June 2019 – Update from NRB MLC

Dear NRBMLC Broadcasters,

In 2014, during a lengthy two-plus year review by the U.S. Department of Justice (DOJ) of the ASCAP and BMI consent decrees, your committee filed lengthy comments in support of keeping the decrees in place.

The decrees were imposed on both PROs by the DOJ over 70 years ago. The reason? Throughout their history both have tended to misuse their power, sometimes in violation of U.S. antitrust laws.

Following its 2014-15 study, the DOJ decided to not alter the decrees. Instead, it added some clarity concerning some of their more confusing issues such as “whole work licensing.” The DOJ’s validation of both decrees greatly displeased ASCAP and BMI. Broadcasters were understandably encouraged, however.

In 2017, the Trump Administration named Makan Delrahim as head of the DOJ’s Antitrust Division. Shortly thereafter, Delrahim determined that the Division would audit all of its consent decrees, focusing particularly on those of ASCAP and BMI. Since that time, the music industry—publishers and songwriters in particular—have been anticipating a change.

In early June, the DOJ announced that it was considering modifying the decrees, and opened a 30-day comment period—since extended to 60 days. Your Committee will file comments, as will hundreds of other entities, both pro and con. The DOJ is asking for our response to questions like these:

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? Which ones and why? Are there provisions that are ineffective in protecting competition? Which ones and why?

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

Would termination of the Consent Decrees serve the public interest? If so, should termination be immediate or should there instead be a sunset period? What, if any, modifications to the Consent Decrees would provide an efficient transitionary period before any decree termination?

By their nature ASCAP and BMI violate U.S. antitrust statutes. The industry has chosen to live with their monopolistic tendencies because they serve a very good purpose: bundling the licensing of performances and royalty payments to creators into a convenient process.

Without the force of ASCAP and BMI consent decrees, however, the licensing of individual public music performances becomes untenable. Since these two PROs control more than 85% of music that is performed on radio, chaos could result. If you are so inclined, please pray!

Gratefully,

Scott R. Hunter
Executive Director

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