(by John Garziglia) The U.S. Department of Justice recently announced that there would be no modifications to the 1941 ASCAP and BMI antitrust consent decrees. The main thrust of the DOJ decision was a confirmation that each consent decree requires “full-work” licenses conveying to radio stations, television stations, bars, restaurants, digital music services, and other music users the right to publicly perform, without risk of copyright infringement, all works in ASCAP’s and BMI’s repertories.
A radio station with an ASCAP and a BMI license plays a songwriter’s song with the assurance that, if the particular song is in the catalog, the radio station has a blanket license to play the song and is covered for copyright liability. A radio station cannot be sued because the ASCAP and BMI licenses under the consent decrees offer only “full-work” licensing, not fractional licensing in which a song with multiple songwriters would require a license from each songwriter.
The primary issue before the DOJ was a request to alter the consent decrees to allow for fractional licensing. Under such a change, a radio station playing songs with multiple songwriters would have to seek licenses from each songwriter to have assurances of protection from copyright infringement. The DOJ concluded that “[i]f ASCAP and BMI were permitted to offer fractional licenses, [radio stations] seeking to avoid potential infringement liability would need to meticulously track song ownership before playing music”.
Why would certain songwriters desire fractional licensing? Simply put, it would give songwriters a much greater bargaining power to extract higher licensing fees for certain songs with multiple writers even though the songs themselves were licensed by one of the songwriters through ASCAP or BMI.
The DOJ stated that the consent decrees and the licensing arrangements that ASCAP and BMI make with songwriters support the conclusion that ASCAP and BMI may only offer full-work licenses, not fractional licenses. The DOJ observed that permitting fractional licensing by ASCAP and BMI “would undermine the traditional role of the ASCAP and BMI licenses in providing protection from unintended copyright infringement liability and immediate access to the works in the organizations’ repertories which [are] key procompetitive benefits” of the performing rights organizations.
The DOJ was also asked to review whether, under the consent decrees, songwriters could partially withdraw certain rights to some users, such as a withdrawal of rights to digital music services (or possibly radio stations), but not to other music users. The DOJ determined that, under the same rationale dictating that ASCAP and BMI could only offer full-work licenses under the consent decrees, partial licensing would also not be in the public interest. To the extent there is a current uncertainty on this question, ASCAP and BMI are given one-year to come into compliance.
The DOJ noted that the 1941 consent decrees are “inherently limited in scope”. The DOJ encouraged Congress to take up a “comprehensive legislative solution that ensures a competitive marketplace and obviates the need for continued [DOJ] oversight” of ASCAP and BMI.
Many radio station owners like to complain about government regulation. With songwriters, however, DOJ oversight through its consent decrees insures that radio stations with ASCAP and BMI licenses (along with SESAC and more recently Global Music Rights licenses) can play just about any song for a known flat blanket fee, and be protected from potential massive claims of copyright infringement.
Contrast the blanket songwriter licenses now offered to radio stations with the individual song licensing that movie producers must undertake with each separate songwriter to use a song in a movie. Such an individual licensing scheme for radio would dramatically reduce the availability of songs for airplay, and substantially increase the cost of music. For radio station song licensing, it is good that, at least for now, “The Song Remains the Same” (Led Zeppelin “Houses Of The Holy” 1973).
John F. Garziglia is a Communications Law Attorney with Womble Carlyle Sandridge & Rice in Washington, DC and can be reached at (202) 857-4455. or[email protected]