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ASCAP, BMI Comment Regarding DOJ Review of Consent Decrees

In June 2014, the DOJ announced that it planned to review the consent decrees with music licensing firms ASCAP and BMI.  These consent decrees were initially entered in 1941; the ASCAP consent decree was last amended in 2001 and the BMI consent decree was last amended in 1994.  The DOJ asked for comments concerning whether the consent decrees "need to be modified to account for changes in how music is delivered to and experienced by listeners."  On August 6, ASCAP and BMI filed public comments regarding the consent decree review.

ASCAP argued that "[t]he market place for music . . . is changing dramatically," with "[n]ew technologies" such as Pandora, Spotify, and iTunes Radio "quickly surpassing physical music sales and digital downloads in popularity."  As a result, ASCAP urged that the consent decree needs to be modified to allow ASCAP members to enter into direct licenses through arms' length transactions at market value, to provide for clear guidance to the court that administers disputes about license rates to ensure that proceedings result in rates that reflect the true value of the rights at issue, and that amendments are needed to remove provisions that place ASCAP at a competitive disadvantage as compared to its competitors, including BMI.

BMI asked for three updates to its consent decree:  (1) allow publishers to give BMI the right to license work for some uses, while permitting publishers to retain the exclusive right to license works for other defined, digital uses; (2) clarify the decree to allow greater bundling of licensing rights; and (3) move the rate-setting forum (for disputes about license rates) from federal court to a binding arbitration model that is quicker and less expensive.

You can read more about the ASCAP comments here and the BMI comments here.