## Facts

- Fox Broadcasting Company (Fox), formed in 1986, acquired television programming and distributed it by satellite to its owned-and-operated stations and affiliated local stations.
- The American Society of Composers, Authors and Publishers (ASCAP) is a membership association that holds nonexclusive public-performance rights to members’ musical compositions and issues licenses, collects fees, and distributes royalties.
- ASCAP operated under a long-standing antitrust consent decree (originally entered in 1941 and amended in 1950) requiring it to offer blanket licenses and allowing music users to apply to the Southern District of New York for a court-set “reasonable fee” if negotiations fail.
- ASCAP had existing blanket licensing arrangements with the established television networks (ABC, NBC, and CBS).
- ASCAP also had a blanket licensing arrangement with a group of local television stations (including Fox’s affiliates), which collectively paid a fee and allocated the cost among themselves.
- As Fox expanded its programming and affiliate base, ASCAP sought to license Fox at the network level, similar to ABC, NBC, and CBS.
- Fox contended that the relevant public performances were already covered by its affiliates’ station-level licenses and argued that ASCAP’s demand risked duplicative payment for the same broadcasts.
- After negotiations did not produce an agreed-upon fee and ASCAP threatened litigation, Fox initiated a rate-court proceeding under the consent decree seeking relief concerning the terms and fee for any required network blanket license.

## Issues

1. Under the ASCAP consent decree, what is a reasonable blanket license fee for Fox’s television network for the relevant period?
2. In setting a reasonable fee, to what extent should the court rely on fee structures used for established networks (ABC, CBS, NBC), given Fox’s more limited schedule, audience reach, and revenues at the time?
3. How should the rate-court process address Fox’s claim that affiliate station licenses already covered the broadcasts, to avoid charging twice for the same value?

## Decision

- The court acted in its capacity as the ASCAP consent-decree rate court and determined the fee for a Fox network blanket license under the decree’s “reasonable fee” standard.
- The court concluded that Fox, operating as a network distributing programming to affiliates, was properly treated as a network-level licensee for ASCAP blanket licensing purposes.
- The court set a discounted fee for Fox that was materially lower than the rates paid by the established networks, based on evidence that Fox’s network at the time had fewer programming hours, smaller national reach, and lower advertising revenues.
- The court used prior network rate decisions as reference points but modified the benchmark to reflect Fox’s smaller scale so that the resulting fee approximated the market value of the blanket license to Fox.
- The court ordered ASCAP to offer the blanket license on the court-determined terms for the period at issue, resolving the parties’ rate dispute under the consent decree.

## Legal Principles

- Under the ASCAP consent decree, when a user and ASCAP cannot agree on price, the Southern District of New York may determine a “reasonable fee” for a blanket license.
- A “reasonable fee” is intended to approximate the fair market value of the blanket license in a competitive setting, not a price inflated by ASCAP’s collective licensing power.
- Prior rate-court determinations for comparable users (such as established broadcast networks) can serve as benchmarks, but the court must account for material differences in the user’s operations (including reach, schedule, and revenues).
- The value of a blanket license includes practical benefits beyond song-by-song clearances, including continuous access to the repertory and reduced risk of inadvertent infringement.
- In setting a network fee where affiliate stations also hold licenses, the rate court may consider structure and valuation to avoid unreasonable duplication while still compensating the rights holder for the distinct value provided to the network-level operation.

## Conclusion

United States v. ASCAP (In re Fox Broadcasting) is a consent-decree rate-court decision setting the reasonable ASCAP blanket license fee for Fox’s television network. Treating Fox as a network for licensing purposes, the court used established network fees as a reference but set Fox’s rate at a significant discount to reflect Fox’s smaller programming schedule, audience reach, and revenues at the time, aiming for a fee that matched the market value of the blanket license.


United States v. American Society of Composers, Authors and Publishers (In re Fox Broadcasting), 870 F. Supp. 1211 (1995)