DOJ Believed Taking Close Look at ASCAP, BMI Music Licensing Consent Decrees
LAS VEGAS -- DOJ appears to be taking a close look at whether music licensing consent decrees are still needed, including those requiring ASCAP and BMI to license their entire music catalogs, an NAB Show panel was told Tuesday. Speakers also offered a mixed outlook for copyright revamp legislation that passed a House panel earlier that day (see 1804110060). Speakers allied with broadcast interests noted Antitrust Division Chief Makan Delrahim said those pacts may not be necessary. And the 2nd U.S. Circuit Court of Appeals upheld a lower court overturning DOJ under then-President Barack Obama deciding the music licensing settlements should remain in force without major changes (see 1712190052).
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Justice is reviewing all 1,300 consent decrees to see "if they are still fit for [their] purpose given market conditions and he has explicitly called out both the ASCAP and BMI consent decrees as potentially warranting some close scrutiny," said NAB Deputy General Counsel Garrett Levin. Speakers noted the association and other music licensees back DOJ barring the two performance rights organizations from licensing fractions of songs from their catalogs. With such licensing, "you have to figure out who owns the other fraction," said Benjamin Marks of Weil Gotshal. "You have to track down all the other fractional interests." ASCAP and BMI didn't comment.
The two PROs are "essentially two-stop shopping," said Marks, whose biography says he represented the Television Music License Committee. Delrahim appears to believe "consent decrees may not be the most effective way to remedy an antitrust problem," and seems to prefer "structural remedies" where his department is "not in a long-term monitoring role," said Marks. "I doubt that all 1,300 consent decrees will survive. And I doubt that none of them will survive." Some "can probably be sunsetted with little disruption," but there would be "tremendous disruption" in any "overnight sunsetting of the ASCAP and BMI consent decrees," the IP attorney said: "I don't see that being a short-term process" and "it's clear that they are taking a hard look at the consent decrees generally."
The Antitrust Division is actively looking at hundreds of the decrees, then-Associate Attorney General Rachel Brand, who since was hired by Walmart, said in February. Justice didn't comment now. As "we reduce regulation across the government, I expect to cut back on the number of long-term consent decrees we have in place and to return to the preferred focus on structural relief to remedy mergers that violate the law and harm the American consumer," Delrahim said in November.
It's no sure thing the Music Modernization Act will pass the Senate this year, though MMA House passage seems likely after that chamber's Judiciary Committee unanimously OK'd HR-5447 earlier Tuesday (see 1804110060), a panelist told us. MMA has "been pretty well set up to pass the House," but work is at an earlier stage in the Senate, Levin told the panel. There will "probably" be "some hearings" on the bill on the Senate side, he added. "But it doesn't look like there's a pretty good chance of seeing comprehensive music licensing reform passed into law this year." He acknowledged in later Q&A to us that "it's a little hard to prognosticate" on prospects for the copyright change.
On Capitol Hill, "it's a little bit of a race against the clock," the NAB lawyer told us. "It's an election year. There's probably not a whole lot left that Congress is going to do" this session. The wide-ranging support from industries would suggest "a pretty good chance that it does make it through the Senate," but "it only takes one senator to slow it down," Levin said. Copyright interests like RIAA praised House Judiciary's 32-0 vote. The bill "represents a level of compromise and consensus on music licensing issues that has eluded lawmakers for decades," said NAB CEO Gordon Smith.