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.

 

 

 

@NorthMusicGroup’s Excellent Analysis of MLC Metadata Issues

It has been patently obvious from the first discussions of the Mechanical Licensing Collective several years ago that transitioning from a century of song-by-song licensing was going to be a highly costly and highly complex process.  The MLC was sold to songwriters on the idea that there would be no administrative costs to song copyright owners for participation in the MLC.  Why?  Because the services were going to pay for those administrative costs.  Like the world’s songwriters, we take them at their word.

Zero means zero.

Now that it is time to actually implement the MLC, addressing those administrative costs have become front and center.  The Copyright Office has put a number of issues out for public comment for purposes of drafting regulations covering that implementation including what metadata must be delivered to the MLC.  Those regulations are a significant inflection point for driving the industry toward metadata standards that start in the recording studio and end at the distribution point.

If we fail to seize this opportunity, it is not a very big leap to see a true morass at the MLC.  But before we deal with the prospective solution, the Copyright Office needs to address the retrospective problem.  Remember, the MLC is charged by the U.S. Congress with the task of licensing all songs in copyright that have ever been written or that ever may be written and is exploited under the blanket license.  The first clause of that disjunct is every song in copyright that has ever been written–in any language–and that’s a lot of songs.  And even more metadata.

The MLC “global rights database” is an empty vessel that must be filled and how that vessel is filled–and the cost of filling it–must be addressed now.  It is hard to believe that an organization that in the last nine months has failed to launch a website beyond what anyone could throw up with a Squarespace account is going to hit their January 1, 2021 deadline (the “License Availability Date”).

In addition to public comments, the Copyright Office is arranging for calls with interested parties provided that the party initiating the call document the discussion in a letter that is posted on the Copyright Office website.  You can read the letters here–if you know what to look for.  These calls tend to focus on some of the more bread and butter issues that one would have thought would have been resolved before any entity was designated as the MLC.  This is particularly confusing since the services get the benefit of the MMA safe harbor immediately, but may not be able to account to songwriters for the foreseeable future.  And the blanket license was kind of the point of the whole exercise.  And, of course, the coronavirus is the tailor-made WFH excuse that will mask a thousand failures.

I want to call your attention to an excellent confirming letter by Abby North that hits many of these issues head on.  We’re really glad that she raised these issues with the Copyright Office so that the Office gets the perspective of independent publishers and songwriters who are expecting the MLC to cover the cost of preparing and delivering their metadata.

This passage is particularly illuminating:

Realistically, rightsholders with more than just a few works must have access to batch works registration tools: an excel spreadsheet template must be created and made available, and a method for that spreadsheet to be validated and then imported into the works database must be made available.

For the MLC database to have truly comprehensive, standardized and accurate works data and be compatible with global Collective Management Organizations (CMOs), the MLC must accept CWR as a works registration format. The MLC must also provide or support an affordable tool for creation of CWR files.

Common Works Registration (CWR) is the works registration standard utilized by most collection management organizations around the world.

There are multiple concerns related to the use of Common Works Registration (CWR) by the MLC. The first concern is pricing and availability of CWR software.

CWR is currently available as part of very expensive rights management software used by many mid- sized and large publishers. For rightsholders who do not have the budget or need for such rights management tools, there must be reasonably priced CWR availability to all rightsholders that need to register many musical works.

The second issue relates to whether a publisher IPI will be required by the MLC for a rightsholder to be allowed to submit a CWR file.

Currently, only publishers (as opposed to writers) may receive CWR Submitter IDs and be recognized as submitting parties. To affiliate as a publisher with ASCAP costs $50. To affiliate as a publisher with BMI costs $250. It is not reasonable to require a rightsholder to pay to get a publisher IPI, just so that rightsholder may submit CWR files to register its works.

The CWR specifications indicate a writer may be a CWR submitter. However, according to my research querying many of the world’s largest CMOs, those CMOs do not accept CWR files directly from writers, unless the writer is also a publisher with a CWR Submitter ID.

One reason for this is that the file-naming requirements within the CWR spec require a CWR Submitter ID. Another reason is simply that Writers thus far have not attempted to submit CWR files.

It would be advisable for the MLC to accept works registration files in the CWR data standard, but modify the CWR specified file-naming convention such that a submitter could be a rightsholder with no CWR Submitter ID.

I commend North Music Publishing’s comment to you as Abby North raises may critically important points that I fear will be swept under the rug.

It is important to note that there is a huge difference between ASCAP and BMI charging to affiliate and the costs of complying with the MLC’s registration formalities.  (Realize that MLC registration formality is different than a copyright registration filed with the Copyright Office.)  ASCAP and BMI compete with each other and unlike the MLC neither affiliation is required by the Copyright Act.

Another difference is that ASCAP and BMI are not funded by the music users (or collective licensees) and neither represented to songwriters that the music users would pay the entire cost of administration–including submitting metadata, tax documents, correcting mistaken registrations, and otherwise complying with the MLC’s formalities.  This is particularly mystifying to ex-US songwriters who have quite a different experience with their local collecting societies.

Because if “the services will pay for it” doesn’t include these out of pocket costs taken–there’s that word again–by the Congress by imposing the formality in the Music Modernization Act, then it looks like the only thing that “administration” does cover is the tens of millions of the cost of the MLC’s rather luxurious overhead.  Overhead that looks even more luxurious with each passing day in the time of the virus.

If these issues that Abby North raises do not get fixed, there is really something wrong going on.

 

Where’s the Money? What’s My Name? @CopyrightOffice Unclaimed Royalties Symposium Update from @SGAWrites

[Editor Charlie sez:  Here’s an update from Songwriters Guild of America counsel Charles Sanders on last week’s Copyright Office Unclaimed Royalties Symposium in Washington, DC.  The Copyright Office is supposed to post a video of the event at some point.]

WASHINGTON, DC: I had the opportunity yesterday to attend and participate in, on behalf of the Songwriters Guild of America (SGA), the US Copyright Office “Kickoff” symposium on the eventual disposition of unmatched mechanical royalties that will soon be turned over to the Mechanical Licensing Collective under the new Music Modernization Act.

It was a good start to a healthy music community discussion, provided that next time around we delve into the more difficult issues that have been pointed out by the US and global music creator community, as voiced yesterday by SGA. These include the fact that the creator community –despite dozens of requests over the past several years by SGA (and other attendees such as indie publisher Monica Corton and MLC Chair Alissa Coleman)– still does not know how much money in unmatched royalties is actually being held by the digital delivery services. The amount is suspected to be in the hundreds of millions. SGA was the only participant to raise this issue yesterday, and received no response.

SGA also noted for the record from the podium that the data points identified in the legislation for mandatory inclusion in the Musical Works Database still do not include the NAMES OF COMPOSERS AND SONGWRITERS, a serious omission (to say the least) that SGA has respectfully asked the US Copyright Office to address as soon as possible. It was further noted that SGA President and hit songwriter Rick Carnes, and the SGA board of directors, support strong Copyright Office oversight regarding the activities of the MLC, especially concerning identification of unmatched royalties, an issue fraught with potential conflicts of interest within the MLC board.

Society of Composers and Lyricist (SCL) president and composer/arranger /condutor Ashley Irwin, and Songwriter/Recording Artist Michelle Shocked, joined SGA in making very powerful points concerning the need to ensure the voice of the individual, independent music creator is heard on all MLC issues. They also noted for the record that the abrupt decision of independent Songwriter/Artist/Activist David Lowery to leave his position as an MLC committee member was not addressed at the meeting, nor was the process by which he will be replaced a topic of discussion. “The independent music creator community wants and should have a voice in that process,” said Irwin. “Creators have suffered grievous harm at the hands of the digital distributors,” added Shocked, “and we deserve to be heard.” She received an ovation following those very pertinent remarks at the very end of the program.

STAY TUNED.

Howard Berman: A tribute to an outstanding Register of Copyrights

Dr. Carla Hayden, the newly installed Librarian of Congress, removed Maria Pallante from the position of Register of Copyrights on Friday, Oct. 21. The move was sudden, resulting in the extensive speculation over the decision that we have seen since. Lost amid this speculation is the fact that Pallante served the nation well for nearly six years as an outstanding Register of Copyrights.

Over the course of my 30 years in Congress — and especially during my tenures as chairman and ranking member of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet — I had the opportunity to work with several Registers, all of whom I relied upon for independent, expert counsel. As Register, Pallante continued that fine tradition, bringing a strong vision for the future of the Copyright Office and the American copyright system in the rapid technological advances of the 21st century….

Whatever the basis for Dr. Hayden’s decision to remove Register Pallante, we should not overlook that Maria Pallante served the Copyright Office, the Library of Congress, the Congress and the nation with rare vision, dedication and fairness. We can only hope that her successor has those qualities in equal measure.

Read the post on The Hill