.

ASCAP and BMI seek to have the consent decrees relaxed, saying they’re outdated. ASCAP “welcome[s] the opportunity to update our music licensing system to better reflect how people listen to music today,” said ASCAP President/Chairman/songwriter Paul Williams.

ASCAP outlined three updates it believes are critical to make the music licensing system work more efficiently for music creators, licensees and listeners in the digital age:

  • Allowing ASCAP to accept a limited grant of rights from its members, meaning ASCAP is able to license certain uses while the rights holders handle others directly. Allowing greater flexibility is necessary to hold the system together
  • Replacing the rate court with a faster, cheaper dispute resolution process
  • Permitting ASCAP to offer all the rights in a music composition a licensee needs to operate their business — something that ASCAP’s competitors are already free to do

BMI President/CEO Mike O’Neill said the DOJ’s request for comments on music licensing “facilitates an industry-wide open dialogue needed for critical reforms.”

BMI’s points also fall into three main categories:

  • Digital Rights Withdrawal: Allow publishers to give BMI the right to license works for certain uses, while permitting publishers to retain the exclusive right to license works for other defined, digital uses. This will enable BMI to offer easy, efficient access to the wide-ranging repertoire for many traditional music uses, while allowing publishers and music users the opportunity to negotiate their own free-market digital deals
  • Bundling Rights: Clarify the decree to allow BMI to license not just the public performing right, but any rights relating to the musical work that a music user needs to bring its product or service to the public. This will create a “one-stop” licensing source to meet the needs and match the pace of the digital marketplace
  • Arbitration: Move the rate-setting forum from federal court to a binding arbitration model. Music users will be assured of a rate-setting mechanism to resolve disputes, but one that’s quicker and less expensive for all parties

Consumer group Public Knowledge urged the DOJ to protect competition in music licensing. Regarding allowing any digital rights withdrawal, PK Senior Staff Attorney Jodie Griffin said, “If we look to the publishers’ attempt to withdraw some of their rights from the PROs, we can see how the publishers have the incentive and ability to coordinate instead of compete. Similarly, in negotiations for sound recording licenses with record labels that do not operate under consent decrees, we have seen how market consolidation can lead to the largest rights holders leveraging their market power against new services, independent artists and consumers. The Department of Justice should now ensure the consent decrees continue to protect competition in the music licensing market.”