Copyright Office Regulates @MLC_US: Selected Public Comments on MLC Transparency: @MusicReportsInc

[Editor Charlie sez: The U.S. Copyright Office is proposing many different ways to regulate The MLC, which is the government approved mechanical licensing collective under MMA authorized to collect and pay out “all streaming mechanicals for every song ever written or that ever may be written by any songwriter in the world that is exploited in the United States under the blanket license.”  The Copyright Office is submitting these regulations to the public to comment on.  The way it works is that the Copyright Office publishes a notice on the copyright.gov website that describes the rule they propose making and then they ask for public comments on that proposed rule.  They then redraft that proposed rule into a final rule and tell you if they took your comments into account. They do read them all!

The Copyright Office has a boatload of new rules to make in order to regulate The MLC.  (That’s not a typo by the way, the MLC styles itself as The MLC.)  The comments are starting to be posted by the Copyright Office on the Regulations.gov website.  “Comments” in this world are just your suggestions to the Copyright Office about how to make the rule better.  We’re going to post a selection of the more interesting comments.

There is still an opportunity to comment on how the Copyright Office is to regulate The MLC’s handling of the “black box” or the “unclaimed” revenue.  You can read about it here and also the description of the Copyright Office Unclaimed Royalties Study here.  It’s a great thing that the Copyright Office is doing about the black box, but they need your participation!

This comment from Music Reports gives some interesting insights into how The MLC is favoring the NMPA’s formerly wholly-owned Harry Fox Agency (HFA) which has been on the wrong side of most of the licensing debacles.  Chris posted some analysis on MediaNet’s comment and criticisms of the HFA-The MLC contract as well as its rather odd timeline as revealed at The Copyright Office roundtables on the next cluster jam, the unclaimed royalties.  At least that has the entertainment value of watching them steal in plain site with the Copyright Office drinking game of who will make the excuses for them this time like we don’t notice.  We’re not big MRI fans (or MediaNet fans for that matter), but when they’re right, they’re right.

The sad truth is that this entire MLC exercise has become about the rich getting richer from a data land grab for independent songwriters and publishers who have been duped into thinking it’s all for their benefit.  It was all so predictable, but nobody listened.  This is what they wanted, and now they’ve got it.  How about a rule that says if you had your fingerprints on any part of the debacle of the last 20 years, you are immediately disqualified?  Bye bye HFA, NMPA, MRI, MediaNet.  Unfortunately that is not and never will be the rule because these are the same people who make the rules and are the same people who gave songwriters frozen mechanicals from 1909-1978 and are still freezing the 9.1¢ statutory royalty for fourteen years.

MRI could have done with some editing, but stick with it, they make a lot of sense.]

Read Music Reports entire comment here.

Music Reports generally agrees with, endorses, and echoes the views of MediaNet as stated in the response to the NOI it filed today. 

Music Reports also takes note of the MLC’s selection of HFA as a major provider of the capabilities required for its core operations. While the MLC is narrowly limited by the MMA to the principal purpose of administering the blanket license for Section 115-compliant audio-only streaming music services in the United States, and specifically prohibited from storing data about or administering public performance licenses, HFA/SESAC is not so constrained. 

On the contrary, HFA/SESAC is free, as a non-regulated, for profit commercial music rights administration service, to administer any type of mechanical licenses. Moreover, SESAC, administers performance rights on a for-profit basis in competition with other PROs. Being hired by the MLC does not change the fact that HFA/SESAC is in competition with other commercial music rights administration services that are not the beneficiaries of a long term, highly-paid contract with the MLC. This is fair enough, so far is it goes. 

But as noted above, the boundaries between HFA/SESAC’s database and that which the MLC must build and make publicly available are completely unknown [want to bet that’s because they don’t exist?], as is the timeframe during which the former will substitute for the latter, and whether a proprietary MLC database built independently of HFA’s data will ever be the basis on which the MLC renders royalty distributions.

What is known, however, is that the MLC will enjoy publicity generated by its own statutory mandates (subsidized by the DLC), by the DLC itself, and by the Office, all of whom are authorized and required to devote budgetary allocations to direct publishers’ attention to registering their rights data with the MLC (the database of which is, for the foreseeable future, that of HFA/SESAC). Notwithstanding that the primary purpose of these provisions may be to publicize the existence of the database and of available unclaimed royalties, the consequence will be the direction of resources toward the focus of copyright owners’ attention on just one of several important, pre-existing music rights registries. This is in effect a set of reinforcing government subsidies of which one private enterprise, in competition with other marketplace actors, is the beneficiary. 

To the extent HFA/SESAC directly benefits unfairly from a privileged place in the data ecosystem by virtue of this arrangement, the goal of the MMA to create a healthier music rights administration ecosystem will be perversely harmed by the creation of an uneven playing field that penalizes the investments in data made by other services. To be sure, other commercial services are free to compete with HFA to offer services to the MLC and others in the marketplace. But over time, a privileged place in the market’s information flow may distort competition to the determent of copyright owners and their administrators, DMPs, and the public. 

Luckily, the Office can prevent this result quite simply by requiring that the MLC provide access to its public database on a competition-neutral basis. 

As was noted above, there is an important temporal aspect to the management of music rights data. In order for two administrators to efficiently interoperate, they must be able to have a more or less shared contemporary view of the data about the works they are administering, even if they don’t always agree on every detail. 

Therefore, the specific prescription called for here is a combination of the points made in the previous sections above: (a) the Office should use its authority under the MMA to adopt such regulations as it deems necessary to clarify that the public database which the MLC must establish and maintain will be identical to or at least contain the same data as the database on which the MLC will distribute royalties; (b) the MLC should make its public database available contemporaneously with the commencement of its royalty distribution efforts; and (c) the MLC must offer eligible parties bulk, machine-readable access to such data “on a basis that is both comprehensive and as frequent as necessary to efficiently manage the licensing and royalty distribution activities of the mechanical licensing collective itself, and not less than daily access to changed information within a day of any change to such information.” 

Why So Secretive? Copyright Office’s Public Consultation on Setting Rules for MLC’s Operation: Future of Music Coalition

From the editors at The Trichordist

[The Copyright Office is bravely trying to regulate The MLC to keep the MMA from becoming a feeding frenzy for the data lords.  As Chris Castle said in his comment on what should be stamped “Confidential” and kept away from songwriters: “The premise of confidential information under Title I is that there is in rock and roll certain information deserving of government-mandated secrecy.”  Or as Otis said, too hot to handle.  Keep that in mind–when they say “confidential information” they mean information they can keep away from you.

We are going to excerpt some of the good comments that support independents in the other Copyright Office “rulemaking” consultation that just closed devoted to confidential treatment of data by The MLC and the DLC.  You can read them all here.]

The Future of Music Coalition made some great points in their filing, read the whole thing here.

Restrictions on use by MLC and DLC Vendors and Consultants FMC shares concerns expressed by other commenters about the possibility of vendors using confidential data for competitive advantage or purposes beyond what the MLC was created to do. There should be no provision for HFA to use confidential data for “general use”, even on an opt-in basis. The risk of anti-competitive harm is too great.

Download a copy here

June 10, 2020

Mr. Brewster Kahle
Founder and Digital Librarian
Internet Archive
300 Funston Avenue
San Francisco, CA 94118 Dear Mr. Kahle:

I write to you again as Chairman of the Senate Judiciary Committee Subcommittee on Intellectual Property. In my April 8, 2020 letter, I expressed my concern that the Internet

Archive’s announcement of a National Emergency ” Library” filled with 1.4 million books that had been digitized and made available to the public without restrictions and without the permission of copyright owners appeared to be a blatant infringement of thousands – if not more-of copyrights.1   Indeed, the U.S. Copyright Office analyzed  publicly available facts and concluded that though some works included in the National Emergency “Library” might be permitted under fair use, many would not be. The Copyright Office went on to say that “while the Internet Archive’s goal of making research and educational materials publicly available may be laudable, so is respect for copyright.”2

I write now after learning that the Internet Archive is engaged in other initiatives that involve the unauthorized digitization and dissemination of copyright-protected creative works- in this case sound recordings .

According to a May 15, 2020 article in the Seattle Times, the Internet Archive has purchased Bop StreetRecords full collection of 500,000 sound recordings with the “inten[t] to digitize the recordings and put them online, where they can be streamed for free.”3 It is not clear from the article, or others, if you intend to digitize all of the sound recordings acquired  from Bop Street. But it is clear that these sound recordings were very  recently  for sale in a commercial  record shop and likely contain many sound recordings that retain significant commercial value. This raises serious alarms about copyright infringement.

As I understand, Bop Street Records, which the Wall Street Journal once deemed a top-five record shopin the country, focuses on collectible-quality vinyl records across a diverse range of musical genres. According to its website, there sound recordings includes “Rock, Soul/R&B, Jazz, Blues, Classical, Country, World and many other genres from the 1920’s to 1990’s.” The overwhelming majority-if not all-of these sound recordings are protected by U.S. copyright law, and thus may not be digitized and streamed or downloaded without authorization.

In a similar vein, I am aware of the Internet Archive’s “Great 78 Project,” which has already digitized-and continues to digitize daily-a vast trove of 78 rpm recordings, many of which are also commercially valuable recordings already in the marketplace, and has made those recordings available to the public for free through unlimited streaming and download. I understand that the Internet Archive is framing this and its other sound recording projects­ which include both obscure gems for music fans and hits from the likes of Elvis Presley, Chuck Berry, and Johnny Cash-as preservation, but your current practices raise numerous potential issues of copyright infringement. The Bop Street collection is likely to add to that. Among other things, your sound recording projects do not appear to comply with the relevant provisions of the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (MMA), which deals only with pre- 1972 sound recordings and would not allow for streaming or downloading. Moreover, there are additional copyrights, such as the musical composition and the album artwork, that are displayed on the Internet Archive website and would not be covered by an exception for preservation.

I recognize the value in preserving culture and ensuring that it is accessible by future generations, such as the Library of Congress’s Recorded Sound Collection and National Recording Registry projects. But I am concerned that the Internet Archive thinks that it-not Congress-gets to determine the scope of copyright law.  With its sound recording projects, the Internet Archive does not even pretend that a national emergency like the Covid-19 pandemic creates a special need for these sound recordings to be freely streamed or downloaded.  Rather, the Internet Archive seems to be daring copyright owners to sue to enforce their rights, or else effectively forfeit them-something many copyright owners, particularly individuals and smaller enterprises, cannot afford to do.

Our copyright system is designed with important limitations and exceptions that ensure that the public can make appropriate uses of copyrighted works even when the copyright owner seeks to prevent such uses-but those are the exception, and free use for those who disagree with the concept of exclusive rights is notone of them. Accordingly, I once again invite you to share with me the legal support, in copyright law or elsewhere, for reproducing and distributing copyrighted works that are owned by others. In particular, how do the Internet Archive’s sound recording digitization and streaming projects-in particular the Great 78 Project-fit within case law interpreting the fair use doctrine and within the relevant provisions of section 108 and the MMA?

Please respond by July 10 , 2020. If you have any quest ions, please do not hesitate to contact me.

Sincerely,

Thom Tillis
Chairman
Subcommittee  on Intellectual Property

 

1 Since then , I understand  that  major  American  book publishers-  Hachette  Book Group,  HarperCollins  Publishers, John Wiley & Sons and  Penguin  Random  House  –  filed  a  lawsuit  alleging  copyright  infringement  and  seeking  to enjoin uses of their copyrighted books in the  National  Emergency  Library  or  the  Internet  Archive’s  “Open  Library,” which had offered the same catalog of books but  with  some  limitations , such as checkout  waitlists.  SeHatchette Book Grp. v. Internet Archive, No. I :20- cv- 041 60 (S. D.N .Y . filed June I , 2020).

2   Letter from  Maria Strong, Acting  Register  of Copyrights,  U.S. Copyright  Office , to Sen. Tom  Udall , at 21  (May 15, 2020).

3 Paul de Barros , A Happy Ending for Seattle’s Bop Street Records: A Nonprofit Buys Up the Entire Collection, SEATTLE TIMES (May 15, 2020) , https://www .seattletimes.com /entertainment/music/a-happy-ending-for-seattles­ bop-street-records-a- nonprofit-buys- up -the-entire-collection/.

via Brewster Kahle Gets Another Tillis-Gram For Internet Archive’s National Emergency Ripoff, this Time with Added Songs and No Mechanicals — Music Technology Policy

Copyright Office Regulates @MLC_US: Selected Public Comments on MLC Transparency: @CISACNews and BIEM

[Editor Charlie sez: The U.S. Copyright Office is proposing many different ways to regulate The MLC, which is the government approved mechanical licensing collective under MMA authorized to collect and pay out “all streaming mechanicals for every song ever written or that ever may be written by any songwriter in the world that is exploited in the United States under the blanket license.”  The Copyright Office is submitting these regulations to the public to comment on.  The way it works is that the Copyright Office publishes a notice on the copyright.gov website that describes the rule they propose making and then they ask for public comments on that proposed rule.  They then redraft that proposed rule into a final rule and tell you if they took your comments into account. They do read them all!

The Copyright Office has a boatload of new rules to make in order to regulate The MLC.  (That’s not a typo by the way, the MLC styles itself as The MLC.)  The comments are starting to be posted by the Copyright Office on the Regulations.gov website.  “Comments” in this world are just your suggestions to the Copyright Office about how to make the rule better.  We’re going to post a selection of the more interesting comments.

There is still an opportunity to comment on how the Copyright Office is to regulate The MLC’s handling of the “black box” or the “unclaimed” revenue.  You can read about it here and also the description of the Copyright Office Unclaimed Royalties Study here.  It’s a great thing that the Copyright Office is doing about the black box, but they need your participation!

Comments from CISAC and BIEM are the best guide to how well The MLC working for songwriters outside the U.S.  So far it’s definitely “Somebody gimme a cheeseburger”.  There are some fundamental disconnects that are sooo predictable, but The MLC so far has done nothing to fulfill the international part of its mandate that applies to every song ever written or that may ever be written by anyone anywhere in the world.

The MLC may think they can simply ignore the international community, but the Copyright Office knows the U.S. cannot.  This is how the U.S. ended up losing a WTO arbitration over the idiotic Fairness in Music Licensing Act that quietly cost the American taxpayer millions that nobody ever wants to talk about.  That arbitration award is a direct subsidy to music users that they would never have gotten through the front door in a tax increase–and it’s not for the benefit of American songwriters, either.   Can you imagine if Members of Congress were told “here’s a bill that will transfer money from American taxpayers to foreign songwriters and expressly excludes American songwriters?”  Probably not a winner, eh?

Read the comment from CISAC and BIEM here.  CISAC describes itself as “the leading worldwide network of authors’ societies representing four million creators via 232 members in 121 countries.”  BIEM describes itself as “the international organisation representing mechanical rights societies. Mechanical rights societies exist in most countries.”  Remember, they tried to be nice.]

A preliminary observation that underpins the entire NOI, and which is also included in CISAC and BIEM’s concurrent comments to the Proposed Rulemaking on Treatment of Confidential Information, is that it is necessary to clarify the concept of “copyright owner” in the context of the mechanical rights administered by CMO members of BIEM and CISAC.

Indeed, in addition to what is usually considered a “copyright owner” in the U.S., including publishers and self-published creators, outside the U.S, foreign collective management organizations (CMOs), and specifically CMO members of BIEM and CISAC, are also considered copyright owners or exclusively mandated organizations of the musical works administered by these entities. This was already emphasized by CISAC and BIEM in the previous comments in the initial rounds of public consultation, clarifying that foreign CMOs are the copyright owners or mandated administrators of works partially or not (sub) published in the US, and as such, CMOs represented by CISAC and BIEM should be able to register in the MLC database the claim percentages they represent (CISAC/BIEM comments of the initial NOI -Dec 2019).

Therefore, it is of utmost importance that the Office is mindful of this concept of “copyright owner” in foreign jurisdictions when adopting the Regulations.

 

 

 

Copyright Office Regulates @MLC_US: Selected Public Comments on MLC Transparency: @KerryMuzzey

[Editor Charlie sez: The U.S. Copyright Office is proposing many different ways to regulate The MLC, which is the government approved mechanical licensing collective under MMA authorized to collect and pay out “all streaming mechanicals for every song ever written or that ever may be written by any songwriter in the world that is exploited in the United States under the blanket license.”  The Copyright Office is submitting these regulations to the public to comment on.  The way it works is that the Copyright Office publishes a notice on the copyright.gov website that describes the rule they propose making and then they ask for public comments on that proposed rule.  They then redraft that proposed rule into a final rule and tell you if they took your comments into account. They do read them all!

The Copyright Office has a boatload of new rules to make in order to regulate The MLC.  (That’s not a typo by the way, the MLC styles itself as The MLC.)  The comments are starting to be posted by the Copyright Office on the Regulations.gov website.  “Comments” in this world are just your suggestions to the Copyright Office about how to make the rule better.  We’re going to post a selection of the more interesting comments.

There is still an opportunity to comment on how the Copyright Office is to regulate The MLC’s handling of the “black box” or the “unclaimed” revenue.  You can read about it here and also the description of the Copyright Office Unclaimed Royalties Study here.  It’s a great thing that the Copyright Office is doing about the black box, but they need your participation!]

Read the comment by Kerry Muzzey

The launch of iTunes in 2001 began the democratization of music distribution: suddenly independent artists had a way to reach their fans without having to go through the traditional major label gatekeepers. Unfortunately most of those independent artists didn’t have a music business background to inform them about all of the various (and very arcane) royalty types and registrations that were required: and even if they did, Harry Fox didn’t let individual artists register for mechanicals until only recently.

The result? 19 years’ worth of unclaimed royalties by so many independent artists who have no idea how to access them.

We had hoped that the MMA would fix this, but the “black box” of unclaimed royalties is going to be distributed to the major publishers based on market share. We independent artists don’t have “market share” – but we do have sales and streams that are significant enough to make a difference to our own personal economies. A $500 unclaimed royalty check is to an independent musician what a $100,000 unclaimed royalty check is to a major publisher: it matters. Those smaller unclaimed royalty amounts are pocket change or just an inconsequential math error to the majors but they’re the world to an independent writer/publisher. And that aside, these royalties don’t belong to the majors: they belong to the creators whose work generated them.

Please, please, please: you have to make that database publicly accessible and searchable like Soundexchange does. There needs to be a destination where all of us can point our friends and social media followers to, to say “you may have unclaimed royalties here: go search your name.” They can’t remain in the black box and they can’t go to the major publishers. These royalties must remain in escrow and all means necessary should be used to contact the writers and publishers whose royalties are in that black box: absolute transparency is required here, as is a concentrated press push by the MLC to all of the music trades and music blogs (Digital Music News, Hypebot, et al) and social media platforms encouraging independent artists to go to the public-facing database and search their name, their publisher name, their band name, and by song title, for possible unclaimed royalties.

Please: the NMPA can’t be allowed to hijack royalties that do not belong to them. Publishers are fully aware of how complex royalty types and royalty collections are: they and the NMPA must make every effort here to ensure that unclaimed royalties reach their rightful legal and moral recipients.