The USDepartment of Justice has started the process of reviewing the 850+ submissions that were made during the consultation about the future of the consent decrees governing US music rights organisations American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI). The consultation closed on August 9 and the DoJ should render its verdict by the end of this year.
The consultation saw contributions from all sides of the industry and beyond, with music licensees in favour of a status quo regarding the decrees, while rights holders and performance rights organisations prefering an adaptation or the disappearance of the decrees.
Many submissions point out that the regulatory, technological and economic environment has significantly evolved since both ASCAP and BMI's respective consent decrees were enacted in 1941. PROs now have to deal with the likes of Google, Appleand Amazon in addition to the traditional licensees such as radio and TV broadcasters and businesses using music. The market has also seen new for profit PROs such as SESAC and Global Music Rights operating in the US.
Modernising the decrees
"ASCAP and BMI have transitioned from Goliath to David," wrote theRecording Academyin its contribution. "It’s absurd to suggest that ASCAP and BMI need to be constrained against these titans of industry.” ASCAP CEO Elizabeth Matthews concurred, “The way music is made and consumed has changed dramatically since the ASCAP and BMI consent decrees were implemented nearly eight decades ago. The time has come to modernise these decrees so we can move toward a more innovative, flexible, and competitive marketplace that is fair to both music creators and licensees.”
ASCAP and BMI, in their respective submissions, recommended that in order to "help facilitate [an] orderly transition, and to protect both music creators and licensees alike" there should be four new provisions "that would encompass newly formed decrees."
The four provisions include: Allowing all music users to continue to have automatic access to the ASCAP and BMI repertoires with the immediate right of public performance, contingent upon licensees providing ASCAP and BMI with necessary business information and an automatic, fairer, and less costly mechanism for the payment of interim fees; retaining the rate court process for resolution of rate disputes, as recently reformed by the Music Modernisation Act (MMA); continuing to receive non-exclusive US rights from writers and publishers, which would allow licensees, songwriters, composers and publishers "to continue to negotiate direct deals if they so choose"; and preserving "the current forms of licenses that the industry has grown accustomed to beyond the traditional blanket license, such as the adjustable fee blanket license and the per-program license.”
Chaos without decrees
The main opponents to relaxing the decrees are organisations such as the National Association of Broadcasters and well as representatives from hotels, bars and other businesses using music. The MIC Coalition, which regroups most of these organisations, claimed that the decrees "are as important today as ever and should be preserved without modification." In a statement, the coalition said: "The music marketplace has been built around these consent decrees and if they are terminated or sunset without first establishing a new legal framework to protect these businesses and other licensees, chaos will result."
Some submissions were somehow ironic. A coalition of self-declared "free market organisations" (such as Americans for Limited Government, Center for Freedom & Prosperity, Institute for Liberty or Less Government) wroteto Attorney General William Barr to "raise serious concerns regarding the possible termination, sunset or significant changes" to the antitrust consent decrees between the DoJ and ASCAP and BMI. For these organisations,ASCAP and BMI consent decrees "remain extremely relevant to a functioning marketplace" since the market for music licenses "is inherently anti-competitive, and traditional free market principles do not necessarily translate."
Consumer advocacy group Public Knowledge also filed comments urging the Department of Justice to maintain its consent decrees. PK's Policy Counsel Meredith Rose, said: “Without robust competition in the music licensing market, consumers could face higher prices, less choice, and an increase in licensing costs that could render many vibrant public spaces silent. In the absence of a truly competitive market in which PROs compete to attract services and other licensees, the consent decrees must remain in place to prevent ASCAP and BMI from abusing their substantial market power.”