Guest Columnist

Federal government is derailing Iowa's music industry

The Capitol is seen behind the bare branches of a tree, in Washington, Monday, Nov. 30, 2020. (AP Photo/J. Scott Applewh
The Capitol is seen behind the bare branches of a tree, in Washington, Monday, Nov. 30, 2020. (AP Photo/J. Scott Applewhite)

The pains of the pandemic have already caused scores of Iowa music venues to close permanently, including The Mill in Iowa City and Vaudeville Mews in Des Moines. Just when the industry thought things couldn’t get any worse, the Department of Justice may soon enact counterproductive policy changes that further destabilize the state’s music industry.

The leader of the Justice Department’s antitrust division said that, before the start of the Biden administration, he might scrap or significantly change the agreements that the government signed with two music licensing monopolies, the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc (BMI), 70 years ago.

Over 30 of the state’s small businesses have urged the DOJ not to weaken these agreements. Their concern is understandable. Their livelihoods depend on these antimonopoly restraints remaining in place.

The two music monopolies in question, ASCAP and BMI, manage the licensing rights for over 90 percent of all music. That means every restaurant, coffee shop, music venue, and store in Iowa that plays music must pay them for the privilege.

Both Republicans and Democrats understand that when any entity controls 90 percent of a given marketplace, unnecessary price increases often become the norm. The agreements that the DOJ signed with ASCAP and BMI, called consent decrees, fixed this problem by allowing them to keep their market share as long as they committed to maintaining fair prices.

The decrees work as well today as they did in the 1940s. When the DOJ announced its music decree review, a robust coalition, including over a dozen conservative groups and left-leaning think tanks like Public Knowledge, said that keeping the agreements are important for the stability of the marketplace. That’s why it’s baffling that the head of the antitrust division appears so gung-ho on changing them.

ASCAP and BMI, along with the major publishing houses that control them, contend that “transformative changes” within the industry have made the decrees obsolete. This argument couldn’t be further from the truth. In fact, the Justice Department caught the cartel engaging in what appeared to be anti-competitive activity just four years ago.

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Iowa Sen. Chuck Grassley has stood up for Iowa’s small businesses that purchase licenses from these music monopolies. In a 2018, then-Senate Judiciary Chairman Grassley made it clear that making rash changes to the music decrees could risk putting the industry in complete chaos.

The most recent COVID stimulus bill was the first time entertainment venues received dedicated pandemic relief funding earmarked from Congress. It would be a shame if the Department of Justice weakened this relief’s utility with counterproductive policy changes now, at the very worst possible time for the industry.

This pandemic has already caused Iowa to lose too many venues and performers. The government shouldn’t force the state to lose any more. Here’s hoping that Jeffrey Rosen, who is leading the Trump DOJ in these final weeks, brings the department to its senses now before it’s too late.

Thad Nearmyer serves as chairman of the Jasper County Republican Party.

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