@musictechpolicy: Controversial Bill On Music Licensing Has Nothing to Do with Small Business

I dreamed up a startling new technique to attempt to divine whether the true purpose of the controversial Transparency in Music Licensing and Ownership Act (or…”TIMLOA”?)  was intended to protect small business as advertised by the MIC Coalition.  I determined that the safe harbors  in the Transparency in Music Licensing and Ownership Act (or as it’s been called, The Shiv Act) was actually designed to protect the biggest of big business.

What startling new technique did I utilize?  I read the bill.

What you don’t find in the bill is anything that limits its application to small business.  Is it common in music licensing legislation to find such protections?  Absolutely.   This wasn’t what I expected to find given the braying of the Disco Ducks.  But then you know what they say…

The Fair Play Fair Pay Act, for example, has special protection in great specificity for small business like noncommercial broadcasters, public broadcasters and small broadcasters.

The Performance Rights Act (from the 110th Congress) also had very clear exemptions for small broadcasters.

While as a matter of propaganda it ignores these protections, the Local Radio Freedom Act (aka “The Pay Your Rent With Exposure Bucks Act”) is very clear about protecting a particular class of broadcasters: “local radio.”

Exposure Bucks

Yet none of this protective language appears in the Transparency in Music Licensing and Ownership Act.  Why doesn’t the TIMLOA have such limiting language if it’s actually all about protecting small business?  Maybe because it’s not about small business at all?  Maybe it’s about these guys in the MIC Coalition:

mic-coaltion-8-15

Realize some MIC Coalition members are themselves trade associations for companies with combined market capitalizations over $1 trillion.  When you see logos for Digital Media Association, the CEA (now called the Consumer Technology Association) and the Computer and Communications Industry Association (home of the Disco Ducks) these are themselves made up of massive companies like Apple, Amazon, YouTube and of course Google, not to mention Spotify.  True small business can’t afford these lobbyists and PR firms (like the Glen Echo Group) this starts to look like the astroturf plant it really is.

So don’t let them tell you that the Transparency in Music Licensing and Ownership Act  is about small business, unless the MIC Coalition would like to include the kind of protective language in their bill that our business has always included to protect the real small business.

 

@davidclowery: Here’s How You Know Mic-Coalition “Shiv Act” Is About Screwing Songwriters Not Transparency — The Trichordist

Yesterday we detailed one of the main problems with the so-called “Transparency in Music Licensing and Ownership Act” or as Artist Rights Watch termed it “The Shiv Act.” The bill would take away from songwriters legal remedies like attorney’s fees and statutory damages. Thus making it virtually impossible for individual songwriters and small […]

via Here’s How You Know Mic-Coalition “Shiv Act” Is About Screwing Songwriters Not Transparency — The Trichordist

@musictechsolve: Don’t Believe the Astroturf: Yet More Regulations Won’t Help Songwriters or Small Business

By Chris Castle

“[Government] interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding.”

James Madison, The Federalist Papers No. 44

There is a bill in Congress backed by the mega lobbying juggernaut called the MIC Coalition that would force songwriters and artists to “register” with the government in order to protect their rights from the biggest corporations in the world.  Failing to do so would take away the stick of statutory damages and an award of attorneys fees to songwriters or artists who are victorious in copyright infringement litigation.  Statutory damages and attorneys’ fees are the only real protection that the government gives these creators–the smallest of small businesses.

Why?  Because the government does virtually nothing to protect the rights of artists.  If it weren’t for statutory damages and attorneys’ fees there would be nothing between a creator and the ravages of mega-corporations.  Try calling a U.S. Attorney and asking them to prosecute a massive infringer.  If it hasn’t happened yet given the rampant piracy we’ve seen over the last 20 years now, it should tell you that it’s never going to happen with rich corporations that run roughshod over artist rights.

Yet songwriters in particular are some of the most highly regulated workers in America.  The government forces songwriters to license their work and sets the price they can license at–yet does nothing to enforce the “compulsory licenses” it imposes on songwriters.  Not only is the government in their lives at every turn, songwriters are poorly treated by their government.  Why?  One reason is that songwriters are among the smallest of small businesses and have little political clout.

That explains why the government imposes wage and price controls on songwriters through consent decrees and rate courts, but forgets to raise their wages for 70 years.  Can you imagine how that would go down if the government tried doing the same to auto workers or even the minimum wage?

The Rate that Time Forgot

When the government enacted the Fair Labor Standards Act in 1938, the government-mandated minimum statutory rate for songs was 2¢ per copy.  The hourly minimum wage was 25¢.   The government didn’t get around to raising the minimum statutory rate until 1978 when they raised it to from 2¢ to 2.75¢–the hourly minimum wage had then been raised from 25¢ to $2.65.  Shortly after, the government started indexing the minimum statutory rate from the rate that time forgot–had the government indexed to the rate of inflation from 1909 to 1978, the rate would have been closer to 13¢, a level it has yet to reach over 100 years after it was first set–today the rate is 9.1¢.

That’s a cruel mess.

What happens if a music user wants to avail themselves of the statutory license but simply refuses to pay the paltry royalty rate?  Nothing happens.  At least not unless the songwriter or their publisher sues for statutory damages and attorneys’ fees.  If you’ve followed the class action cases brought by David Lowery and Melissa Ferrick against Spotify, you’ll know that these cases only involve small songwriters.  Now there’s two publishers suing in Nashville–again, small publishers.

If these plaintiffs didn’t have the statutory damages and attorneys’ fees, do you think anyone in the government would care that the government’s compulsory license was being misused?

We’re From Washington and We’re Here to Help

Individual music users like Amazon, Google, Facebook and Spotify have about as much political clout as any notorious monopolists in history from Standard Oil to United Fruit.  As an organized lobbying group, these companies have the political clout of Big Tobacco, Big Pharma or Big Bombs.

These companies are all part of the MIC Coalition (or are members of other lobbying groups that are).  The MIC Coalition is all about this new “government list” that’s supposed to protect small business by crushing small business.

Here’s the pitch on the government database from the MIC Coalition:

The lack of an authoritative public database creates problems for venues and small businesses including restaurants, taverns, wineries, and hotels. For example, venues are declining to host live musicians rather than risk potential liability due to lack of up-to-date and actionable licensing information. The lack of a database is also a challenge for local broadcasters and digital music streaming services that rely on accurate copyright information to provide music to millions of consumers.

The assumption behind this legislation is that if the government just forced songwriters and artists to register in the government’s list, that music users would actually use that database.  If there’s one common theme in the recent lawsuits against digital services it is that the services don’t seem to use the available data–except to file millions of mass statutory licenses using a loophole in the Copyright Act claiming the users can’t find the copyright owner of the songs they use in the current Copyright Office records and seeking the government’s cover from lawsuits as if they were legitimate users.

If they put the same effort into finding the songwriters that they do into filing millions of mass NOIs, these services might not have so many problems.  And instead of removing the loophole, the government now floats this “government list” database idea to create an even more complicated loophole at taxpayer expense.

Reject the 11th Century Solution to a 21st Century Problem

It’s important to realize two key causes for the licensing mess the government has created through over-regulating songwriters, one of which is not entirely the government’s fault.

The Government Should Allow Statutory Licensing by ASCAP and BMI:  Because the government imposes a near-compulsory license through consent decrees against songwriters who are members of the two largest performing rights societies (ASCAP and BMI), a perfect opportunity to streamline the compulsory license is simply lost.  ASCAP and BMI are prohibited from engaging in compulsory licensing.  If these PROs were allowed to issue licenses for all the rights digital services need, that would be a meaningful step forward.

This would make ASCAP and BMI similar to SESAC which can issue both performance rights licenses and mechanical licenses after SESAC’s acquisition of the Harry Fox Agency.  SESAC is not subject to a consent decree.  The MIC Coalition didn’t like that either and complained to the Department of Justice seeking an investigation into stopping an idea that could work.

Require Music Users to Search the PRO Databases for Song Ownership before Serving Address Unknown Mass NOIs at Taxpayer Expense:  There is nothing in the “government list” bill that actually requires music users to search or document that they have searched this new database.  Current law requires a search of at least the Copyright Office records (which Amazon, Google, Pandora, Spotify, Microsoft, iHeart and others are supposedly doing already by the millions) and in some circumstances permits a search of the performing rights society databases as well (see 37 CFR Sec. 201.10 h/t Richard Perna).

It is a short leap to require music users to search the publicly available databases of ASCAP and BMI as well as the public records of the Copyright Office before serving millions of address unknown NOIs on the Copyright Office.  This will be particularly relevant given the recently announced voluntary cooperative effort between ASCAP and BMI to combine their repertory databases (which could include other PROs).  While there is some complaining from MIC Coalition members that ASCAP and BMI won’t indemnify users of their databases for the accuracy of the data.

That simply isn’t true for parties to the ASCAP and BMI licenses, which after all is why the databases are created in the first place.  Since ASCAP and BMI have no idea what use anyone may make of the data and if that use is even authorized by the song or recording owners, how could they possibly be expected to indemnify all users for any use in any country of any song?  Those databases are not a search engine.  Nobody else does that, especially not search engines, e.g., Google’s disclaimer:

Our Warranties and Disclaimers

We provide our Services using a commercially reasonable level of skill and care and we hope that you will enjoy using them. But there are certain things that we don’t promise about our Services.

OTHER THAN AS EXPRESSLY SET OUT IN THESE TERMS OR ADDITIONAL TERMS, NEITHER GOOGLE NOR ITS SUPPLIERS OR DISTRIBUTORS MAKE ANY SPECIFIC PROMISES ABOUT THE SERVICES. FOR EXAMPLE, WE DON’T MAKE ANY COMMITMENTS ABOUT THE CONTENT WITHIN THE SERVICES, THE SPECIFIC FUNCTIONS OF THE SERVICES, OR THEIR RELIABILITY, AVAILABILITY, OR ABILITY TO MEET YOUR NEEDS. WE PROVIDE THE SERVICES “AS IS”.

SOME JURISDICTIONS PROVIDE FOR CERTAIN WARRANTIES, LIKE THE IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. TO THE EXTENT PERMITTED BY LAW, WE EXCLUDE ALL WARRANTIES.

If the government wants to tinker with the Rube Goldberg system of music licensing that it has imposed on songwriters, it could start by making these two changes before imposing a 21st Century version of William the Conqueror’s Domesday Book, the Great Survey of England conducted in 1088.

Oh, and if they’re so fired up about forcing people to do things through regulation, why not force music users to license, pay and account in compliance with the law.

 

@musictechpolicy: Hey Alexa, Where’s My Money? Address Unknown Update Courtesy of Paperchain

We get an update this week on the total “address unknown” mass NOIs filed with the Copyright Office for the royalty-free windfall loophole.  This time we have to thank our our friends at Paperchain in Sydney for doing the work of decompressing the massive numbers of unsearchable compressed files posted on the Copyright Office website.  As you can see, there’s been an increase of approximately 70% since January 2017.   (For background, see my article.)

As you can see, Amazon is still far and away the leader in this latest loophole designed to stiff songwriters, followed closely by Google.  However, Spotify is moving on up.  Spotify does get extra points for starting late in March 2017, but they are catching up fast filing over 5,000,000 as of last month.

Read the post on MusicTechPolicy

Repost: The MTP Podcast: The Consequences of DOJ’s New Rule on 100% Licensing with David Lowery, Steve Winogradsky and Chris Castle

The Department of Justice–once again doing its best to crush small business–has appealed the BMI ruling (copy of DOJ appeal here).  Yes…she’s baaack….Remember DOJ Antitrust lawyer and ex-Googler Renata Hesse?  (aka “Defendant“)

hesserenata

Hesse

Hesse’s reward for sticking the shiv into songwriters was a partnership with big bucks at the DC Office of Sullivan & Cromwell, aka the gold plated revolving door waiting room where she proudly lists her expertise in “Intellectual Property”.  She left out “Destroying Lives of People Who Can’t Fight Back”.

House-Bolton-heraldry

And then of course there’s shiv meister David C. Kully, his bad self, now a partner at Holland & Knight who did Hesse’s dirty work and really did the day to day on fufilling Hesse’s inexplicable obsession with screwing songwriters to the wall.  Kully encouraged songwriters to leave ASCAP if they didn’t like the DOJ’s ruling on 100% licensing.

Kully_David_72
Why is this man smiling?

Originally posted on MUSIC • TECHNOLOGY • POLICY: David Lowery, Steve Winogradsky and Chris Castle discuss the implications of the new rule by the U.S. Department of Justice re-interpreting the ASCAP and BMI consent decrees to require 100% licensing and prohibiting partial withdrawal. David Lowery is the founder of Cracker and Camper van Beethoven, leading artist rights…

via The MTP Podcast: The Consequences of DOJ’s New Rule on 100% Licensing with David Lowery, Steve Winogradsky and Chris Castle — MUSIC • TECHNOLOGY • POLICY

 

@Aditya Bhat: Is Google about to launch the largest torrent search engine ever seen?

[Editor Charlie sez:  In their hearts, they know they are criminals…Let the RICO games begin!]

After years of catering to copyright holders and their increasing demands, is Google about to go rogue in sheer frustration? According to a report by TorrentFreak, 2017 could well be the year Google throws its toys out of the pram, raises the Jolly Roger and takes to the digital seas in anger by launching its very own mega torrent search engine.

Over the last decade the copyright industry has been baying for pirate blood and have badgered Google for far broader search engine censorship to curb the growing piracy problem. In 2012 alone, Google removed over 50 million pirate search results that were infringing on the copyright holders’ content.

Read the post on International Business Times.

@bmi: BMI Files Action in Federal Rate Court Against the Radio Music License Committee

[Editor Charlie sez: Here’s a press release from BMI about BMI’s rate court case against the Google-backed anti-artist behemoth MIC Coalition’s member Radio Music License Committee, the broadcaster licensing collective.  The RMLC collective is also suing Global Music Rights to stop songwriters from forming a licensing collective.]

mic-coalition-rmlc

Today, BMI filed an action in Federal Rate Court to set interim fees for radio stations represented by the Radio Music License Committee (the “RMLC”) while BMI and the RMLC negotiate the terms of a new five-year deal beginning in 2017.

The RMLC has proposed an interim rate well below BMI’s previous deal, the effect of which would have a significant impact on the royalties BMI pays to its songwriters, composers and music publishers. The RMLC has justified its proposed rate based upon incomplete and incorrect information regarding BMI’s radio performances. BMI disagrees fundamentally with the RMLC’s proposal and, consistent with past practices, is asking the Court to maintain its most recent rate while new terms are negotiated.

Mike Steinberg, Senior Vice President of Licensing for BMI, stated, “We attempted to negotiate in good faith with the RMLC for many months, and just before the end of the year, the RMLC presented an interim rate that significantly undervalues the work of BMI’s songwriters. Given the unmatched caliber of BMI’s repertoire, our superior market share on radio, and the ever-increasing value that BMI music brings to the radio industry across all its platforms, we believe the RMLC’s proposal falls well short of what is in the best interests of our affiliates.”