House Judiciary Members Divided on DOJ's PRO Consent Decrees Decision
A bipartisan letter from leading House Judiciary Committee member James Sensenbrenner, R-Wis., and five other House members to DOJ supporting the Antitrust Division’s final decision in its review of the American Society of Composers, Authors and Publishers and Broadcast Music Inc. consent decrees illustrates the challenges opponents of the decision will face in getting support on Capitol Hill, music industry lobbyists told us. ASCAP is leading the lobbying side of a coordinated campaign with BMI to challenge the consent decrees decision, while BMI challenged the decision in U.S. District Court in New York. Antitrust said in a concluding statement last week that it decided against altering the existing consent decrees to allow music publishers to partially withdraw from the decrees and issued language clarifying that the department continues to believe the existing decrees mandate 100 percent licensing (see 1608040066).
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Sensenbrenner and the five other House members lauded DOJ’s consent decrees decision in a letter Monday to Attorney General Loretta Lynch, saying “upholding the decrees with no modification is appropriate at this time. Further, we support” DOJ’s clarification on 100 percent licensing. The other signatories on the letter were: Reps. Suzan DelBene, D-Wash., Blake Farenthold, R-Texas; Gene Green, D-Texas; Jared Polis, D-Colo.; and Dave Trott, R-Mich. DelBene, Farenthold and Sensenbrenner are on the House IP Subcommittee. NAB, which supports DOJ’s decision, posted the letter online Tuesday.
“Preserving the decrees as currently written will protect licensees acting in good faith, ensure that music is performed legally, and see that creators are compensated for their work,” the congressmen said. “So-called ‘fractional licensing’ would hamstring the music marketplace. … Were the [DOJ] to propose modifying the consent decrees to allow fractional licensing, it would paralyze the market for licensed music.” The Sensenbrenner-led letter appears to be in direct conflict with the position of House IP Vice Chairman Doug Collins, R-Ga., and four other subcommittee members, who jointly urged the DOJ in July to “independently review” its consent decrees decision (see 1607200075). Collins’ office didn’t comment on the Sensenbrenner letter but a spokeswoman noted Collins’ disappointment with DOJ’s handling of its decision.
Assistant Attorney General Peter Kadzik dismissed the Collins-led request Monday, telling Collins in a letter we obtained that Antitrust’s “thorough investigation” of the consent decrees involved sufficient input from “dozens of stakeholders involved in all aspects of the music licensing business.” Antitrust’s decision “does not alter the ability of co-owners to impose contractual limitations on one another’s ability to license a co-owned work,” Kadzik said. “Rather, [Antitrust’s] conclusions clarify what the consent decrees have always required so that any practices that have developed that are inconsistent with those requirements can be adjusted accordingly.” Antitrust’s decision addresses “issues of antitrust law and interpretation of the antitrust consent decree, and its conclusions are not inconsistent with the Copyright Act” despite the Copyright Office’s stated opposition to 100 percent licensing, Kadzik said. “We disagree with their response, and the decision overall,” Collins’ spokeswoman said.
BMI’s court challenge to the DOJ decision appears to be a “stronger bet” than ASCAP’s lobbying push because House Judiciary isn’t likely to prioritize legislation aimed at addressing the consent decrees given the lack of consensus on a solution, an industry lobbyist told us. The division of opinion among House Judiciary members about the fundamentals of the DOJ review, as illustrated in the Collins and Sensenbrenner letters, mirrors the widening divide among stakeholders on the issue, the lobbyist said. House Judiciary Chairman Bob Goodlatte, R-Va., showed an interest in music licensing issues as part of the committee’s Copyright Act review, but he clearly indicated he would devote his attention to copyright-related issues on which a consensus solution is possible, the lobbyist said.
The Sensenbrenner letter is essentially “window dressing” that doesn’t necessarily signify a shift in the likelihood of the consent decrees being addressed through legislation, said music industry attorney Chris Castle. “There would have been a fight anyway.” Castle likened the situation to the debate over the Local Radio Freedom Act (House Concurrent Resolution 17/Senate Concurrent Resolution 4), which opposes new performance fees, taxes, royalties or other charges on local broadcast radio stations. It’s difficult to gauge how stakeholders would react to legislation aimed at the ASCAP/BMI consent decrees without knowing the bill’s details, a communications sector lobbyist told us. “Does that mean creating a new compulsory licensing regime? Does it completely replace the need for the performing rights organizations and the consent decrees that govern them? I’m not sure that ASCAP and BMI would think it’s in their best interest to be replaced in the government construct.”