Category Archives: AFBL

Brilliant Article DMX’s Rate Cases against ASCAP and BMI

I ran across the below article by Carly Olson, a 3L at Northwestern, about DMX’s rate proceedings against ASCAP and BMI.  Ms. Olson wisely (and prophetically) concludes that the Second Circuit should affirm the district court opinions in DMX’s favor.  I couldn’t agree more.  And, thankfully, neither could the Second Circuit!

Check out the article here.

Local Television Wins: BMI Must Offer AFBL

As I predicted here, Judge Stanton of the Southern District of New York has denied BMI’s motion that its consent decree does not require it to offer television broadcasters a blanket license the fee for which adjusts to reflect the degree to which a television broadcaster publicly performs musical works that it licenses directly from BMI-affiliated music publishers.  As is typical of his opinions, Judge Stanton quickly cut to the crux of the issue–is an adjustable fee blanket license a different kind of license or a traditional blanket license with a different fee structure?  Following the Second Circuit’s opinion in U.S. v. Broadcast Music, Inc. (In re AEI Music Network, Inc., 275 F.3d 168 (2d Cir. 2001), Judge Stanton concluded that an AFBL for broadcasters is still just a blanket license with a carve-out fee structure.

Judge Stanton’s opinion is below
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Local TV Responds to BMI’s Motion: “We’re Entitled to AFBL”

The TV Licensing Committee, through the named plaintiff in this case, WPIX, Inc., has filed its response to BMI’s motion arguing that it is not required to offer local television stations an adjustable-fee blanket license (“AFBL”) like the one DMX secured this past year.  The argument is decidedly straightforward.

(1) BMI is required to offer any user–including local television stations–a blanket license.

(2) Under United States v. Broadcast Music, Inc. (In re Application of AEI Music Network, Inc.), 275 F.3d 168 (2d Cir. 2001) (“AEI“), an AFBL is simply a blanket license with a fee structure that adjusts to reflect the degree to which a licensee has licensed the public performance rights to works within the BMI repertory directly from BMI-member publishers.

(3) Therefore, BMI is required to offer local television stations an AFBL.

As I noted before, BMI’s argument that its consent decree presents a local television station with a Hobson’s choice between a per-program license (that local TV claims does not work for them) and a traditional blanket license, the fee for which does not vary depending on the direct licensing activities of the licensee, is a difficult one.  As WPIX argues, the per-program alternative was inserted in BMI’s consent decree at the demand of the US government as a means of curtailing BMI’s market power, not as a shield behind which BMI can hide when a licensee requests an AFBL.

The brief is below:
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BMI Requests Ruling It Is Not Required to Offer an Adjustable-Fee Blanket License to Local Television

In the “saw this coming” category, BMI has filed a motion in the SDNY requesting a ruling that its Consent Decree does not require it to offer an adjustable-fee blanket license (“AFBL”) to local television broadcasters.  In late 2009, the Television Music License Committee (“TMLC”), which represents approximately 1,200 local television broadcasters in their negotiations with BMI, ASCAP and SESAC over the licensing of public performance rights for the music contained in all programming that isn’t supplied to the local broadcasters by ABC, CBS, NBC and Univision, filed a rate case against BMI seeking an AFBL like the one DMX has secured.  See WPIX, Inc. v. Broadcast Music, Inc., 09-civ-10366-LLS (S.D.N.Y.)

In its February 16 filing, which is provided below, BMI argues that its Consent Decree requires it to provide a per-program license to broadcasters but not to non-broadcasters and to provide an AFBL to non-broadcasters, but not to broadcasters.  According to BMI, because Sec. VIII(B) of its Consent Decree deals specifically with granting a per-program license to broadcasters, the operative language in Sec. XIV(A) regarding providing a license to “any, some, or all” of BMI’s repertory–the basis on which the Second Circuit concluded that BMI was obligated to provide an AFBL to the non-broadcaster applicant in United States v. Broadcast Music, Inc. (In re AEI Music Network, Inc.), 275 F.3d 168 (2d Cir. 2001)–does not apply to broadcasters.  According to BMI, when it agreed to modify its Consent Decree to add Sec. XIV in 1994, it did not intend to modify its obligations under Sec. VIII, which was part of the original 1966 version.

The significant hurdle over which BMI must leap, however, appears to be the logic underlying the AEI decision.  There, the Second Circuit reversed Judge Stanton’s ruling at the SDNY and found that an AFBL was a blanket license that differed only in way its fee is calculated.  BMI acknowledges that it still provides a blanket license to local television broadcasters, in addition to the per-program license it also offers.  BMI is apparently arguing that because it offers this per-program license, under which local television broadcasters can reduce fees to BMI by directly licensing some or all of its music needs, the fact that the Second Circuit concluded that an AFBL is exactly like a traditional blanket license but for its fee structure is irrelevant.  In other words, BMI only has to offer ONE form of license under which fees can be reduced through direct or source licensing.  For non-broadcasters, which aren’t entitled to a per-program license, BMI has to offer the AFBL.  For broadcasters, which are entitled to the per-program license, BMI doesn’t have to offer the AFBL–the per-program license is enough.

Unfortunately for BMI, Judge Stanton is still the presiding judge in the BMI rate court, so he will hear this motion.  Since Judge Stanton ruled in BMI’s favor in 2000 when this issue was litigated by a non-broadcaster only to be overruled by the Second Circuit in 2001, I’ll bet he will follow the safe route and cite the AEI decision as the applicable precedent and let the Second Circuit distinguish if they want.  I’ll also bet the Second Circuit won’t distinguish because the rationale of the AEI decision is the same here: the TMLC is requesting a blanket license–which BMI acknowledges it has to provide–that differs only in the manner in which fees are calculated.

BMI’s motion is here:
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