Thank you Pandora: DOJ to Review ASCAP and BMI Consent Decrees #irespectmusic

Score one for the songwriters.

After the travesty of the Pandora rate court decision, a lot of people (including MTP) have been banging the drum about the unfairness of the ASCAP and BMI rate courts.  Nowhere has the Kafka-esque absurdity of the rate courts been more prominently on display than in Pandora’s recent lawsuit against ASCAP songwriters.

But however much Pandora has galvanized the creative community in a united response against greedy, entitled Silicon Valley overreach, the first step in correcting this festering wrong is for the PROs to convince the Antitrust Division of the U.S. Department of Justice to review the 70 year old consent decrees which haven’t been reviewed since 2001 in the case of ASCAP–a year before Napster entered bankruptcy–and 1994 for BMI, a year before the Congress recognized a performance right in sound recordings.

Thankfully, the DOJ is reconsidering fundamental reform of the rate court process and has agreed to review the ASCAP and BMI consent decrees.  This is the first step in restoring sanity to music licensing.

According to the DOJ website:

Antitrust Division Opens Review of ASCAP and BMI Consent Decrees

The U.S. Department of Justice, Antitrust Division, is responsible for overseeing the enforcement of the Final Judgments in United States v. ASCAP, 41 Civ. 1395 (S.D.N.Y.), and United States v. BMI, 64 Civ. 3787 (S.D.N.Y.) (“Consent Decrees”). The Consent Decrees, originally entered in 1941, are the products of lawsuits brought by the United States against ASCAP and BMI under Section 1 of the Sherman Act, 15 U.S.C. § 1, to address competitive concerns arising from the market power each organization acquired through the aggregation of public performance rights held by their member songwriters and music publishers. Since their entry in 1941, the Department has periodically reviewed the operation and effectiveness of the Consent Decrees. Both Consent Decrees have been amended since their entry. The ASCAP Consent Decree was last amended in 2001 and the BMI Consent Decree was last amended in 1994.

The Antitrust Division currently is undertaking a review to examine the operation and effectiveness of the Consent Decrees. The Department understands that ASCAP, BMI and some other firms in the music industry believe that the Consent Decrees need to be modified to account for changes in how music is delivered to and experienced by listeners. The Department’s review will explore whether the Consent Decrees should be modified and, if so, what modifications would be appropriate.

It’s appropriate that this decision comes on the eve of the first day of the Copyright Office Music Licensing Study Roundtables in Nashville to be followed closely by roundtables in New York and Los Angeles.

Of course, you have to ask yourself this:  Why is it that Google gets virtually no antitrust scrutiny, but songwriters are continuously monitored?

The Antitrust Division is soliciting public comments on their review, including comments on the following questions:

Do the Consent Decrees continue to serve important competitive purposes today? Why or why not? Are there provisions that are no longer necessary to protect competition? Are there provisions that are ineffective in protecting competition?

What, if any, modifications to the Consent Decrees would enhance competition and efficiency?

Do differences between the two Consent Decrees adversely affect competition?

How easy or difficult is it to acquire in a useful format the contents of ASCAP’s or BMI’s repertory? How, if at all, does the current degree of repertory transparency impact competition? Are modifications of the transparency requirements in the Consent Decrees warranted, and if so, why?

Should the Consent Decrees be modified to allow rights holders to permit ASCAP or BMI to license their performance rights to some music users but not others? If such partial or limited grants of licensing rights to ASCAP and BMI are allowed, should there be limits on how such grants are structured?

Should the rate-making function currently performed by the rate court be changed to a system of mandatory arbitration? What procedures should be considered to expedite resolution of fee disputes? When should the payment of interim fees begin and how should they be set?

Should the Consent Decrees be modified to permit rights holders to grant ASCAP and BMI rights in addition to “rights of public performance”?

The DOJ’s webpage contains contact information for those who wish to comment.  The deadline for comments is August 6.

If you’ve read the Pandora case, you will find these questions familiar as many of them relate to the rate court’s opinion.

Songwriters can savor this positive turn of events, but understand this:  The DOJ’s review is just the first step on the path back to sanity.  Pandora and the monied interests in Silicon Valley that have enriched themselves at the expense of songwriters and artists will be on top of this in a big way.  Remember that Google (who controls Pandora’s advertising revenue) is very adept at avoiding responsibility for their bad deeds (most recently bullying indie labels using their YouTube monopoly as leverage).

As Ben Sisario noted in the New York Times:

Billions of dollars in royalties are at stake, and the lobbying fight that is very likely to unfold would pit Silicon Valley giants like Pandora and Google against music companies and songwriter groups.

But if weren’t for Pandora’s shenanigans, it is unlikely that we would be here, so ironically we should all be thankful for that.

Yes, Pandora is the gift that keeps on giving.

Now get back in the game.

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