ascap antitrust consent decree

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In the United States, performing rights in musical compositions (or “musical works” as the Copyright Act refers to them – the words and music of a song) are generally licensed by a “performing rights organization” or a “PRO.”  The U.S., unlike most countries where there is a single organization that collects these royalites, has multiple such organizations.  The recent doubling in the number of PROs triggered the Copyright Office to initiate a Notice of Inquiry last week requesting public comment on issues related to these organizations.  What are the issues that led to this inquiry? 

As set out in the Notice, in the U.S., performance rights in musical compositions have for over 80 years been licensed by three PROs – ASCAP, BMI, and SESAC.  Yet, since 2013, three new PROs have begun (GMR, PRO Music, and AllTrack).  These new PROs are not all equal. GMR has compiled a roster of songwriters who wrote many well-known songs in many different musical genres, and it has aggressively pursued royalties for the music in their repertoire – see, for instance, our articles here and here on their aggressive efforts to compel the radio industry to pay royalties.  PRO Music, while it has sought to receive licenses from various businesses, is a newer organization with music that appears to be concentrated in certain musical genres.  AllTracks is the newest of the PROs and, at this time, their licensing strategy remains to be seen. 

With at least six PROs representing composers of musical works in existence, Congress has received complaints that businesses using music have been confused by demands for royalty payments from these new organizations, accompanied by threats of lawsuits if royalties are not paid.  The Notice of Inquiry does not even note that the landscape is even more complicated, as there are additional PROs claiming rights in the underlying compositions in spoken word recordings – see our article here – and, from time to time, PROs arise that purportedly represent certain foreign-language recordings.  There is, no doubt, confusion among those who publicly perform music and need to be licensed to play that music about who they have to pay, and what these users are getting when they pay their royalties. Continue Reading Copyright Office Commences an Inquiry into the Proliferation of Performing Rights Organizations – Looking at the Complexity of Licensing Musical Works in the United States

In recent weeks, some of the radio trade magazines have been carrying coverage of the litigation between the Radio Music License Committee (RMLC) and ASCAP and BMI over the rates that will be paid by commercial radio broadcasters for the public performance of musical compositions that are licensed through these Performing Rights Organizations (PROs).   Negotiations over royalty rates are not new nor is the occasional litigation over those royalties However, because of changes in the law governing these processes, the arguments raised this year  are different and raise important new questions about what could be the first steps toward an entirely different, and perhaps fairer, process for resolving the royalties that broadcasters (and others) pay for the use of music.

What is different, and what are the arguments being made?  RMLC is arguing that the US District Court that oversees the antitrust consent decrees that govern ASCAP and BMI should consolidate the proceedings to determine the rates that broadcasters will pay, rather than considering those rates in separate proceedings.  If parties cannot agree with ASCAP and BMI as to the rates to be charged for the use of music for a particular purpose, a judge from the US District Court in the Southern District of New York conducts a proceeding as a “rate court” to determine a reasonable royalty rate, much as the Copyright Royalty Board does in establishing SoundExchange royalties for the digital public performance of sound recordings.  Because both the ASCAP and BMI agreements with the commercial radio industry have expired, proceedings are underway to determine the rates that radio will pay to these organizations. Continue Reading RMLC Requests Consolidation of ASCAP and BMI Proceeding on Radio Music Royalties – A Step Toward a Unified Process for Resolving All Music Royalty Issues? 

Here are some of the regulatory developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.

  • President Joe Biden named Jessica Rosenworcel as Acting Chair of the FCC, where she will set the agenda for the

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In 2019, the Antitrust Division of the US Department of Justice began a review of the court-administered antitrust consent decrees that have bound ASCAP and BMI since the 1940s.  We wrote about the issues in their review here.  The formal review of these decrees began as part of the DOJ’s broader review of its antitrust consent decrees covering many different industries.  The DOJ received almost a thousand comments on the questions that it asked about the ASCAP and BMI decrees.  It also held public roundtables as well as private discussions with interested parties during its review.  Last week, Makan Delrahim, the outgoing head of the Antitrust Division, presented remarks at a Vanderbilt Law School virtual event where he said that the review would be ending without any proposals for reform.  While the statement notes some of the reforms that were sought by the music industry, it also notes that music users around the country rely on the systems established under the decrees and judge them to be working well.  Mr. Delrahim’s statement says that because of the complexity of the issues and the interruptions caused by the pandemic, no reforms would be offered at this time, but it urged the DOJ to continue to review these decrees on a regular basis – at least once every five years.

This action is significant for broadcasters and other music users as it leaves in place these consent decrees that are the basis on which so many businesses use music in their day-to-day operations.  Given the volume of music they have under license, most businesses do not have an alternative to using the blanket licenses offered by these organizations.  The only alternative would be to license the music themselves which, due to the complexity of the copyright laws and the lack of transparency in music ownership, would be exceedingly difficult for a business where music is but a secondary component to their operations.  Together, ASCAP and BMI provide a license to broadcasters and other music users (including any business that performs music to the public, such as bars and restaurants, retail stores, digital music services, concert venues, hotels and so many other locations).
Continue Reading DOJ Ends its Review of ASCAP and BMI Consent Decrees – For Now…What Does it Mean?

Here are some of the regulatory developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how these actions may affect your operations.  We also note an upcoming event to which broadcasters will want to pay attention.

  • After a multi-year review of the

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It has been a busy week for regulatory actions affecting broadcasters.  Here are some of the significant developments of the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC held a virtual Open Meeting on Tuesday, voting to approve an

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Here are some of the regulatory and legal developments of the last week of significance to broadcasters – and a look ahead to the FCC’s consideration of two media modernization items in the coming week.  Links are also provided for you to find more information on how these actions may affect your operations.

  • This week,

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The Department of Justice’s Antitrust Division is, as we reported here and here, conducting a review of the consent decrees which govern ASCAP and BMI. Comments were filed in August, and those comments have now been posted to the Division’s website and are available for review here (they are organized alphabetically in groups…

Once upon a time, August was a quiet month in Washington, when everyone went on vacation. Sure, there are plenty of vacations that will happen this coming month, but it seems that regulatory activity no longer takes a break. For example, August 1 is the due date for the filing with the FCC of license renewals for all radio stations (including translators and LPFM stations) in North and South Carolina, and the filing of associated EEO forms for all full power radio stations in those states. With the renewal filing comes the obligation that these stations start airing, on August 1 and August 16, their post-filing announcements informing the public about the submission of the license renewal applications. Radio stations in Maryland, Virginia, West Virginia and the District of Columbia, who filed their renewals on or before June 2, also need to keep running their post-filing announcements on these same dates. Radio stations in Florida, Puerto Rico and the Virgin Islands, who are in the next license renewal group with their renewal applications to be filed by October 1, need to start broadcasting their pre-filing announcements this month, also to run on the 1st and 16th of the month. See our post here on pre-filing announcements.

Commercial and noncommercial full power and Class A Television Stations and AM and FM radio stations in California, Illinois, North Carolina, South Carolina, and Wisconsin that are part of an employment unit with five or more full-time employees must place their annual EEO public inspection file reports in their online public file. Links to those reports should also be placed on the home pages of these station’s websites, if they have a website. The effectiveness of these EEO public file reports, and the EEO programs of which they are a part, are being reviewed by the FCC in a proceeding started by a Notice of Proposed Rulemaking about which we wrote here. Comments on this notice asking for suggestions about how to make the EEO rules more effective are due August 21, with reply comments due by September 5.
Continue Reading August Regulatory Dates for Broadcasters – License Renewals, EEO, Music Consent Decree Comments, EAS Test, LPFM NPRM and More

In a very important proceeding we summarized here, the Department of Justice’s Antitrust Division is reviewing the antitrust consent decrees that govern ASCAP and BMI – the decrees that require that these performing rights organizations treat similarly situated licensees (and artists) in the same way and which allow a Court to review the reasonableness…