[Editor Charlie sez: It appears that the pressure on the Copyright Office to supervise black box distribution practices by the conflict-ridden Mechanical Licensing Collective procedures has resulted in a commitment to hold the initial distribution until 2023. It is unclear if this also means that the designated MLC cannot offset its startup costs against the black box. As Ed Christman reported in Billboard on June 26, 2019 (“House Judiciary Hearing on Copyright Office Reviews Music Modernization Act, Black Box Royalty Concerns”) the Copyright Office intends to commence their best practices study after designating the MLC on July 8, which should give everyone an opportunity to weigh in on how the MLC should operate. Commenters could include the digital services who could voluntarily disclose the efforts that they and their outside vendors had in place during the period that the black box accrued.]
[U.S. Register of Copyrights Karen A.] Temple repeatedly assured the committee that the MMA gives the Copyright Office responsibility to distribute the black box money appropriately, noting that in addition to the agreement not to distribute before 2023, the Copyright Office has the responsibility to review the processes that the MLC is engaging to reduce black box money.
Here is the code section from MMA about the Copyright Office study that appears to be the basis for regulations on the MLC’s distribution of unmatched funds:
UNCLAIMED ROYALTIES STUDY AND RECOMMENDATIONS.— (1) IN GENERAL.—Not later than 2 years after the date on which the Register of Copyrights initially designates the mechanical licensing collective under section 115(d)(3)(B)(i) of title 17, United States Code, as added by subsection (a)(4), the Register, in consultation with the Comptroller General of the United States, and after soliciting and reviewing comments and relevant information from music industry participants and other interested parties, shall submit to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives a report that recommends best practices that the collective may implement in order to— (A) identify and locate musical work copyright owners with unclaimed accrued royalties held by the collective; (B) encourage musical work copyright owners to claim the royalties of those owners; and (C) reduce the incidence of unclaimed royalties.