Justice Department To Review ASCAP And BMI Regulatory Agreements
June 4, 2014 at 3:29 AM (PT)
The JUSTICE DEPARTMENT will announce TODAY (6/4) that it will "review the 73-year-old regulatory agreements that govern ASCAP and BMI, two groups that act as licensing clearinghouses for a range of outlets that use music, including radio stations, websites and even restaurants and doctors’ offices," reports THE NEW YORK TIMES. The legal battle is described as a lobbying fight between music companies and songriters on one side, and webcasters and streamers like PANDORA and GOOGLE on the other.
ASCAP and BMI contend they are having trouble collecting fair rates for their music in the digital age.
THE TIMES notes, "the JUSTICE DEPARTMENT’s review calls for a 60-day period for public comments about the consent decrees. The department could then recommend changes to regulation, which would be reviewed by judges in the U.S. District Court for the Southern District of NEW YORK, in MANHATTAN. According to the consent decrees, which were instituted in 1941 after federal antitrust investigations, ASCAP and BMI cannot refuse licenses to music outlets that request them, and their agreements are subject to approval by two federal judges. They have operated under this structure for decades, but in recent years have lost important legal cases having to do with licensing; this year ASCAP lost in a rate-setting trial against PANDORA in which several prominent music publishing executives were criticized harshly by the judge. In response, major publishers like SONY/ATV and UNIVERSAL have begun to openly discuss withdrawing from ASCAP and BMI, a move that would weaken the performing rights groups and further complicate the licensing process."
ASCAP said that “the antiquated ASCAP and BMI consent decrees must be updated, if not eliminated.” Both ASCAP and BMI are expected to ask the JUSTICE DEPARTMENT for more flexibility in licensing. They would prefer the rate-court process be replaced by arbitration.