Collins Exploring Possible Legislation on DOJ ASCAP/BMI Consent Decrees Decision
House IP Subcommittee Vice Chairman Doug Collins, R-Ga., has been collecting stakeholder feedback in recent weeks on possible legislation or other actions to address the DOJ Antitrust Division's decision in its review of the American Society of Composers, Authors and Publishers and Broadcast Music Inc. consent decrees. Justice said earlier this month it decided against altering the existing decrees to allow music publishers to partially withdraw from the agreements, and issued language clarifying the department continues to believe the existing documents mandate 100 percent licensing (see 1608040066). Collins' pursuit of further action on DOJ's decision follows an earlier call for the department to “independently review” the finding's impact on the music marketplace, which Justice left unaddressed (see 1607200075 and 1608090054).
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Collins told us he's “still judging” how to deal with DOJ's finding but said there may be a need to reverse the 100 percent licensing language. “The DOJ just ignored what is going on in the industry and disregarded” the Copyright Office's February report opposing a 100 percent licensing mandate (see 1602260034), Collins said. “We're not looking at this as a way of doing away with [the consent decrees] but I think there is a lot of concern” about how Justice's action will affect the music industry, he said.
Legislative language on the decision could be introduced as a stand-alone bill or as part of an updated version of the Songwriter Equity Act (HR-1283/S-662), Collins told us. HR-1283/S-662, of which Collins is the lead House sponsor, would amend sections 114 and 115 of the Copyright Act to allow the Copyright Royalty Board to consider “all relevant evidence” when determining royalty rates and would change the rate standard for mechanical royalties (see 1503040063). “Frankly, there are some issues that we're working on that would benefit both the digital and songwriter communities” that would make sense as part of an updated HR-1283, Collins said.
Nashville Songwriters Association International Executive Director Bart Herbison told us he met with Collins several times before and since Justice's announcement, but they haven't discussed specific legislative language. NSAI is seeking legislation that would allow ASCAP and BMI to continue employing fractional licensing and not mandate 100 percent licensing, Herbison told us. “There are different ways of accomplishing that, but at the end of the day they would accomplish the same goal.” NSAI also met with Sens. Bob Corker, R-Tenn., Lamar Alexander, R-Tenn., and Reps. Marsha Blackburn, R-Tenn., and Hakeem Jeffries, D-N.Y., on the group's concerns about DOJ's decision, Herbison said.
“I think there could be potential to successfully do something here, whether it's narrowly getting rid of the 100 percent licensing element, or more broadly including reforms that allow for bundling of mechanicals with performance royalties and moving rate setting to the CRB,” a music industry lobbyist told us. “Services and broadcasters have got to be figuring out that 100 percent licensing potentially creates tons of problems for them too, that fracturing and inefficiency and chaos doesn't only hurt songwriters and publishers.” Race-to-the-bottom rate shopping “might sound good to the hotel and restaurant people until they realize they may end up having to license up with six or more entities if 100 percent licensing creates an exodus from the big” performing rights organizations like ASCAP and BMI, the lobbyist said.
The Computer & Communications Industry Association, which supported DOJ's decision, is aware of Collins' exploration of further action on the consent decrees but hasn't spoken with his office about the issue, said Vice President-Law and Policy Matthew Schruers. “I have a hard time imagining that there are a lot of members of Congress who would willingly support legislation that would give an industry carte blanche to collude in the marketplace,” he said. “All the DOJ has said in their decision is that ASCAP, BMI and the music publishers have to obey antitrust law. To me, this seems like a conversation about giving the music industry an antitrust law exemption, and those exemptions have historically been unpopular.”
A tech sector lobbyist pointed to the recent bipartisan letter from leading House Judiciary Committee member James Sensenbrenner, R-Wis., and five other House members to the DOJ in support of the consent decrees finding (see 1608090054) as evidence that it would be hard for Collins to get a bill targeted at Justice's decision through the committee. Collins said he doesn't believe the Sensenbrenner letter signals future difficulty in reaching a consensus on action to address DOJ's decision. “I think [the congressmen] were reflecting a position” favored by broadcasters and the tech sector, “but when you get into the deeper issues involved, there may be more unity” on a solution, Collins said.
Collins told us he will make a decision on how to proceed at the end of this year or the beginning of 2017, noting that the amount of time left in the 114th Congress' legislative calendar is rapidly decreasing. He said he will continue to meet with stakeholders after Congress reconvenes Sept. 6 to supplement meetings he's had during the August recess. Herbison acknowledged that Congress isn't likely to take action on Justice's decision until the 115th Congress convenes, but said he has faith that House Judiciary will come up with a solution. That solution may take time to work through Congress “and there's not a lot of time” before DOJ begins enforcing the 100 percent licensing language in August 2017. “If a solution doesn't appear while there's still time left on the clock, we'll need to have a conversation” about seeking further DOJ forbearance from enforcing the clarified language, Herbison said.