Despite Songwriter Pushback, MIC Coalition Confident in ASCAP, BMI Future
Language the Senate Judiciary Committee included in its version of the Music Modernization Act (S-2334) (see 1806280062, 1806110051 and 1806080034) ensures DOJ would have proper oversight if the department were to try to eliminate the ASCAP and BMI consent decrees, said representatives from the MIC Coalition. But a music industry attorney accused Congress of catering to the coalition, pitting wealthy companies against songwriters.
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The MIC Coalition -- which includes NAB, the Computer & Communications Industry Association, the Digital Media Association (DiMA) and CTA -- was pivotal to the Senate including the DOJ language. Various retailers, hotels and brewers are also members of the coalition. Music industry attorney Chris Castle emailed that with Google’s and Facebook’s support, it is “Goliath squared versus a very little David,” with the coalition seeking to subject songwriter organizations like SESAC and Global Music Rights to the consent decrees.
Assistant Attorney General Makan Delrahim is reviewing some 1,500 consent decrees, including agreements governing performance rights organizations (PROs) like ASCAP and BMI. The decrees were implemented because DOJ suspected the PROs of antitrust violations. Publishers warned against the “chaos” that would result from eliminating the decrees, and Senate and House Judiciary Committee leadership agree. Without the decrees, musicians could license songs at whatever rate a licensee would be willing to pay, giving the PROs unchecked power, publishers argued.
DiMA General Counsel Greg Barnes told us preserving the consent decrees is “of paramount importance” to online streaming services, radio stations and millions of bars, restaurants and retailers that regularly hold music performances. The Senate adding language to protect these decrees “is only the latest of many signals that any future review of the decrees should be undertaken in the most thoughtful and deliberate manner possible,” he wrote.
DOJ declined to comment, but a content industry attorney said the department seems receptive to the language included in the Senate Judiciary Committee’s version of the bill. The committee unanimously passed its version in June, two months after the House voted unanimously to approve the original music copyright package. The content industry attorney said staff for House Judiciary Committee Chairman Bob Goodlatte, R-Va. and ranking member Jerry Nadler, D-N.Y., have been involved in the Senate discussions, are familiar with the language and are comfortable with it.
CCIA Vice President-Law and Policy Matthew Schruers said if the consent decrees are eliminated, the PRO licensing would have to stop, which would be “disastrous for both artists and licensees of music,” or the PROs would operate in the same manner for which they were sued when they were price fixing. “Neither of those outcomes is a good one,” he said. “You’re either going to have a huge licensing vacuum or PROs operating in violation of the law.” The bill reported out of Senate Judiciary, along with House and Senate correspondence with DOJ, indicates there’s “great interest and concern on the Hill about upsetting this critical element of the musical licensing apple cart,” he said, adding he’s confident DOJ heard those concerns.
Delrahim is seeking to eliminate what he perceives as mismatched regulatory duties for the department, and dissolving the consent decrees is the first and primary means for meeting that goal. Castle said the decrees are arguably outside the department’s enforcement mandate.
NAB Executive Vice President-Communications Dennis Wharton said Senate Judiciary struck a good balance with the new language, ensuring Congress has proper oversight, so the situation doesn’t end with “chaos in the music marketplace.” There's incentive from songwriter groups to abuse this power, he said. Mitchell Silberberg attorney Jay Rosenthal, a former general counsel at the National Music Publishers’ Association who represents music industry content owners, emailed that “all sides believe the Congress appropriately addressed the issue.” A tech industry attorney said he’s confident the new language points toward a sufficient process for ensuring there's no music licensing crisis.