As part of our series highlighting selected objections to the NMPA-backed Phonorecords V Subpart B settlement, we turn to the filing of the Society of Composers & Lyricists (SCL), representing approximately 4,000 composers, lyricists, songwriters, and music copyright owners. SCL asks the Copyright Royalty Judges to reject the proposed settlement, arguing that it locks in an artificially low mechanical royalty base rather than genuinely preserving creators’ purchasing power. 

SCL focuses particularly on what it calls the missing inflation of 2021 and 2022. Its objection argues that carrying forward the 12¢ benchmark fails to restore those unusually inflationary years and could perpetuate the resulting shortfall through every subsequent COLA adjustment. SCL objects that the NMPA settlement carries the Phonorecords IV formula into Phonorecords V in a way that effectively creates a new frozen mechanical. Rather than carrying forward the actual inflation-adjusted 2027 penny rate (for example), the settlement retains 12¢ as the benchmark, perpetuating the very rate-freeze problem Phonorecords IV’s COLA was intended to prevent.

SCL proposes instead a physical and permanent-download rate of approximately 15.6¢ beginning in 2028, followed by annual CPI adjustments which would take into account the 2021 and 2022 rates that the PR IV rates did not take into account in coming up with the 12¢ rate. 

The filing also returns to a familiar issue from Phonorecords IV: vertical integration among the parties negotiating the settlement. SCL invokes the Judges’ own earlier warning that relationships linking major publishers and record labels can create inherent conflicts requiring scrutiny before a private agreement is transformed into rates binding the entire industry. 

SCL also challenges the continued 24¢ ringtone rate, raises concerns about bundling, and disputes the proposition that agreement among major industry organizations necessarily represents a consensus of the individual creators whose statutory royalties will be determined. 

Perhaps the filing’s central point is the simplest: an annual inflation adjustment cannot repair an incorrectly low starting point. SCL asks the Judges to reject the settlement and encourage a new negotiation that includes the views of independent creator organizations before rates are fixed for 2028–2032.