@scleland: The Huge Hidden Public Costs (>$1.5T) of U.S. Internet Industrial Policy

[Editor Charlie sez:  Scott Cleland takes an excellent deep dive into the “leechonomics” of the safe harbors afforded to the special people who are members of the Internet Association and the Digital Media Association.  This corporate welfare was most recently replicated in the punitive Music Modernization Act retroactive safe harbor bolstering profits from copyright infringement for the special people which passed the House Judiciary Committee on the same day that the Congress cut back the CDA 230 safe harbor for the same special companies and cut their profits from sex trafficking.]

This post introduces a new white paper here with a first-of-its-kind, cost-estimation model of the cumulative hidden public costs of U.S. Internet industrial policy* entitled: “Internet Platform Corporate Welfare and Leechonomics.” *U.S. Internet-first, industrial policy in the 1996 Telecom Act, effectively exempted only Internet companies from: all U.S. communications law, regulation, and public responsibilities; normal non-communications Federal/State regulation; and normal civil liability for what happens via their platforms and business models.

Nutshell Summary: Sweeping Government exemptions and immunities from risks and costs overwhelmingly favor zero-sum, parasitic policy arbitrage and corporate welfare, which perversely fosters unproductive “leechonomics.” U.S. Internet policy most incents platform business that maximizes arbitrage spreads, i.e. taking maximal societal risk that un-immunized competitors can’t take, where the benefits can be capitalized by platforms, and the costs socialized to the public (>$1.5T), because the government has only exempted and immunized platforms from normal accountability and responsibility for consumer welfare.

Read the post on The Precursor Blog

@ArtistRightsNow: Action Alert on Music Modernization Act

You Can’t Find What You Don’t Look For: Spotify, Google, Pandora Can’t Find Aerosmith’s Steven Tyler and Joe Perry–but what about Martha Stewart — Music Technology Policy

In another odd twist in the 60,000,000-plus “mass NOI” debacle, a five second search of the SX Works NOI Lookup database reveals that Spotify, Google, Pandora and other services can’t seem to locate Aerosmith songwriters like Steven Tyler and Joe Perry, not to mention their co-writers like long-time Bryan Adams collaborator Jim Vallence. This time there are easy to find documents in the Copyright Office records identifying Aerosmith copyright owners that should have found if anyone bothered to look for them at the services, all of which certified to the Copyright Office that they had done the research.  Which raises the question of whether the services have all violated the federal statute that prohibits making false statements when filing documents, certainly any that invoke the awesome power of the Sovereign to force songwriters to give up property rights.

via You Can’t Find What You Don’t Look For: Spotify, Google, Pandora Can’t Find Aerosmith’s Steven Tyler and Joe Perry–but what about Martha Stewart — Music Technology Policy

MMA Opponent Richard Busch Triumphs Again for Gaye Family in Blurred Lines Appeal

March 21 (Reuters) – A federal appeals court on Wednesday upheld a $5.3 million judgment against Robin Thicke and Pharrell Williams for copying a Marvin Gaye song to create their 2013 smash “Blurred Lines.”

By a 2-1 vote, the 9th U.S. Circuit Court of Appeals said Gaye’s 1977 song “Got to Give It Up” deserved “broad” copyright protection, and the March 2015 jury verdict in favor of Gaye’s three children could stand because there was “not an absolute absence of evidence” of similarity between the two songs.

Circuit Judge Milan Smith also upheld an award of 50 percent of future royalties from “Blurred Lines” to the Gayes. He restored the jury finding that the Interscope record label, part of Vivendi SA, and Clifford Harris, the rapper known as T.I. who added a verse to “Blurred Lines,” should not be liable.

Jurors had awarded the Gayes $7.4 million, but U.S. District Judge John Kronstadt reduced the sum to $5.3 million, while adding royalties. Kronstadt also said T.I. and Interscope should be liable, but the appeals court disagreed….

Howard King, a lawyer for Thicke and Williams, said the dissent “enhances the prospects” his clients may prevail in an appeal. “These are two entirely different songs,” he said.

“We are thrilled,” Richard Busch, the Gayes’ lawyer, said in an interview. “The decision protects songwriters, and encourages new songwriters to create original works themselves.”

Which is more than you can say for the Music Modernization Act that Mr. Busch excoriated as unconstitutional in a recent opinion post:

While the proposed MMA Bill, which now has a Senate version, is not the worst thing I have ever read, there are certain parts of it that are not good at all.

It basically insulates Spotify and other DSP’s from liability for statutory damages and attorneys’ fees for any lawsuit not filed as of Jan. 1, 2018.

With essentially no notice, songwriters and publishers whose songs had been allegedly infringed by Spotify for years would essentially lose a key weapon in any lawsuit filed if they had not filed as of Jan. 1, 2018, even though the bill had not been enacted and will not be enacted, if it ever is, until sometime later in 2018.

Must Read by @MarcHogen: Congress Is Making Headway on a Bill to Modernize How [Songwriters] Are Paid

[Editor Charlie sez:  Marc Hogen, Senior Staff Writer at Pitchfork, takes a detailed and objective look at the Music Modernization Act and makes some critical recommendations for amendments to the MMA.  This is a must-read for all songwriters wanting to better understand the nuances of the legislation.]

In December, Collins introduced the Music Modernization Act(MMA), a 109-page piece of legislation he claims “would literally usher copyright laws into the 21st century.” A Senate version followed a month later. Born from a year of behind-the-scenes negotiations, the proposed law has bipartisan support and—unusual for music-related efforts in Congress—endorsements by lobbying groups representing a broad swath of the industry, from record labels and publishers to streaming services and FM broadcasters. (Some of the bill’s advocates haveargued that it should pass because this time, for once, it could pass.) Provisions of Collins’ bill are expected to be included as part of a package that the Grammys’ policy chief has expressed “very high confidence” will make it onto President Donald Trump’s desk sometime this year….

Though lawmakers are describing the MMA as a “consensus bill,” most of that consensus appears to have been between lobbyists at the negotiating table. While publishing and record-label trade groups advocating for the MMA claim they have cosigns from more than 26,000 songwriters, some in the industry question how much these survey respondents were really told about the nitty gritty. This bill simply shouldn’t be crammed through before the rest of the music community understands what it is and offers ways to improve it. And it’s not just that working-class musicians haven’t been invited to the table—it’s also that the biggest artist advocates they could find are folks like Dionne Warwick and Steven Tyler, neither exactly representative of where songwriting is headed and where royalties should follow….

This alphabet soup of administration would be a lot simpler than the current system, but the details matter. As proposed, the streaming services would fund the MLC, and a board of publishers and songwriters would oversee it. At last (unofficial) count, the board would consist of 10 publishers and only four songwriters. In an open letter, songwriter and big-band leader Maria Schneider has called for an equal, 50-50 split between publishers and songwriters, along with assurance that songwriters would be able to choose their own board representatives. She has a point, and Congress should make the change.

Read the post on Pitchfork.

 

SXSW Panel on Music Modernization Act’s Reachback Safe Harbor — Music Technology Policy

I was fortunate to moderate an excellent panel at the SXSW Continuing Legal Education seminar this week.  Our topic was “The Future of Mechanical Licensing in the U.S.”  Little did we know when the panel was booked in September that this would be such a hot topic following the introduction of the deeply controversial Music Modernization Act on December 21.

One of the legal process questions the panel discussed was the MMA’s “reachback” safe harbor that retroactively limits infringement claims filed after January 1, 2018 without regard to when the MMA’s blanket license is actually available.

via SXSW Panel on Music Modernization Act’s Reachback Safe Harbor — Music Technology Policy

@musicanswersnow Letter to @housejudiciary on Music Modernization Act Shortcomings

March 14, 2018

Hon. Robert Goodlatte
Hon. Jerrold Nadler
House Judiciary Committe
House of Representatives
Washington, D.C.

Dear Chairman Goodlatte and Ranking Member Nadler,

We write to you as founders and directors of MusicAnswers, a non-profit grassroots organization now supported by more than 3,400 independent music creators across America, to express our profound concerns about the Music Modernization Act (“MMA”). We believe the current draft of the MMA completely fails in one of its primary goals: to ensure that all music creators, many of whom are independent and self-published or unpublished, are paid fairly for the use of their music by digital music services.

Instead, the MMA is being used by major music corporations to strengthen their grip over an industry undergoing an unprecedented period of fragmentation, disruption, and growth.  For the Music Modernization Act to live up to its name, it must truly embrace a modern approach to streaming royalties.

A key problem the MMA purports to solve is the disposition of royalties for tens of millions of unidentified works performed by digital music services. These royalties are generally not the property of established music publishers or their writers, entities with the resources and administrative expertise to ensure they are paid for their performances. They are, instead, primarily the property of tens of thousands of writers from around the world who have chosen to bypass the established music publishing paradigms and explore new ways to get their music to market.

So it is astonishing that the “Collective,” the entity designated by the MMA to take control over the entire process of licensing these works and administering the payment of royalties, will be dominated and controlled by major music publishers — the very businesses eschewed by many of the writers concerned. This would create a significant conflict of interest that would compromise the integrity of the MMA.

We draw your attention to the following:

  1. The Collective established by the MMA will be controlled by the major music publishers, with a Board of Directors made up of ten publishers and four writers. There is absolutely no justification for this inequity. The Board overseeing the MMA should have equal numbers of writers and publishers, including some guaranteed representation for self-published or unpublished writers and small, independent publishers. Moreover, members of that Board should be selected by their peers, not by the major publishers or their trade associations (as has been suggested by the CEO of the publishers’ trade association.)

  2. The MMA will create the world’s largest “black box” of unclaimed royalties, amounting to tens of millions of dollars. The process enshrined in the bill for the distribution of this money funnels it directly into the pockets of major publishers, while simultaneously creating a strong disincentive for the Collective to identify the proper owners, as this would only diminish their share of the black box. The distribution of any unclaimed money from digital music services must be accomplished in a way that ensures that the writers entitled to this money, and only those writers, share in this pool of money.

  3. The MMA offers indemnity to digital music services on behalf of hundreds of thousands of music creators, including independent writers who have not exercised their rights under the copyright law to seek damages for prior performances and who were not consulted and did not agree to this provision. It is unconscionable that the indemnity is, in effect, being proffered by entities that have already settled their past claims. Distribution of the unclaimed funds only to writers and publishers with legitimate claims could help to alleviate this concern. In addition, a portion of unclaimed funds could be used to mount a campaign to educate independent writers about the process and benefits of filing their claims.

Absent these kinds of modifications, none of which would imperil the fragile multilateral agreement between the digital music services, performing rights organizations, songwriter groups, and music publishers, this legislation will not benefit the songwriters whose rights and royalties you seek to protect. In fact, the MMA as currently drafted establishes a framework likely to deprive legitimate songwriters of their rights and royalties for the next several decades.

We note that proponents of the bill claim to have the support of the tens of thousands of music creators. We strongly believe that few, if any, of those writers understood the details of the bill or its implications when they were asked for support. (Indeed, the bill had not even been made public when its proponents began promoting online petitions in support, nor was its text included or a link to it provided.) And with all due respect to the songwriter organizations that were involved in the negotiations of this bill, their members do not represent the worldwide community of independent music creators for whom the MMA is supposed to be a solution.

On behalf of those independent music creators, many of whom we count as friends and colleagues, we ask you to be cognizant of the forces that are at work behind the scenes and the reasons for their actions, and to carefully consider the long-term consequences of these legislative efforts.

Sincerely,

Phil Galdston David Wolfert

cc: Member of the Committee on the Judiciary, U.S. House of Representatives
cc: Hon. Senators Alexander, Coons, Feinstein, Hatch, Leahy, and Schumer