November 29, 2000
Mr.
James Wade
Chief, Civil Task Force,
Antitrust Division, Department of Justice
325 Seventh Street, N.W.
Washington, D.C. 20530
Dear Mr. Wade:
The International Association of Assembly Managers, Inc. (“IAAM”), hereby submits comments concerning the American Society of Composers, Authors, and Publishers (“ASCAP”), Second Amended Final Judgment and proposed Consent Decree pursuant to the notice for comments set forth in 65 FR 57828.
IAAM is a not-for-profit, 501 (c) tax-exempt
organization incorporated in the State of Illinois. IAAM’s membership includes
approximately 3,000 managers of stadiums, arenas, convention centers,
amphitheaters and performing arts centers (“facility managers”). IAAM
members operate facilities across the United States, which represents
investments of billions of dollars of public and private funds. These facilities
attract millions of patrons in the United States each year to a variety of
professional and amateur events including, but not limited to, football,
baseball, hockey, music concerts, theatrical productions, annual conventions and
tradeshows. but object to current rate structures, collection procedures, access
to music libraries and the potential for multiple collections for a single use
or performance that exist at the present time.
IAAM members favor fair music licensing fees for music used and performed
in their facilities. IAAM also supports the Department of Justice and its
efforts to bring a sense of fairness to ASCAP licensing practices. Specifically,
IAAM members support the increased access to music libraries on-line and by CD
ROM, the use of “background music” and “incidental music” use fees and
licenses. The requirement that ASCAP use its best efforts to avoid
discrimination among the various types of licenses offered to any one group of
users. These changes will be of great use and will promote fairness in
determining use and repertoire concerns from our members. In addition, the
encouragement of different types of licenses and structures will also benefit
our membership and the public. However, a few serious concerns remain. Our
concerns involve the egregious collection procedures often employed by ASCAP,
the costs of litigating disputes in New York City, even with the new notice
provisions, the lack of local arbitration procedures and we encourage a
provision in the Consent Decree for the on-line purchasing of music licenses.
These issues are discussed below.
I.
ASCAP Collection Procedures
ASCAP, as a performance licensing organization, is
essentially a collection agency for the Composers, Authors and Publishers of the
over eight million works in its catalog. ASCAP seeks to grant licenses for the
use of the works in its repertoire, in exchange for fees, which it distributes,
to the creators of the work. As such, ASCAP has had its agents historically seek
large blanket license fees from many public assembly facilities and other music
users, and fees for alleged violations of its licensing agreements without fully
identifying the violating event or the specific works represented in its
repertoire.
While the exact content of the catalog will be much
more accessible through the Consent Decree’s requirements of on-line
publication and weekly updates, and bi-annual CD-ROM updates, the fee collection
procedures themselves have not been addressed in the Judgement. We propose that
ASCAP be held to standards of conduct similar to those contained in the Federal
Fair Debt Collection Practices Act[1].
This act, in part, prohibits the harassment and annoyance of debtors, that third
parties (other PROs) not be advised of the debt unless guarantor of the debt,
and the requirement that proof of the debt is sent to the alleged debtor. A
violator of the act is punishable by the assessment of court costs, attorneys
fees and damages up to $500,000 or 1% of the violator’s net worth, whichever
is less. It seems only reasonable and fair that if ASCAP continues to use
harassing, intimidating and clearly unfair collection practices, it should be
held to similar standards in fair debt collection. Letters and bills indicating
any alleged violation of a license should be indicated to the facility in
question. ASCAP, at its essence, is a collection agency for licensing fees for
millions of works performed around the Country on a daily basis, and should be
held to the same standards as other debt collectors.
II. The New York Rate Court and Local Arbitration
Currently, many music users are discouraged from fee disputes due to the
expense and often lengthy procedure to get any rate disagreements heard in a
timely manner.
However,
the proposed Consent Decree does allow easier access to the Rate Court, located
in New York City, than previously available. With this new system, it may be
anticipated that more and more music users will seek to challenge the license
fees demanded by ASCAP. With the reduction of hurdles and impediments to fee
disputes cleared away by the proposed Amended Final Judgment, a flood of rate
cases can be anticipated.
Such an onslaught could make it difficult for the Court to hear the cases within
the required one-year time period. We suggest that local arbitration of any fee
dispute be provided, under the supervision of the local federal district court,
or conducted by the American Arbitration Association or similar dispute
resolution group. Local arbitration prior to the filing of a lawsuit would be
less costly and would expedite resolution of the fee matters quickly. While the
Rate Court certainly has the experience and expertise to handle these matters,
for many simple disputes, local arbitration may be the cheaper and wiser
alternative for all parties, and alleviate the Rate Court’s case load,
allowing it to concentrate on more substantial disputes. IAAM would urge the
Court to consider requiring local formal arbitration or mediation before forcing
music users in a rate dispute to hire counsel in New York, often a large
distance from their locale, and often far more costly than their local counsel
fees.
III. On-Line Purchasing of Licensing Agreements
The proposed Consent Decree requires ASCAP to maintain and update its
online catalog on a regular basis. This will help facilities determine what
music they can and will choose for different programs. IAAM believes that ASCAP
could easily offer on-line licenses, where credit cards or other forms of
payment could be accepted. For single use, per-program or per-segment licenses,
a flat fee may be most appropriate and could be purchased like any other
commodity on-line. Background music licenses could be offered and paid for
online. This would potentially simplify the licensing of the music itself, as
well expedite the collection of fees for ASCAP, bypassing the need to send out
collection personnel or paper billings for many small uses. For programs
otherwise covered by ASCAP, such an online licensing system would be convenient
for all parties, and potentially increase ASCAP revenues, as compliance would be
much simpler than the current system. IAAM suggests that the Court explore the
possibility of ordering ASCAP to develop an on-line licensing service in
addition to the on-line catalog.
IV. Fee Structures for Public Assembly Facilities
Facilities in our membership are a diverse lot. Arenas, Stadiums,
Convention Centers and Theaters of all sizes are included in our membership
rolls. One constant concern of our membership has been that the fee structure
and catalog availability may be uniform, despite the difference in frequency,
intensity, and type of music used by a facility.
For example, stadiums in different parts of the Country use very
different types of music, and some facilities are multi-use facilities, while
others house only one sports team rather than many. Convention centers vary in
size dramatically. Theaters can range from 200 seats to thousands. The blanket
license did not allow any accommodation for such variations in use. We certainly
hope that the availability of the catalog, the encouragement of license types
other than the ubiquitous blanket license, and the potential for on-line
purchase of licenses will allow reasonable fees to be paid to ASCAP. The fee
structures must account for the difference in frequency, intensity, and type of
music use among facilities within the same group or class.
Thank you for the opportunity to comment on the Amended Final Judgment
and proposed Consent Decree in this case. If you have any questions on this
matter, please feel free to contact me at (202) 434-8988.
Sincerely,
Turner
D. Madden
cc:
Mr. Frank Poe, Chairman, IAAM Board of Directors
Mr. John R. Zimmer, CAE, Executive Director IAAM
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