ASCAP/BMI Consent Decrees to be Reviewed by DOJ

All broadcasters are very familiar with BMI and ASCAP since they must be paid royalties every year for use of songs in their repertoires. What you may not have known is that since 1941, ASCAP and BMI have been parties to anti-trust consent decrees with the US Department of Justice since, between them, they control 90% of the commercially available songs in the US. The concern was and remains that given the huge market power concentrated with only two organizations, they have an unfair advantage in setting the rates that others must pay to have a license to perform their musical works.

As part of the consent decrees, BMI and ASCAP must grant a performance license for all of its musical works to any user who makes written application for it and if the parties cannot agree on a fee, a federal judge must determine a reasonable fee (also known as “Rate Court”). It also cannot treat users differently in rates or rights.

The DOJ announced earlier this month that it was undertaking a review of the consent decrees to examine their effectiveness and operation since the last revisions were made in 1994 for BMI’s decree and 2001 for ASCAP’s. The revisions may not necessarily change the rates that broadcasters pay, but may result in a change in how those rates are set. Both ASCAP and BMI are requesting that the decrees be modified to allow rate disputes to be subject to mandatory arbitration, necessarily taking the rate-making power out of the hands of the court.

Other parties, namely publishers, are urging that the consent decrees be scrapped entirely in favor of allowing those publishers to charge whatever they want to digital providers such as Sirius and Pandora (and presumably, broadcasters).

Comments are due to the DOJ by August 6. If you would like assistance in filing comments, please contact your communications counsel.