Tech, Broadcast Groups Urge No DOJ Alterations to ASCAP/BMI Consent Decrees

CTA opposes changes. “Removing these decrees jeopardizes the licensing system that enables millions of businesses across the country to efficiently play and pay for music performed publicly,” said Senior Vice President-Government Affairs Michael Petricone. “The ultimate result of such action would be substantial harm to consumers, businesses, and performers.”

DOJ should "neither remove nor weaken the Decrees until Congress creates a suitable framework to replace them,” said the Internet Association. “Congress brought a vast array of stakeholders together” during its work on the Music Modernization Act (MMA) “to create a system to efficiently license music and pay songwriters while avoiding anticompetitive tendencies of collective licensing. Congress should be permitted to undergo a similar process with public performance licensing without the looming threat of [DOJ] action. The Department would best serve the public by concluding its review and instead encouraging and helping Congress to build a consensus approach.”

The decrees “protect giant radio conglomerates and some of the largest technology companies,” the Recording Academy said. "Pursue an outcome that provides every songwriter with the opportunity to secure compensation for their work in a fair marketplace.” The group argued the 2018 MMA “simply requires robust notice provisions to Congress regarding a decision to file a motion to terminate a consent decree.” DOJ should “establish a framework that provides a reasonable transition to a more efficient and free market, avoids disruption to the industry, and allows all stakeholders sufficient time to adjust future expectations,” RA said. “Such a gradual transition could be facilitated by new consent decrees.”

The National Music Publishers' Association said the rules “should be modified to permit copyright owners to withdraw digital rights from the ASCAP and BMI repertories." Such “selective withdrawal” would “empower copyright owners to decide whether to license their works directly to digital service providers” or “whether to continue to license to such music users through the performance rights organization” (PRO) system, NMPA said. “Increased direct licensing between music publishers and DSPs would be efficient and procompetitive, not to mention fair to music publishers and songwriters.”

DOJ "has sought to eliminate" other decrees "because they are no longer necessary or desirable," but the ASCAP/BMI ones "continue to serve a vital function protecting” against “the anticompetitive concerns presented by the activities of the two largest U.S.” PROs, said NCTA and Netflix. “The continued need for the Decrees could not be clearer, as ASCAP has recently delivered demands for substantial and arbitrary rate increases to multiple Audiovisual Licensees operating cable television programming services; but for the Decrees’ protections, those licensees would have no genuine choice but to succumb.”

The pacts “serve an important purpose in making music more accessible for Americans and should not be eliminated, substantially modified, nor sunset, absent Copyright Act reform legislation that supplants the need “for the decrees “and addresses gaps in existing compulsory music licensing,” NPR said. Blanket licenses required under the decrees “that permit immediate use of covered musical works, without the delay of individual negotiations, facilitate Public Radio program production.”

Competitor PRO Global Rights Media wants to keep the arrangements, as they “give us meaningful time and opportunity to compete with ASCAP and BMI, and give other potential entrants an opportunity to enter and attract songwriters without undue restrictions from” ASCAP and BMI. “Materially modifying, sunsetting or lifting the existing Decrees would wreak havoc on the marketplace, crushing the nascent competition that has just started to emerge and discouraging further investment in the very competition that the Decrees were meant to promote,” GMR said.

The Radio Music License Committee and Television Music License Committee backed retention. “It would be a public policy error of the highest order for the Department to seek to eliminate or materially alter those essential, pro-consumer 'rules of the road' -- at least without a replacement legal regime at the ready to substitute in and perform a similar function,” said RMLC and the Digital Media Association. “Leaving it to private parties to bring antitrust lawsuits when ASCAP and BMI abuse their market power would lead to a patchwork of protections afforded to some users and not to others, and those protections would only come about through costly and time consuming litigations,” TVMLC said.

“A thriving American industry, a range of important judicial decisions, and numerous acts of Congress rely on the factual premise that these decrees will remain in place in their current form,” said iHeartMedia. “Antitrust law continues to view both large aggregations of market power and horizontal concerted action, such as collective pricing, with suspicion. Recent clarifications of the law governing unilateral conduct have not altered that. Nor are concerns about judicial price regulation in the context of unilateral action applicable here.”

If the “protections are removed, whether immediately or after a sunset period, an unconstrained ASCAP and/or BMI will have the incentive, ability, and demonstrated inclination to abuse their market power to obtain royalty rates far above competitive levels and engage in other anticompetitive conduct,” Music Choice said.