BMI Rates Under College License Clarified

February 3, 2006

BMI, one of the three organizations that offers blanket licenses to colleges and universities to cover copyright obligations for public music performance, sent out revised invoices this week to college and university clients. Under the five-year agreements negotiated by the American Council on Education and NACUBO in 2002, rates for the current year were to be adjusted for inflation. Due to ambiguities in the language of the model licensing agreements about the CPI adjustment, NACUBO and ACE have come to a new understanding with BMI on the rates that will be charged for this year and next year.

Two issues emerged regarding how BMI calculated the adjustment as reflected in its original bills in January. One was a rounding error, where BMI had rounded to the nearest tenth of a dollar rather than to the nearest tenth of a cent. BMI has recalculated the per-student rate to correct this error.

The second issue was more difficult to resolve. The parties do not agree about the intent, and the language in two sections of the agreement are in conflict. Therefore, a compromise was reached whereby the adjustment for 2005-06 adds 8.5 percent (the difference in the CPI between July 2002 and July 2005) to the per-student rate for the 2004-05 year. The figures below reflect that calculation. However, BMI has agreed to forgo any further adjustments to its rates for 2006-07.

The rates for 2006-07 will be:

	One Tier License	Two Tier License	Cable License
Per-Student Rate	$0.289	$0.268	$0.569
Minimum	$235.00	$188.00	N/A

The rate for radio stations is a "compulsory" rate set by the Library of Congress and is not affected.

ACE and NACUBO negotiate these model licensing agreements as a service to members but are not parties to the contracts and cannot make commitments on behalf of members. Institutions will have to make their own determinations, but ACE and NACUBO recommend accepting the rate structure detailed above.

NACUBO contact: Anne Gross, vice president, regulatory affairs, 202.861.2544.