We'd already talked about how the legacy players in the recording industry had lashed out at Pandora for buying a small radio station. As we noted, Pandora was doing this to more or less highlight the absolute hypocrisy (and possible illegality) of ASCAP who offers cheaper streaming rates for terrestrial radio stations to stream their programming online.

Since this stuff gets a bit confusing, as a reminder, ASCAP (along with others like BMI and SESAC) collect and distribute money for composers and publishers, not for musicians playing the music (though, obviously, sometimes the composers also play). ASCAP has a variety of different rates that it charges for things, and Pandora noted that its online competitors, such as iHeartRadio - which is owned by ClearChannel, the largest owners of terrestrial radio stations in the US. ASCAP has licenses for terrestrial radio and different licenses for online streaming.

ASCAP has been offering iHeartRadio and other terrestrial stations that also do streaming cheaper licenses for their streaming than it offers to Pandora. Pandora has argued that this violates the antitrust agreement that the DOJ made ASCAP agree to, after it was discovered that ASCAP was engaged in a variety of anti-competitive practices to restrict the market.

The hysteria over this from some less-than-well-informed folks in the music industry has really been quite incredible. Contrary to some claims that we've seen, Pandora is not trying to get a special deal. Nor is it trying to say that it doesn't have to pay performer rights (which are a whole different issue). All it's really doing is highlighting how ASCAP is discriminating against online-only streaming services by charging them different rates than online streaming services that happen to be owned by terrestrial radio stations.

The latest, however, is that ASCAP is now asking the FCC to block the purchase, mainly because ASCAP doesn't like it.

Pandora is buying KXMZ for one reason - to argue that it is entitled to pay lower music performance royalties to composers, songwriters and lyricists for its billions of online-only internet music streams.

Actually, it seems like Pandora is buying KXMZ to demonstrate that ASCAP has discriminatory and unfair pricing practices in how it offers its licenses. It's not that Pandora is claiming that it alone is magically entitled to lower royalties - it's pointing out that everyone else gets lower royalties and Pandora is wondering why it is singled out for higher royalties.

Honestly, that's about the extent of ASCAP's argument. Beyond that, it focuses on some procedural issues about the paperwork that Pandora filled out - ASCAP claims they didn't follow all the rules. But, clearly, ASCAP doesn't go around making sure that everyone buying radio stations has dotted their i's and crossed their t's. ASCAP is just upset that Pandora is suddenly calling attention to ASCAP's discriminatory online streaming rates. Even on the technicality's ASCAP is being particularly ridiculous. For example, it claims that Pandora did not properly disclose its ownership, because it claims that Pandora improperly referred to Wellington Management Company as "an investment adviser" in the past, but for this document, refers to it as "an investment company." That's the sort of minutiae ASCAP is pulling out to try to block this.

The whole thing is petty in the extreme. ASCAP clearly has discriminatory pricing practices against online-only streaming companies - and is embarrassed by Pandora making this point very clearly by purchasing this tiny radio station. Is it a move to "game" the system? Yes, it is but a move necessitated by ASCAP's discriminatory pricing. If ASCAP is so upset about this, perhaps it shouldn't have priced internet streaming differently depending on whether or not you own a radio station.