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Public comment on collective rights management rules review by National Association of Broadcasters

NAB members are both creators and users of copyrighted works and, as such, recognize the important need to balance the rights of copyright owners against the public interest. The blanket licensing of performance rights is inherently anti-competitive because the very nature of the PRO’s blanket license involves the fixing of a single price for all music, irrespective of which songs are actually used.

Moreover, the aggregation of rights gives the PROs tremendous market power, which in the absence of the Consent Decrees would allow the PRO to extract supra-competitive pricing for their licenses. There is no competition between ASCAP and BMI with respect to these licenses because neither license provides a substitute for the other.

The PROs and music publishers have alleged that the Consent Decrees somehow unfairly suppress the compensation that songwriters and composers receive for the public performances of their music and are causing songwriters’ incomes to drastically decrease. If songwriters’ incomes are truly decreasing on an industry-wide basis, it is certainly not due to a decrease in performance royalties.

The need for the consent decrees arose from the very nature of the blanket licenses, which are fundamentally anti-competitive, but also necessary to enable wide scale music licensing. The blanket license, itself, creates the market power necessitating its regulation.

The major music publishers with substantial catalogs have essentially the same power as the PROs because their catalogs do not compete with one another, and each has aggregated a large enough number of songs from individual songwriters as to make the licensing of their catalogs indispensable for broadcasters.

A private arbitrator will have far less experience with the relevant copyright and antitrust law than a federal judge. To the extent an arbitrator has music industry experience, the arbitrator would necessarily have represented either copyright owners or licensees, creating lingering concerns over fairness and perceived conflicts of interest. Discovery in arbitration is typically minimal, or eliminated entirely. Such lack of discovery would disproportionately prejudice licensees, because the PROs have access to potential benchmarks and other relevant information while licensees typically do not.