Comments to the U.S. Department of Justice on the ASCAP and BMI Consent Decrees

August 6, 2014

The purpose of copyright law is to establish a system that encourages the creation and dissemination of new works by providing authors with an incentive to create those works. There are many types of music services that provide consumers with access to the songs they love. From terrestrial radio to online subscription music services, each platform is governed by different rules that determine which types of royalties must be paid and how prices change from service to service. While policymakers created the U.S. music licensing system to provide fair compensation for artists, songwriters, and composers and to foster innovation, the current system often fails to do either. The Department of Justice (DOJ) should use the review of the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc.’s (BMI) consent decrees to begin the process of modernizing the way music copyrights are licensed in the digital age, kee ping an eye on innovation, competition, transparency, and fairness. The Performance Rights Organizations (PROs), such as ASCAP and BMI, are mired in a slow, complex system that fails to create competitive rates for compulsory licenses. While the onus to fix many of these issues ultimately resides in the halls of Congress, DOJ can sow the seed of change by pushing the PROs to adopt several directives as part of these consent decrees. DOJ requested comment on whether these consent decrees still serve an important purpose today. ITIF believes these consent decrees are still important to protect competition, because in their absence, the bulk music licensing world of the PROs is free to pursue monopolistic pricing. However, the DOJ can take steps to improve the consent decrees and to align them with technological breakthroughs and innovations of the digital age.