Tag: Music Modernization Act

The US Copyright Office solicited comments from the public about the operations of the Mechanical Licensing Collective.  Those first round of those comments (called “initial comments”) were due in November and the second round of those comments (which are called “reply comments” because they essentially comment on the initial comments) were due December 20.

The Songwriters Guild of America filed initial comments and also filed reply comments.  We’re going to post SGA’s reply comments in three parts and then we’ll post other commenters who we think made really good points (like CISAC and BIEM among others).  Note that SGA’s comment includes a post by Chris Castle, but we are going to link to that post rather than reproduce it as you may have already read it.

All the comments focus on some central themes that seem to be on everyone’s mind which can be boiled down to oversight, oversight and more oversight.  While the DLC controls the MLC’s purse strings, the MLC has been given largely uncontrolled power over songwriters that needs to be checked by the government on behalf of the governed.  SGA’s comment can be boiled down to its motto:  Protect Songwriters.

Reply Comments of the Songwriters Guild of America, Inc.
Re: Notice of Inquiry Issued by the United States Copyright Office Concerning the Orrin
G. Hatch-Bob Goodlatte Music Modernization Act of 2018 Titled “Blanket License
Implementation Regulations”

I. Introduction and Statement of Interest

These Reply Comments are respectfully submitted by the Songwriters Guild of America, Inc. (“SGA”), the longest established and largest music creator advocacy and copyright
administrative organization in the United States run solely by and for songwriters, composers, and their heirs. Its positions are reasoned and formulated solely in the interests of music creators, without financial influence or other undue interference from parties whose interests vary from or are in conflict with those of songwriters, composers, and other authors of creative works.

Established in 1931, SGA has for 88 years successfully operated with a two-word
mission statement: “Protect Songwriters,” and continues to do so throughout the United States and the world.

SGA’s organizational membership stands at approximately 4500 members, and through its affiliations with both Music Creators North America, Inc. (MCNA) (of which it is a founding member) and the International Council of Music Creators (CIAM) (of which MCNA is a key Continental Alliance Member), SGA is part of a global coalition of music creators and heirs numbering in the millions. Of particular relevance to these comments, SGA is also a founding member of the international organization Fair Trade Music, which is the leading US and international advocacy group for the principles of transparency, equitable treatment, and financial sustainability for all songwriters and composers.

These Reply Comments are meant to supplement the initial comments (“Initial Comments”) filed by SGA in its submission dated November 8, 2019 (see Attachment A), the full content of which is hereby repeated and reconfirmed.

The two most important points stressed by SGA in those Initial Comments were as follows:

1. The obvious and overwhelming necessity for inclusion of music creator information in
the Mechanical Licensing Collective’s (“MLC”) musical works database; and,

2. The equally imperative necessity for robust US Copyright Office oversight of the MLC’s
carrying out of its statutory duties, commitments and activities, especially regarding the
identification of unmatched works and royalties.

It was originally anticipated that SGA’s Reply Comments would focus chiefly on the recommendations submitted by other individuals and organizations as part of the initial round of inquiry. Intervening events concerning the activities of the Mechanical Licensing Collective (MLC) since SGA’s initial submission, however, have caused SGA to recalibrate its focus. Due to the importance of conveying to the US Copyright Office (“USCO”) and the Librarian of Congress some of the very concerning information that has come to light over the past several weeks, SGA believes its Reply Comments must now of necessity deal principally and forthrightly with those issues rather than with the critiquing of submissions filed by its colleagues.

II. Additional, Recent Developments Illustrating the Necessity for Close Scrutiny and Oversight of the MLC by the USCO and the Library of Congress

A. The Resignation of Recording Artist/Songwriter/Music Creator Activist David Lowery from the MLC, and the Process of Replacing Music Creator Members on the MLC Board and Committees Prior to its designation by the USCO and the Librarian of Congress as the organization that would serve as the MLC, the entity established principally by the major music publishing conglomerates and known as the NMPA/MLC conducted an extensive campaign aimed at gaining industry support for its MLC candidacy.

As part of that campaign, it and its affiliated music creator and publisher organizations frequently raised the participation of recording artist/songwriter/music creator activist David Lowery on the Unclaimed Royalties Oversight Committee (“URO Committee”) as potentially the most compelling proof of the entity’s commitment to ensuring that the voice of the independent music creator would always be heard.

Throughout his career, Mr. Lowery has been an outspoken advocate for the rights and interests of musical artists and creators. His mere presence within the NMPA/MLC’s proposed Committee structure legitimized for many the group’s candidacy among independent songwriter and composer groups. Those organizations might otherwise have objected more strenuously to an entity controlled in large part by the multi-national music publishing conglomerates being designated to serve as the MLC.

On July 5, 2019, the NMPA/MLC was indeed selected as the official MLC, and Mr. Lowery was simultaneously approved to serve on its URO Committee. Within a few short weeks after that announcement, however, Mr. Lowery resigned from the URO Committee and disassociated himself from the MLC with the statement that he “lacked the bandwidth” to carry out the watchdog role he had hoped to fill. Shortly thereafter, Mr. Lowery began to publish commentaries highly critical of certain decisions and activities being carried out by the MLC (and highly revealing of his apparent reasons for resigning), the gravity of which issues will be discussed further, below.

Mr. Lowery’s sudden and unexpected departure from the MLC and the URO Committee,
however, has raised even more immediate concerns within the independent music creator community, not only as to the reasons why he might have resigned, but also over the process by which he will be replaced. It is the position of SGA that a system which would allow the MLC board of directors (consisting of ten music publisher representatives and just four music creators) to select and/or approve replacement directors and committee members on behalf of the creative community, without meaningful input from creators or approval by the Librarian of Congress and the Register of Copyrights, is an absurdity. Such an unbalanced, unchecked process would virtually guarantee the removal of what little influence actual music creators have over future MLC activities and decision-making—a result wholly inconsistent with Congressional and Executive intent (especially as regards the crucial work of the URO Committee).

As SGA pointed out in its comments to the US Copyright Office dated April 22, 2019 concerning the original designation of the MLC (see Attachment B):
With the knowledge that ‘permanently’ unmatched royalties will eventually be
distributed on a market share basis to them, [the] largest music publishers will almost certainly do all they can to influence, hamstring and obscure the search process…. It will take highly experienced, non-conflicted and strongly independent-minded board members of the Mechanical [Licensing] Collective to resist this pressure, and to act in ways that fulfill their duties up to the mandated standards of fairness, transparency and accountability set forth in the Act.

The necessity for those characteristics in board members is amplified by the fact that the Mechanical Collective board may even override the recommendations of its own, statutorily established Unclaimed Royalties Oversight Committee if it sees fit to do so. It thus falls to the Register of Copyrights to serve as investigator, analyst and arbiter concerning this crucial, threshold issue of appropriate board and committee member selection as part of its evaluation of the competing candidates for designation as Mechanical Collective.

In honing in on its concerns regarding that specialized duty of the Register, members of Congress took the opportunity in both the Senate and House Reports to elaborate on their expectations regarding the qualifications of board and committee members proposed for service by any Mechanical Collective candidate, and the obligation of the Copyright Office under the direction of the Register to use its own, appropriate judgement in independently evaluating and verifying the credentials of those directors and committee members proposed. That Congressional posture was undoubtedly taken to ensure that all board and committee members of the Mechanical Collective possess the proper background and abilities to execute their duties to protect the rights of creators and other interested parties without conflict, pursuant to the terms of the Act.

Specifically, the applicable section of the Senate Report reads:

The Board of Directors of the new collective is required to be composed of individuals matching specific criteria. The detailed requirements concerning the overall framework of the Board of Directors of the collective and its three committees, the criteria used to select individuals to serve on them, and the advance publication of their names and affiliations all highlight the importance of selecting the appropriate individuals. Service on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated. With the advance notification requirement, the Register is expected to allow the public to submit comments on whether the individuals and their affiliations meet the criteria specified in the legislation; make some effort of its own as it deems appropriate to verify that the individuals and their affiliations actually meet the criteria specified in the legislation; and allow the public to submit comments on whether they support such individuals being appointed for these positions. It has been agreed to by all parties that songwriters should be responsible for identifying and choosing representatives that faithfully reflect the entire songwriting community on the Board.” (emphasis added) S. Rept. 115-339 at 4-5.

The otherwise identical section of the House Report concludes on the following note:

During the entire discussion of the legislation, it has been agreed to by all parties that songwriters should be responsible for identifying and choosing the songwriter representatives on the Board. The Committee strongly agrees with such an approach. (emphasis added) H. Rept 115-651 at 5.

Further, it seems of particular importance that the Executive Branch also regards the careful, post-designation oversight of the Mechanical Collective board and committee members by the Librarian of Congress and the Register as a crucial prerequisite to ensuring that conflicts of interest and bias among such members not poison the ability of the Collective to fulfill its statutory obligations for fairness, transparency and accountability. The Presidential Signing Statement, in fact, asserts unequivocally that ‘I expect that the Register of Copyrights will work with the collective, once it has been designated, to ensure that the Librarian retains the ultimate authority, as required by the Constitution, to appoint and remove all directors.’(emphasis added)

Pursuant to such clear guidance from both Congress and the White House concerning the selection and replacement of music creator board and committee members, SGA urges the adoption by the USCO of regulations mandating inclusion in the MLC by-laws of a process that includes meaningful music creator participation in the selection process without music publisher interference, with further review and approval by the USCO and the Librarian of Congress of all music creator candidates for MLC board and committee service. To do otherwise would be akin to empowering the wolves to select the watchdogs that purportedly guard the sheep. And that is a result that is not only emphatically in conflict with Congressional intent, but one that is also guaranteed to produce exactly the opposite, long-term results Congress and the Executive Branchwere seeking by passage of the Music Modernization Act (“MMA”): remunerative fairness and justice for creators consistent with the principles set down in Article I, Section 8 of the US Constitution.

To be continued in Part 2.

via @SGAWrites Suggestions to @CopyrightOffice on MLC Operations Part 1 — The Trichordist

MIC Coalition Filing Reveal: The Zombie Transparency in Music Licensing and Ownership Act

ARW readers will remember the horrific Transparency in Music Licensing and Ownership Act from the last Congress.  (See “The Transparency in Music Licensing and Ownership Act: The Domesday Book Meets A Unicorn“.)  Well, guess what–it’s not really dead!

MIC Coaltion Members 2019
MIC Coalition Members

The MIC Coalition cartel filed a comment with the Copyright Office that makes one thing clear–this rule making is going to be a scorched earth donnybrook of epic proportions.  The big reveal in the MIC Coaltion’s filing is based on this passage in the legislative history for the Music Modernization Act:

Testimony provided by Jim Griffin at the June 10, 2014 Committee hearing highlighted the need for more robust metadata to accompany the payment and distribution of music royalties. With millions of songs now available to subscribers worldwide, technology also has a role to play through digital fingerprinting of a sound recording. However, there is no reliable, public database to link sound recordings with their underlying musical works. Unmatched works routinely occur as a result of different spellings of artist names and song titles….Music metadata has more often been seen as a competitive advantage for the party that controls the database, rather than as a resource for building an industry on.

The entire concept of maintaining a static look up database of not only all songs in the history of recorded music, but also all sound recordings in the history of recorded music that can be queried in real time is really not that different than the Domesday Book–when William the Conquerer made a big list of all property, people and chickens in England in the “Great Survey” in 1086.  Like the Domesday Book, the “musical works database” will be full of mistakes due to the dynamic nature of the things it is purporting to count.

But the reveal is the heaping praise on the horrific Transparency in Music Licensing and Ownership Act which was designed to destroy the PRO system (just like the MIC Coalition):

In response to the Copyright Office recommendations, Representative Jim Sensenbrenner introduced the Transparency in Music Licensing and Ownership Act, H.R. 3350, in July of 2017, which was cosponsored by several members of the House Judiciary Committee. The bill would provide for a database, housed at and overseen by the U.S. Copyright Office, to aid businesses and establishments that publicly perform musical works and sound recordings in identifying and compensating the holders of rights in those works. 

Fasten your seatbelts, it’s going to be a bumpy night.

@CopyrightOffice: Next Steps in the Music Modernization Act

[Editor Charlie sez:  Where is the olive branch from MLCI to AMLC?]

Under the Music Modernization Act (MMA), we now have a new system for licensing musical works that should help ensure the songwriters behind our favorite tunes can be properly identified and paid. And as part of the implementation of this historic law, just last week, the Copyright Office designated the Mechanical Licensing Collective, Inc. (MLCI) as the approved entity to implement key aspects of this new system, and the Digital Licensing Collective, Inc. (DLCI) to represent the interests of digital music services. Pursuant to the MMA, the MLCI will receive notices and reports from digital music providers, collect and distribute royalties, identify musical works and their owners for payment, and develop and maintain a publicly available database of musical works.

In designating the MLCI, the Office highlighted the support for the entity among musical work copyright owners and the organization’s projected ability to carry out the administrative and technological functions necessary to implement the law. The Office also highlighted the MLCI’s commitment to diversity in carrying out its duties. As part of its submission to the Office, the MLCI offered a detailed operational framework, reflecting substantial planning with respect to organizational structure, vendor selection, and collection and distribution procedures of royalties. At the same time, the Office appreciated the important submission of the other entity seeking to be designated, the American Music Licensing Collective (AMLC), and recommended that the MLCI consider whether aspects of the AMLC’s proposal should be incorporated into the MLCI’s future planning. Now that the designation process has been completed, the expectation is that the MLCI will fairly and equally represent the interests of all parties, including those who did not previously endorse it, and that key players such as the DLCI and the MLCI will build upon the cooperative spirit facilitated by the MMA’s passage to work together to make the implementation of this historic new licensing scheme a success.

Following designation, the Copyright Office will now turn toward ensuring that the proper regulatory procedures are in place prior to the upcoming license availability date of January 2021, when the new system will be fully operational. Over the next several months, we will begin rulemakings relevant to the MMA, as well as substantial public outreach, including a tutorial explaining the basics of the new law, a webinar, updated educational circulars, and presentations at music industry conferences. We encourage interested parties to check back on our website regularly for updates.

Read the post on the Copyright Office blog.

Press Release: Songwriters Guild of America Lauds US Copyright Office’s Announcement of Strict Oversight Approach to the MMA Music Licensing Collective

Songwriters Guild of America Lauds US Copyright Office’s Announcement of Strict Oversight Approach to the MMA Music Licensing Collective

Independent Music Creator Organizations Look Forward to Working with Copyright Office in Protecting Songwriter and Composer Rights

July 8, 2019, New York City–The Songwriters Guild of America, Inc. (SGA), the nation’s largest and longest established advocacy organization run solely by and for music creators, has announced its support for the strict oversight approach adopted by the US Copyright Office this week in naming the consortium led by the major, multi-national music publishers as the official Music Licensing Collective (MLC) under the Music Modernization Act.  The Copyright Office made clear, as requested by SGA in recently filed comments, that it intends to take an active role in reviewing the activities of the MLC in light of the potential conflicts of interest inherent within a board of directors that will include major music publisher representatives.

Under the Act, the MLC is charged with identifying the rightful owners of hundreds of millions of dollars in unmatched streaming royalties.  Those royalties that cannot be tied to particular owners, according to the law, will eventually be distributed to music publishers on a market share basis.

“Obviously,” according to songwriter and SGA president Rick Carnes,  “under such circumstances you need an independent, outside overseer to make sure that those potentially conflicted board members who would benefit from the MLC doing a lax job in identifying the proper copyright owners do not utilize their positions to pursue unjust enrichment of their companies, despite the best efforts of songwriters, composers and truly independent music publishers on the board to achieve equitable results.”

In specifically citing SGA’s comments that meaningful oversight is an imperative under the law, US Register of Copyrights Karyn Temple concluded that “[t]he Copyright Office has been provided with ‘broad regulatory authority’ to conduct proceedings as necessary to effectuate the statute with the Librarian’s approval.  In addition to the regulations that the Office is specifically directed to promulgate, the legislative history contemplates that the Office will ‘thoroughly review’ policies and procedures established by the MLC….The Office intends to conduct its oversight role in a fair and impartial manner; songwriters are encouraged to participate in these future rulemakings.”

SGA had noted in its comments that it was “far more concerned with ensuring that music creator rights are fully protected against conflicts of interest and impingements upon the rights and interests of songwriters and composers under all circumstances, than in supporting one or the other candidate vying to be selected as the Mechanical Collective.”  The organization is satisfied with the Registers’ recognition of the Copyright Office’s oversight opportunities and obligations, and very much looks forward to working side by side with the Office on various issues concerning MLC policies and actions.

Carnes closed by stating, “for over 85 years, SGA has operated with a two-word mandate: ‘Protect Songwriters.’  And that applies to the rights of both American and foreign music creators.  Congress intended, and the president’s signing statement confirmed, that the Copyright Office is to play a key role in pursuit of that same protective mandate. The Copyright Office’s stated willingness and obvious ability to accept that challenge is very encouraging, and SGA –with the welcome participation of many of its fellow songwriter organizations in the Music Creators North America (MCNA) alliance and MCNA’s affiliated, global music creator advocacy groups– intends to do all within its power to assist it in doing so.”

Carnes also noted that in the event that it proves necessary to take further appropriate action, for example, to make certain that proper diligence is exercised by the MLC in attempting to identify copyright owners of unmatched royalties prior to distributing “permanently” unmatched royalties, or to ensure that contractual royalty splits with songwriters and composers are honored by publishers after receipt of unmatched royalties, “SGA is ready, willing and able to do that.”

SGA is also studying the issue of whether the statutes’ placement of limitations on damages for those plaintiffs who bring copyright infringement lawsuits after January 1, 2018 against digital music distributors is actually violative of the Fifth Amendment’s “takings clause,” rendering that section of the Music Modernization Act unconstitutional and unenforceable.

“SGA and the entire, independent music creator community have our work cut out for us,” he said. “But we are fully prepared to do whatever is prudent to protect the rights and interests of songwriters and composers and look forward to working closely with the US Copyright Office and the entire music creator community in doing so.”

The member organizations of Music Creators North America, of which SGA is a founding member, have endorsed this statement.

Songwriters Guild of America, Inc.
210 Jamestown Park Road
Brentwood, Tennessee 37027

The Countdown to Modernity: Copyright Royalty Board Posts Notices and Rules for MLC Assessment Proceeding

Since there was no advance commitment or agreement on the budget for the Mechanical Licensing Collective (MLC) under Title I  of the Music Modernization Act, it appears that the clock is ticking on an agreement before the parties have to go before the Copyright Royalty Judges to be told what the budget (or the “assessment”) is to be.  The Copyright Royalty Board has beat the July 8 deadline for noticing the proceeding and has posted the notice and the rules for the hearing.

The “Notice announcing commencement of Initial Administrative Assessment proceeding and requesting Petitions to Participate” can be found here:

The regulations require the participation of the MLC and the Digital Licensee Coordinator (DLC) in the proceeding and permit the participation of copyright owners, digital music providers, and significant nonblanket licensees. 37 CFR 355.2(c)–(d).

The Judges hereby announce commencement of the proceeding, direct the MLC and the DLC to file Petitions to Participate, and request Petitions to Participate from any other eligible participant with a significant interest in the determination of the Initial Administrative Assessment…

Any participant that is an individual may represent herself or himself. All other participants must be represented by counsel….

Petitions to Participate and the filing fee are due on or before July 23, 2019.

The CRJ’s rules relating to the proceeding can be found here and have some relevant language relating to who can participate in addition to the MLC and DLC:

[T]he Judges believe that the views of other participants may be helpful, and perhaps essential, for the Judges to determine whether good cause exists to exercise their discretion to reject a settlement. The Judges, therefore, have modified [the regulations for the settlement negotiations and proceeding] to clarify that participants other than the MLC and DLC may participate in settlement negotiations and may comment on any resulting settlement.