BMI makes public DoJ submission on consent decrees

Submissions to the Antitrust Division of the US Department of Justice’s review of music licensing, and more specifically the consent decrees which bind the country’s two main collection societies, ASCAP and BMI, will close tomorrow.

BMI has, within the last 24 hours, made public its submission and its stance on the changes it believes the DoJ should implement, in particular, and rather surprisingly, seeking agreement for the withdrawal of digital rights.

“This will enable BMI to offer easy, efficient access to our wide-ranging repertoire for many traditional music uses,” it says, “while allowing publishers and music users the opportunity to negotiate their own free-market digital deals.”

BMI also asks for the consent decree to be clarified, giving it permission to license not just the public performing right, but any rights relating to a music work in a bid to become a ‘one-stop shop’ for music users.

Finally, it asks for the rate-setting forum to move from federal court to a binding arbitration model, meaning rate disputes could be resolved more efficiently and ultimately, in a less-expensive fashion. The current review follows some key developments in the US which have altered the licensing debate. In September 2013, the rate court came down in favour of Pandora, and against ASCAP, in a ruling that said that the collection society’s blanket license had to include all of its repertoire. This meant that publishers who pulled their digital rights from the PRO were forced to be licensed via ASCAP until the Pandora deal expires on Dec 31, 2015. In July, Sony/ATV Chairman and CEO Martin Bandier wrote an open letter, making clear his company’s intentions that, should the consent decrees fail to be revised, the publisher will: “(explore) other options, including the potential complete withdrawal of all rights from ASCAP and BMI."

The DOJ, as part of its evaluation into music licensing, is considering the following:

• Whether content owners should be able to pull out of PROs for certain types of rights, such as digital rights.
• Whether to replace the rate court, which is a federal court with all of the expense of a federal lawsuit, with mandatory arbitration.
• Whether PROs should be able to grant rights beyond performance rights.
• In general, whether the consent decrees are helping or harming competition.