The Justice Department has officially launched its latest review of the 75-year-old consent decrees with The American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI), which collectively handle music licensing and fees for music on video and audio platforms .
The decrees circumscribe how they can license rights to public performances, but Justice, as it had earlier signaled, is reviewing those agreements to see if they should be maintained as is, terminated or modified (as the 1941 decrees have been before, ASCAP most recently in 2001 and BMI in 1994.
The decrees "require ASCAP and BMI to issue licenses covering all works in their repertory upon request from music users. If the parties are unable to agree on an appropriate price for a license, the decrees provide for a “rate court” proceeding in front of a U.S. district judge."
Antitrust chief called it the latest in a series of necessary reviews of the decrees. "It is important for the Division to reassess periodically whether these decrees continue to serve the American consumer and whether they should be changed to achieve greater efficiency and enhance competition in light of innovations in the industry," he said.
The ASCAP decree requires it to “grant to any music user making a written request therefor a non-exclusive license to perform all of the works in the ASCAP repertory...." The BMI decree requires that BMI licenses provide access to those compositions, the right of public performance of which [BMI] has or hereafter shall have the right to license or sublicense.” The 2nd U.S. Circuit Court of Appeals in 2015 ruled, in the Pandora decision that ASCAP is “required to license its entire repertory to all eligible users.”
President Donald Trump signaled last October, when signing the Hatch-Goodlatte Music Modernization Act into law (it updated the music licensing framework for the digital age and provided congressional oversight of the Justice consent decree review, that if the DOJ review leads to a decision to eliminate them, he would try to provide notice to Congress, but was giving no guarantees, depending on the circumstances.
The bill also provided for congressional overnight of the Justice Department review of the long-standing consent decrees. Graham wants to do some of that overseeing.
Delrahim had signaled a year ago that his division was taking a fresh look at the decrees, and with a fairly critical eye, at the decrees. Justice also reviewed the decrees in 2015, under a previous Administration, but left them in place.
One of the key issues is whether music licensing organizations can collect fees for fractional rights under blanket licenses. The court concluded that the decrees neither required full licensing of musical works nor prevented fractional licensing. Fractional licenses are works with multiple authors using different licensing organizations, so, say, BMI has some fraction, rather than all, of the rights.
Justice is seeking outside stakeholder input as part of the review. That public comment period closes July 10.
ASCAP and BMI have already proposed a modification to interim, time-limited consent decrees which it noted in commenting on the launch of the review Wednesday: “The DOJ’s long-anticipated review of the BMI and ASCAP consent decrees and call for public comment represent an opportunity to do what BMI has been advocating for years – modernize music licensing," it said. "BMI and ASCAP have already issued an open letter in which we share a proposed solution for the industry that will benefit music creators and licensees alike. We look forward to working with the DOJ, licensees and our other music partners to help ensure a smooth process that safeguards a vibrant future for music.”
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