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preventing the PROs from licensing such works to digital music users; second, to streamline the
process by which fee disputes are resolved; and, third, to permit the PROs to offer licenses to
rights other than the public performance right, particularly for users who also need a
performance license. Music users proposed additional changes, in particular to promote
increased transparency and clarify rules surrounding “licenses-in-effect,” i.e., how withdrawals
from a repertory affect the scope of licenses granted by the PROs.
As the Division considered the implications of these proposed changes, particularly
partial withdrawal, stakeholders on all sides raised questions about the treatment of multi-owner
works. Music users claimed that the PROs had always offered licenses to perform all works in
their repertories, whether partially or fully owned, and urged modifications to confirm their view.
Rightsholders, by contrast, claimed that the PROs had never offered full licenses to perform
fractionally owned works, and also urged modifications to confirm their view. ASCAP and BMI
did not concede that the existing consent decrees prohibited fractional licensing, but proposed
that their consent decrees be modified to explicitly allow them to offer fractional licenses.
Historically, the industry has largely avoided a definitive determination of whether ASCAP and
BMI offered full-work or fractional licenses because the vast majority of music users obtain a
license from ASCAP, BMI, and SESAC and pay those PROs based on fractional market shares.
These practices made it unnecessary, from both the user and rightsholders perspective, to sort out
whether the ASCAP and BMI licenses are full-work or fractional; users have held licenses that
collectively cover all works and rightsholders have been paid for their works by their own PROs
without having to worry about accounting. However, recent events, including the Division’s
review, have made it necessary to confront the question.
The question of whether ASCAP and BMI licenses are or should be fractional or full-