Graham Seeks DOJ Meeting Before Decision on ASCAP/BMI Consent Decrees

Senate Judiciary Committee chair Sen. Lindsey Graham (R-S.C..) has asked the Justice Department to hold off on lifting the consent decrees on music licensing groups ASCAP and BMI until he has had a chance to discuss them with antitrust chief Makan Delrahim.

The decrees affect how those organizations collect fees from programmers and distributors for music in their content.

In a letter this week to Delrahim, Graham said the decrees appeared still to be working well. 

According to Justice, which struck the decrees with the organizations back in 1941, 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 t o“those compositions, the right of public performance of which [BMI] has or hereafter shall have the right to license or sublicense.” The Second Circuit Court of Appeals in 2015 ruled, in the Pandora decision, that ASCAP is “required to license its entire repertory to all eligible users.”

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“The purpose of my letter is not to prejudge the outcome of your review, but rather to express my concern that moving to terminate or even sunset the ASCAP & BMI consent decrees, without first working with my committee and the Congress as a whole to establish an alternative licensing framework, could severely disrupt the entire music licensing marketplace," said Graham.

President Trump signaled last October, when signing the Hatch-Goodlatte Music Modernization Act into law, that if the DOJ review of the consent decrees leads to a decision to lift them, he would try to provide notice to Congress, but was giving no guarantees depending on the circumstances. 

The bill 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 almost a year ago that his division was taking a fresh look, and with a fairly critical eye, at the consent decrees—they date from 1941—under which performance royalty organizations (PROs) collect their fees.

Justice also reviewed the decrees in 2015.

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.

Graham does not say that the decrees are the perfect solution to the current marketplace, but he wants a committee staff-level discussion that includes licensors and licensees before Justice takes any action.

This story has been revised. It originally misidentified the letter as from former Alabama senator and attorney general Jeff Sessions.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.