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.