DOJ sign

The coming weeks may be pivotal for the future of music licensing for radio.

The Department of Justice could issue its report and recommendations for the consent decrees that govern radio’s relationship with ASCAP and BMI. Makan Delrahim, Assistant Attorney General for Antitrust, will leave at the end of President Trump’s term. But before he departs the DOJ, Delrahim has said he would like to issue a report on his team’s nearly three-year review of the music licensing landscape.

Delrahim said during a speech in October that he planned to offer “some commentary and perhaps propose changes to be considered by the courts” before his time at the DOJ came to an end. He had earlier disclosed plans to leave his job leading the government’s team of antitrust lawyers in 2021 regardless of the election outcome.

Broadcast industry representatives in Washington say they are prepared for several different potential outcomes after the DOJ spent the past several years looking at not only the high-level need for the consent decrees but tiny specific provisions of how the rules actually play out in the marketplace.

The most likely outcome is said to be a report from Delrahim that outlines his findings and weighs in on several possible tweaks that he believes could improve how the ASCAP and BMI licensing process works. That could include a roadmap for how he believes his successor or Congress could move the review forward.

Delrahim has said he will not call for the guidelines to be abolished outright, as some in the music community have proposed. After months of digging into the music business, he said in October there is a “greater reliance” on the ASCAP and BMI decrees than some of the others that he looked to terminate as part of a wider review.

Delrahim could also take the recommendation of the Radio Music License Committee and the Digital Media Association, the trade group that represents companies including Amazon, Apple, Google, Microsoft, Pandora and Spotify. They jointly proposed a “blue-ribbon federal advisory committee” be created to “assist in the review process.” The groups said such a panel could include all music creators and users and offer its policy recommendations to DOJ and Congress.

Less likely is Delrahim doing nothing.

The Department of Justice did not respond to Inside Radio’s request for comment.

‘We Aren’t Out Of The Woods Yet’

Time may not be on Delrahim’s side, but broadcast lobbyists in Washington still believe the consent decree review could pose a threat to the licensing framework that has been used by radio for generations. “We would be happy with a simple report, but we aren’t out of the woods yet, because Delrahim has made it really clear that he wants to take some action and do something meaningful before his departure,” said a DC lobbyist. “I think the entire industry needs to remain vigilant in the remainder of his time at the Department of Justice.”

Radio lobbyists have said they have seen the National Association of Broadcasters pushing hard on the issue. The trade group has said the record does not support sun-setting the ASCAP and BMI consent decrees. The NAB would even like them expanded to cover SESAC and Global Music Rights, suggesting monopoly-like behavior is just as likely today by rights holders as in 1941 when the original decrees were adopted.

“When you start to peel back the onion, it's clear one cannot just dismantle the decrees because of the significant negative effects on licensees, and ultimately American consumers,” said an NAB spokesperson. “I would imagine that, if DOJ produces a report, it will look at some tweaks around the edges, but ultimately conclude that the decrees are in the public interest as they are today.” The NAB has also suggested the government create a commission with all the stakeholders that can make recommendations to Congress.

Any future shifts on Capitol Hill could work in radio’s favor, since the industry has demonstrated with the performance royalty issue that it has enough allies in Congress to stall a bill’s advancement. “Music licensing issues are really thorny. The only time they tend to move on the Hill is when they are consensus-oriented,” said a radio lobbyist. “But we would have to work, and we should take nothing for granted.”

Radio’s efforts have been in tandem with groups representing restaurants, bars, hotels, wineries, and breweries under the MIC Coalition banner. Lobbyists say the effort to convince members of Congress and others in Washington that now is not the best to time to rip up the consent decrees has been a silver lining of sorts in the turmoil the industries have faced from pandemic business disruptions. – Frank Saxe