Broadcasters Support Anticipated Government Conclusions In Antitrust Review Of ASCAP And BMI Consent Decrees
July 22, 2016 at 7:42 AM (PT)
THE RADIO MUSIC LICENSING COMMITTEE (RMLC) commented TODAY (7/22), writing, "THE DEPARTMENT OF JUSTICE, after lengthy and thorough review, decides that ASCAP and BMI consent decrees should not be altered, as they continue to serve as a vital check against ASCAP’s and BMI’s anticompetitive market power."
While the DOJ decision isn't official -- yet -- THE RMLC noted, "after years of investigation into possible additional modifications to the decrees, the Division concluded that the decrees are not outdated, because the threat posed by ASCAP’s and BMI’s aggregated market power is as real today as it ever was. The Division agreed with licensees that ASCAP and BMI continue to wield sufficient market power requiring the continued application of the consent decrees and oversight of the DEPARTMENT OF JUSTICE.
"Faced with the threat of being 'held up' by the major publishers based on asserted 'fractional' shares, media licensees argued — and the Division agreed — that the licenses historically granted by ASCAP and BMI to users do not limit the rights granted to licensees to “fractional” interests in compositions. Rather, they grant licensees the right to perform all the compositions in the ASCAP and BMI repertoires, whether the compositions are owned entirely by members of the same PRO or by co-owners affiliated with different organizations. The Division made clear it was not altering the status quo in rejecting the PRO and publisher argument that ASCAP and BMI licenses conveyed only 'fractional' grants of rights. The Division stated that requiring an ASCAP and BMI licensee to undergo the arduous process of confirming that it had secured separate licenses for every fractional interest in every work within its programming before using the work would be incompatible with ASCAP’s and BMI’s obligations, as articulated by the U.S. SUPREME COURT, to provide 'immediate, indemnified access' to all the works in their repertories. The Division noted, as well, that the PRO and publisher arguments were contradicted by prior case authorities, notably the BUFFALO BROADCASTING case from the 1990s and the more recent decisions of both rate court judges in the PANDORA cases (and affirmed by the Second Circuit Court of Appeals) which supported the view that the PROs are obligated to offer licenses to all works in their repertories."
The NAB said representatives of local radio and television broadcasters expressed support for the DEPARTMENT OF JUSTICE’s (DOJ) expected conclusions in its multi-year review of antitrust consent decrees regulating two of the nation’s largest music performing rights organizations in comments filed last week.
The review concluded that no modifications were warranted to the decrees affecting the songwriter royalties collected by AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS (ASCAP) and BROADCAST MUSIC, INC. (BMI), and that ASCAP and BMI should continue to offer licenses that provide broadcasters and other users full rights to the musical works in those licensing organizations’ repertories. Under the current system, radio broadcasters pay $350 million, and local television broadcasters some $150 million, to songwriters and their music publishers every year.
Music industry interests have contended in recent public statements that the DOJ’s conclusions represent a radical departure from past practice that will disrupt the orderly licensing of music performance rights. Contrary to these claims, the broadcasters point out in their filing that their ASCAP and BMI licenses have conveyed the right to perform, without limitation, all of the works in those licensing organizations’ repertories for decades, in line with the similarly broad grants of license authority ASCAP and BMI have obtained from the owners of the musical works.
In their comments, the broadcasters concluded that, “there is no reason to anticipate the kind of license turmoil” predicted by the music industry in the future. Instead, local radio and television broadcasters remain prepared to carry on business as usual: negotiating and entering into the same forms of license arrangements they have always maintained, and providing fair compensation to music copyright owners."
“The Government’s conclusions reinforce our position that the current music performing rights license system is not ‘broken,’ as some in the music industry have falsely portrayed it. It has functioned well overall,” stated TELEVISION MUSIC LICENSE COMMITTEE Chairman CHARLES SENNET, one of the commenters. “We look forward to a continuing honest dialog with ASCAP, BMI and others in the industry to preserve broadcasters’ access to music and serve the interests of music creators, publishers and users alike.”
“AMERICA’s hometown radio and television broadcasters applaud the JUSTICE DEPARTMENT’s apparent conclusion not to modify the ASCAP and BMI consent decrees after a careful and thorough review,” said NAB Pres./CEO GORDON SMITH. “Contrary to reports otherwise, this expected decision maintains the fundamental antitrust safeguards for the licensing of musical works – to the benefit of copyright owners, users, and consumers – and does not jeopardize the longstanding and successful relationship that broadcasters have had with ASCAP, BMI, and the copyright owners they represent. Indeed, broadcasters do not expect this decision to reduce the more than $500 million in royalties that television and radio broadcasters pay each year to the composer and songwriting communities.”