What are Consent Decrees?

Introduction

Consent decrees sit in the background of the U.S. music industry, but they quietly shape how songs are licensed and how money flows to songwriters. Most people interacting with music, whether through streaming, broadcasting, or running a venue, never deal with them directly. Still, the rules they set affect nearly every public performance of music in the country.

These agreements apply to ASCAP and BMI, the two largest performing rights organizations in the United States. Because of their scale and control over vast catalogs of compositions, their activities are not left entirely to the open market.

Understanding consent decrees helps make sense of why licensing works the way it does, why some negotiations end up in court, and why songwriters, publishers, and music users often approach the system from very different perspectives.

Learning Objectives

By the end of this guide, you will be able to:

• Define what consent decrees are in the context of music licensing
• Understand why ASCAP and BMI operate under regulatory oversight
• Explain how consent decrees affect licensing terms and negotiations
• Describe how rate courts function and when they are used
• Understand how the Music Modernization Act influenced consent decree procedures
• Identify the benefits and limitations of the current system
• Recognize why consent decrees remain a topic of debate in the modern music industry

Overview

Public performance rights in the United States are handled through performing rights organizations, which license the use of musical compositions and distribute royalties to songwriters and publishers. Four main PROs operate in this space: ASCAP, BMI, SESAC, and Global Music Rights.

ASCAP and BMI operate under consent decrees, which place legal limits on how they license music and interact with both rights holders and licensees. SESAC and GMR are not subject to these agreements and negotiate their licenses without the same regulatory framework.

The presence of consent decrees changes how the market functions. Instead of purely negotiated outcomes, certain aspects of licensing, especially when disputes arise, are guided by structured rules and, in some cases, court decisions. This creates a system that is partly market-driven and partly regulated, which is why it continues to draw both support and criticism across the industry.

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What Consent Decrees Mean in Music Licensing

In day-to-day terms, consent decrees set the ground rules for how ASCAP and BMI license music to the market. They don’t change what a public performance is or who owns a song. They shape how access to those songs is offered, priced, and enforced.

For music users, the most visible effect is access. A venue, broadcaster, or streaming service can request a license and expect to receive one. The PRO cannot refuse simply because the user is small, new, or negotiating aggressively. That obligation removes the risk of being shut out of a major catalog and makes it possible to launch services without negotiating song-by-song deals.

Pricing follows a similar structure. Rates are negotiated first, but if talks stall, there is a defined path forward. Either side can take the dispute to a rate court, where a federal judge sets a fee. That fallback changes the leverage on both sides. Negotiations still happen, but they take place with the knowledge that a court can step in and decide.

For publishers and songwriters, the decrees affect how their catalogs are pooled and offered. When rights are placed with ASCAP or BMI, those works become part of a blanket license that is available to all qualified users. Individual deals can still happen in some contexts, but the core licensing activity runs through the PRO under the decree’s rules.

There are also limits on how rights can be managed. Publishers cannot pick and choose which parts of their catalog stay with a PRO while pulling others out for separate deals in certain areas. That constraint keeps the blanket license intact but restricts how selectively rights can be deployed in negotiations.

Put together, these rules create a system where access is guaranteed, disputes have a defined resolution path, and catalogs are offered on broadly similar terms. It doesn’t eliminate negotiation, but it narrows the range of outcomes and sets boundaries that both sides have to work within.

Why ASCAP and BMI Are Regulated

To understand why consent decrees exist, you have to go back to how music licensing worked in the early 20th century.

By the late 1930s, ASCAP controlled the vast majority of commercially valuable compositions in the United States. If a radio station, nightclub, or theater wanted to perform popular songs, there was no practical alternative. Access to music meant going through ASCAP.

That position gave ASCAP significant leverage. It could set terms, raise prices, or refuse licenses, and music users had little ability to push back. This became a serious concern as radio broadcasting expanded. Stations depended on access to music to operate, and licensing costs became a point of tension.

In 1940, negotiations between ASCAP and radio broadcasters broke down. When ASCAP increased its licensing fees, many radio stations refused to comply. Instead of accepting the new terms, broadcasters formed their own organization, which became BMI. BMI offered an alternative catalog, drawing from songwriters and genres that had been underrepresented by ASCAP at the time.

For a period, radio stations stopped using ASCAP’s catalog altogether and relied on BMI’s music. That standoff made it clear how much control a single organization could exert over access to compositions.

At the same time, the U.S. Department of Justice was already investigating ASCAP for potential anti-competitive behavior. The concern was not just about pricing, but about market control. When one organization represents most of the music that users need, it can influence the entire licensing landscape.

In 1941, the DOJ intervened. Rather than breaking up ASCAP entirely, the government entered into a consent decree that imposed specific rules on how it could operate. Shortly after, BMI was placed under a similar agreement.

These decrees were designed to address a clear problem: a concentrated market where access to music could be restricted or priced without meaningful competition. The goal was to keep the licensing system functioning while preventing the kind of control that had triggered the dispute in the first place.

How Consent Decrees Actually Work

Once the decrees were in place, the focus shifted from who controls the catalog to how that catalog is made available.

In practice, ASCAP and BMI operate as licensing hubs. They represent large pools of compositions and offer access through standardized licensing structures, the most common being the blanket license. That license gives a music user the ability to perform any work in the PRO’s catalog without negotiating individual permissions.

What the decrees change is the level of discretion the PROs have in that process.

A business that wants to use music does not need to negotiate from scratch or prove its importance to the catalog. It can request a license and expect to receive one under reasonable terms. That expectation is built into how the system functions, and it applies whether the user is a national streaming service or a single-location venue.

Negotiations still happen, especially around pricing and scope. Large licensees often negotiate detailed agreements that reflect how their service uses music. Smaller users typically fall into established rate categories. In both cases, the starting point is not unlimited negotiation, but a framework shaped by the decree.

Disagreements are handled differently than in a purely open market. If a PRO and a licensee cannot agree on a rate, either side can bring the matter to a federal court in the Southern District of New York. The court reviews the evidence and sets a fee that both sides must follow. That mechanism removes the possibility of a complete stalemate, but it also means that some pricing decisions are ultimately made by judges rather than by the parties involved.

On the rights holder side, the system works through aggregation. Songwriters and publishers place their works with a PRO, and those works become part of the catalog that is licensed as a whole. Individual control over licensing decisions is limited once the rights are inside that system, but in return, the works gain access to a broad licensing network that reaches across industries and territories.

What you end up with is a system that still negotiates, still competes, and still evolves, but does so within boundaries that were put in place to prevent the kind of market control that triggered the original intervention.

How Consent Decrees Actually Work

Once ASCAP and BMI were placed under consent decrees, their role in the market did not disappear. What changed was the way they were allowed to exercise that role.

In practice, the decrees shape licensing through a set of operating rules that affect both music users and rights holders.

• They must offer licenses to music users who request them. A business that wants to publicly perform music from ASCAP or BMI’s catalog cannot simply be refused access. This is one of the most important effects of the decrees. It prevents a PRO from using the size of its catalog as a way to shut users out of the market or force them into impossible negotiations.
• They must license on nondiscriminatory terms. Similar users are meant to be treated on similar terms. A PRO cannot favor one broadcaster, streaming service, venue chain, or digital platform over another just because of size, leverage, or business relationship. That does not mean every deal is identical, but it does mean the pricing structure must remain justifiable and even-handed.
• Blanket licenses remain the default structure. In most cases, users obtain a blanket license that gives them access to the full catalog represented by the PRO. This keeps licensing practical. A service or venue does not need to clear songs one by one, which would be unworkable at scale. The decrees help preserve that structure by keeping the blanket license broadly available.
• Rate disputes can be taken to court. If negotiations fail, the dispute does not simply sit unresolved. Either side can ask a federal judge in the Southern District of New York to set a reasonable fee. This is what makes the rate court system so central to consent decree discussions. It acts as a backstop when private negotiation stalls.
• Publishers cannot selectively withdraw only certain uses under the current framework. A publisher cannot keep some public performance rights inside a PRO while pulling out only certain categories, such as digital uses, for separate negotiations. That rule protects the integrity of the blanket license, but it also limits how flexibly publishers can respond to changes in the digital market.
• The PROs operate under continuing judicial and government oversight. These are not one-time rules that were imposed and forgotten. The decrees remain enforceable legal agreements, and any major changes to how they function involve oversight from the Department of Justice and, in some cases, the courts.
• Songwriters and publishers license through aggregation rather than individual negotiation. Once a work is placed with ASCAP or BMI, it becomes part of a larger catalog that is licensed collectively. That makes broad market access possible, but it also means the individual rights holder is participating in a regulated system rather than setting separate public performance terms for each user.

Key Rules That Shape Licensing

Consent decrees show up in a few core rules that directly affect how licenses are offered, priced, and enforced. These are the parts that actually shape day-to-day licensing outcomes for users and rights holders.

• Nondiscriminatory licensing terms. ASCAP and BMI cannot offer materially different terms to similarly situated users without a clear basis. A national broadcaster and a comparable competitor should not be charged wildly different rates for the same type of use. This keeps pricing from being driven purely by leverage or relationships.
• Mandatory access to licenses. A user that wants to perform music from the catalog can request a license and expect to receive one. Access is not contingent on negotiation strength or market position. This is what allows small venues, startups, and new platforms to operate without clearing rights one song at a time.
• Blanket licensing as the default. Most users take a blanket license that covers the entire catalog. That structure exists because clearing millions of compositions individually is not realistic. The decrees keep that option available and prevent the catalog from being fragmented in a way that would make licensing impractical.
• Rate court as a fallback for disputes. When negotiations stall, either side can bring the dispute to a federal judge in the Southern District of New York. The court reviews evidence and sets a rate that both parties must follow. This creates a defined path forward instead of leaving disputes unresolved.
• No selective or partial withdrawal of rights. Publishers cannot remove only certain categories of rights, such as digital uses, while leaving the rest with the PRO. The choice is all in or all out for public performance rights within that organization. This rule keeps the catalog intact for blanket licensing but limits how rights can be carved up for separate deals.
• Oversight by the Department of Justice and the courts. The decrees are enforced legal agreements, not internal policies. Changes to how they operate involve review by the United States Department of Justice and, where necessary, court approval. That layer of oversight keeps the structure in place over time.
• Centralized licensing through PROs. Songwriters and publishers place their works with a PRO, which then licenses those works as part of a larger catalog. Individual deals for public performance rights are not the default path once those rights are inside the system. 

How Rate Courts Set License Fees

When a music user and a PRO cannot agree on a price, the negotiation does not just stall out. It moves into a formal process known as rate court.

For ASCAP and BMI, these cases are handled by federal judges in the Southern District of New York. Each PRO has a designated court, and those courts are responsible for deciding what a “reasonable” license fee looks like when both sides disagree.

The process starts when either the PRO or the music user files a petition. From there, both sides present their arguments, which usually include:

• financial data about the business using the music
• how music is used within that business
• comparisons to similar licensing deals
• expert testimony on market value

The court reviews that information and sets a rate that both parties must follow. This decision applies for a defined period, after which rates can be revisited.

One important detail is timing. A music user can often continue using music while the rate is being determined. Payment is settled later based on the court’s decision. That dynamic affects how negotiations play out, since the user is not forced to stop operations while waiting for a final number.

The role of the judge is not to favor one side, but to land on a rate that reflects fair market value within the constraints of the system. In practice, that has led to ongoing debates. Rights holders often argue that court-set rates can lag behind the market, while licensees point to the system as a safeguard against sudden or excessive pricing.

Rate courts are not involved in every license. Most agreements are still negotiated directly. Their importance comes from what happens when those negotiations break down, and a final decision is needed.

Consent Decrees After the Music Modernization Act

The Music Modernization Act introduced changes that affect how consent decrees are reviewed and how rate-setting is handled in court.

• Congress is now part of the review process. The United States Department of Justice must notify Congress before recommending any changes to the consent decrees. This step brings additional scrutiny and makes large-scale revisions more visible and slower to implement.
• Rate courts can consider broader market data. Judges are no longer limited in the same way when evaluating what counts as a reasonable license fee. They can look at a wider range of comparable data, including information from outside traditional PRO licensing structures.
• Cases are assigned to different judges over time. Rate court proceedings are now distributed among judges on a rotating basis within the Southern District of New York. This reduces reliance on a single judge’s long-term interpretation and introduces variation in how cases are evaluated.
• Oversight extends beyond the courts. The relationship between legislative and judicial oversight is more closely tied. Any movement to adjust the consent decree framework now involves both legal review and political consideration.
• Core licensing rules continue to apply. ASCAP and BMI still operate under the same baseline requirements, including nondiscriminatory licensing, mandatory access to licenses, and the use of rate courts when negotiations break down. 

Why Consent Decrees Matter Today

Consent decrees still sit at the center of how public performance rights are licensed in the United States, but the environment around them has changed in ways the original framework did not anticipate.

• Streaming platforms rely on predictable access to large catalogs. Services like Spotify or Apple Music need immediate, scalable access to millions of songs. The blanket licensing structure supported by the decrees makes that possible. Without it, every track would require individual clearance, which would slow down or limit how platforms operate.
• Digital services operate at a scale that amplifies pricing disputes. A rate difference that might seem small on paper becomes significant when applied across billions of streams. That scale is one reason rate court decisions attract attention from both rights holders and licensees, especially when digital revenue continues to grow.
• Algorithm-driven usage changes how music is consumed. Listening is no longer driven only by radio or programmed playlists. Recommendation systems and user-driven playback shift how often and where songs are performed. This affects how value is perceived and raises questions about whether existing rate structures reflect current usage patterns.
• Global distribution meets a U.S.-specific regulatory system. Platforms operate globally, but consent decrees apply only within the United States. That creates differences in how licensing works across territories, especially when services compare rates or negotiate multi-region agreements.
• Independent publishers and songwriters have more visibility and leverage than before. Digital distribution has expanded access to the market. More rights holders are paying closer attention to how their works are licensed and how rates are set. That increased participation feeds into ongoing discussions about whether the current system reflects modern market dynamics.
• Data transparency and reporting expectations are higher. Platforms and rights organizations now generate detailed usage data. With more information available, both sides are better equipped to argue for or against specific rate structures, especially in rate court proceedings.
• New technologies introduce new licensing questions. AI-generated music, user-generated content platforms, and emerging digital formats continue to test how public performance rights are defined and valued. These developments raise questions about how flexible the current consent decree framework is when applied to newer use cases.

Consent decrees continue to provide structure, but the way music is created, distributed, and consumed keeps evolving around them. That tension is what keeps them relevant and under review.

Benefits for Songwriters, Publishers, and Licensees

Consent decrees affect different groups in different ways. For some, they provide access and stability. For others, they limit flexibility. The impact depends on where you sit in the system, whether you are creating, administering, or using music.

The table below breaks down how each group benefits in practical terms.

Criticisms and Ongoing Debates

The same rules that create stability for licensing also create friction. As the industry has shifted toward digital and global distribution, more stakeholders have questioned whether the current framework still reflects how music is used and valued.

• Rates may not reflect current market value. Songwriters and publishers have argued that court-set rates can lag behind the broader market, especially as streaming revenue has grown. This tension has surfaced in rate proceedings involving services like Pandora, where disputes over licensing fees highlighted the gap between negotiated expectations and court outcomes.
• Rate court proceedings are slow and expensive. Taking a dispute to court requires time, legal resources, and expert testimony. Large platforms and PROs can absorb those costs more easily than smaller players. Cases can take years to resolve, which affects how quickly rates can adjust to market changes.
• Music can be used before a final rate is set. Licensees are generally allowed to continue using music while a rate case is ongoing. Payment is finalized later based on the court’s decision. Rights holders have argued that this reduces urgency in negotiations and shifts leverage toward users.
• Restrictions on partial withdrawal limit flexibility. Publishers cannot selectively remove certain rights, such as digital uses, while keeping others with a PRO. This became a major point of contention when publishers attempted to withdraw digital rights to negotiate directly with streaming platforms and were prevented under existing rules.
• Government oversight may slow adaptation to new technologies. Changes to the consent decree framework involve review by the United States Department of Justice and, in some cases, Congress. That process can make it difficult to respond quickly to developments like streaming, user-generated content, or AI-related use cases.
• Different rules apply to different PROs. SESAC and Global Music Rights are not bound by consent decrees. They negotiate licenses without the same constraints, which creates an uneven regulatory landscape across the PRO system.
• Ongoing government review keeps the debate active. The DOJ conducted a formal review of the consent decrees in the mid-2010s and ultimately chose not to make major changes at that time. That decision did not end the discussion. Industry groups, publishers, and digital services continue to push for updates or alternatives that better reflect current market conditions.

All of these issues come up in real negotiations and policy discussions. Some focus on flexibility and pricing, others on access and safeguards. The system sits between those pressures, which is why the debate has not settled.

Frequently Asked Questions

What is a consent decree in music? A consent decree is a court-approved agreement that sets rules for how a company operates. In music, it refers to the agreements that govern how ASCAP and BMI license public performance rights.

Why do ASCAP and BMI have consent decrees? They were placed under these agreements after concerns that their control over large catalogs could limit competition. The decrees set boundaries on pricing, licensing access, and how disputes are handled.

Do all PROs operate under consent decrees? No. SESAC and Global Music Rights are not bound by consent decrees and negotiate licenses without the same restrictions.

What is a blanket license? A blanket license allows a music user to access the entire catalog of a PRO without clearing each song individually. It is the most common way businesses license public performance rights.

What happens if a PRO and a music user cannot agree on a price? Either side can take the dispute to a rate court in the Southern District of New York. A judge reviews the case and sets a license fee that both sides must follow.

Can publishers remove only part of their catalog from a PRO? No. Under the current framework, publishers cannot selectively withdraw certain rights, such as digital uses, while leaving others with the PRO. The choice applies to the entire set of public performance rights within that organization.

Did the Music Modernization Act remove consent decrees? No. The Music Modernization Act introduced changes to oversight and rate-setting considerations but did not eliminate the consent decree system.

Why are consent decrees still debated today? The way music is consumed and monetized has changed significantly with streaming and digital platforms. That shift has led to ongoing discussions about whether the current rules still reflect how the market operates.

Key Takeaways

• Consent decrees are court-approved agreements that regulate how ASCAP and BMI license public performance rights in the United States.
• They were introduced after concerns about market control, particularly when ASCAP held a dominant share of commercially valuable compositions and could influence licensing terms without meaningful competition.
• These rules require PROs to offer licenses to music users, apply nondiscriminatory terms, and make catalog access broadly available through structures like blanket licenses.
• When pricing disputes arise, either side can bring the matter to a rate court in the Southern District of New York, where a judge determines a reasonable license fee.
• Publishers and songwriters participate through a pooled system. Once works are placed with a PRO, they are licensed as part of a larger catalog rather than through individual negotiations.
• The framework limits selective control over rights. Publishers cannot withdraw only certain uses, such as digital rights, while keeping others within the PRO.
• The Music Modernization Act introduced updates that affect how consent decrees are reviewed and how rate courts evaluate evidence, including broader consideration of market data and rotating judicial assignments.
• Consent decrees support broad access to music for platforms, venues, and broadcasters while providing a structured system for royalty collection and distribution.
• At the same time, they are often criticized for slow rate-setting processes, legal costs, and limitations on how rights holders negotiate in a changing digital market.
• New technologies, including streaming platforms, algorithm-driven consumption, and emerging formats like AI-generated content, continue to raise questions about how well the current system fits modern use cases. 

Practical Resource

Consent Decree Licensing Flow (PDF)

A step-by-step visual guide showing how music licenses are negotiated under consent decrees, including what happens when parties cannot agree and how rate courts determine fees.

References

ASCAP

https://www.ascap.com/

BMI

https://www.bmi.com/

United States Department of Justice. Antitrust Consent Decree Review

https://www.justice.gov/atr/antitrust-consent-decree-review-ascap-and-bmi-2019

United States Department of Justice. ASCAP Consent Decree

https://www.justice.gov/atr/case-document/file/485966/dl

U.S. Copyright Office. Music Modernization Act

https://www.copyright.gov/music-modernization/

Pandora rate court case coverage

https://www.reuters.com/article/us-usa-court-ascap-pandora-idUSKCN0Z22QO

SESAC

https://www.sesac.com/

Bates White. Pandora v. ASCAP Engagement Overview.

https://www.bateswhite.com/engagements/Pandora-ASCAP