Lindsey Graham Goes to War with the Entertainment Industry
Senator Lindsey Graham (R-S.C.), who represents this humble author, once frequently locked horns with me on various issues. At a 2012 Graham campaign fundraiser, I debated him, challenging him on three issues. Of these three issues, he has since reversed his stance on two. (He initially supported increased funding for the World Bank, a stance he has since reversed. He has also revised his stance on immigration. However, he held fast on an issue over the timing of congressional primary run-offs.)
Often on my broadcasts, I speculate when and why Sen. Graham had his epiphany. When and how, though, is not as important as the simple fact that his views and governing style have changed for the better.
For example, Graham has laudably pitted himself against the liberal Hollywood elites who oppose the president and are trying to re-write the country’s lawbooks for personal gain. As a means of working to protect small businesses across the country, including many here in South Carolina, on February 12th he sent a letter to antitrust chief Makan Delrahim, urging him not to remove the government’s restraints on the music industry’s largest monopolies until he discusses the issue with him first.
While Delrahim, who served under Sen. Orrin Hatch (R-Utah) and President George W. Bush, is an expert on intellectual property, Graham should be commended for having the foresight to send this letter. These big music institutions are nothing but crony capitalists that habitually disregard the law to extort money from American consumers and businesses.
At issue — at least in the minds of music’s special interests — are regulations currently being reviewed by the DOJ that govern their predatory behavior, which have been on the books since the 1940s.
Since free market forces don’t really exist in the realm of music copyrights — after all, intellectual property is government-created — music publishers managed to amass significant market share with ease. Rather than compete, they decided to pool their influence together into two organizations, called ASCAP and BMI, which possess approximately 90 percent of all music performing licenses.
What plausible reason other than making more cash by limiting competition would ostensibly rival entities have to become implicit partners? This seemed to the DOJ’s reasoning at the time, which is why it had the ASCAP and BMI behemoths come to terms with federal consumer protection agreements.
“Look,” the DOJ essentially reasoned. “We know how important copyrights are to protecting artists, but we also know that without antitrust action, this monopolized industry that the federal government created is going to harm consumers and businesses.”
To avoid Progressive Era-style trust-busting, ASCAP and BMI both signed off on the DOJ’s suggested solution: they could keep their market share if they agreed to license their entire catalogs through a fairly-priced blanket license.
These agreements saved the industry from complete chaos and are unquestionably still relevant today. According to a letter with 20-plus pages of signatures from hundreds of businesses across the country, the settlements are the only tool they have to protect fairness and accountability with respect to music licensing.
Yet, as part of a larger DOJ bookkeeping review process, Delrahim has, for whatever reason, seemed to look at the regulations governing ASCAP and BMI with a cautiously critical eye. He even gave a keynote speech at the Music Publishers Association. Without taking a side or providing reasoning other than the need to examine old laws, Delrahim has given a sense of hope for the unshackling of the industry. This is music to the music cronies’ ears.
While the music industry will never be completely free, lifting the current DOJ restraints will remove most of the market forces that currently exist. After all, these behemoths’ anti-competitive instincts have not gone anywhere. Just a few years ago, ASCAP paid close to $2 million for deliberately violating the DOJ’s terms by engaging in exclusivity contracts to raise prices, all while lobbying Congress to help change the status quo.
Thankfully, Graham realizes that while the ideologue’s skepticism of government regulation is typically a good thing, this case is different.
“The purpose of my letter is not to prejudge the outcome of your review, but rather to express my concern that moving to terminate or even sunset the ASCAP & BMI consent decrees, without first working with my committee and the Congress as a whole to establish an alternative licensing framework, could severely disrupt the entire music licensing marketplace," he wrote in his letter to Delrahim.
Graham is not off base for intervening in the process. The Music Modernization Act, which passed the Senate with unanimous support last year, states that “before filing … a motion to terminate a consent decree between the United States and a performing rights society, the Department of Justice shall,” among other things, provide “committees information regarding the impact of the proposed termination on the market for licensing the public performance of musical works should the motion be granted.” The Senate Judiciary Committee, which Graham chairs, should certainly fall in this category, and given that Graham comes from a similar political and ideological background as Delrahim, a meeting between the two would likely be all the more rewarding.
The American people are fortunate to have an antitrust traffic cop in the Senate as vigilant as Graham. Hopefully, the Justice Department will take him up on his meeting and value his opinion as much as the president does.
Ann Marie Ubelis is host of the nationally syndicated radio show Southern Sense. She is a former small business owner and retired New York City police officer. Find out more at southern-sense.com.
