Pledge Music Fiasco is Weirder Than You Think PT II: Who is behind Panama company Dolan Services Inc?

It’s been awfully quiet over at Pledge Music.  After declaring in May they were going into administration (UK equivalent of bankruptcy) I can find no reporting that indicates Pledge has even started the process.

Here is the current website notice. Completely lacking in specifics. Nothing about administration. Maybe this is normal. Maybe it’s not. I will say that publicly available documents indicate the financial history of Pledge Music is extraordinarily complex.  And if I were an administrator or creditor I would have a lot of questions. This could be the reason for the delay.

My colleague here at the Trichordist, David Lowery published this extensive overview of the Pledge Music fiasco two months ago. In the article he goes beyond the SEC charges against one of Pledge Music’s current owners and looks into the strange structure of the company; the multiple sub companies; the related entities; the offshore “panama papers” shell companies; and an SPIV (special purpose investment vehicle).  Quite a complex structure for a company of its size.

Go read the piece: The Pledge Music Fiasco is Weirder Than You Think.

I’ve been looking at another loose end with Pledge Music.  Who was the original investor that funded the company?  Here is an excerpt of an April 2015 interview that Benji Roger (Co-founder of Pledge Music) did with Andrew Warner of Mixergy.

Andrew: Where did you find the angel investors who funded this and allowed you to actually bring it to fruition.

Benji: It was somebody I knew. I basically pitched them the idea and I said, “Who should I send this to?” I sent out, I think, five business plans originally and I said, “Who would you send this to? Who do you think this is a good idea for?” One guy wrote back and he was like, “I love this. This reminds me of how Obama was elected.”

Andrew: Who was the guy?

Benji: He was just a friend. He’s a private guy. He doesn’t want to–

Andrew: He doesn’t want–can you tell us what he does for a living that he can suddenly do this? Is he a musician? Is he an entrepreneur?

Benji: No. He’s in a totally other space. He’s in a totally other space. He’s a very private lad. I don’t want to–

Andrew: But you can’t even say what his background is?

Benji: No. He went to business school.

Andrew: That’s it?

Benji: That’s what I will say.

Andrew: Is it his dad’s money? His parents money?

Benji: No. It’s his.

Interesting.  Go to the UK website where UK companies file required corporate documents. Look up Pledge Music LTD. By process of elimination (all the other original investors are listed by real name) it seems the silent investor is represented by an anonymous Panamanian company called Dolan Services Inc. This is from the 2010 Shareholder list.

Here is one installment of the money coming into the company. This document was filed March 25th 2009.  

Notice the share amount matches Dolan Services Inc.  So it’s reasonable to conclude this is the “silent” investor, and clearly the source of the startup capital for Pledge Music. So who is Dolan Services? An archive of the Panamanian Corporate registry seems to provide an answer. Notice the company was formed approximately 3 months before Pledge Music declared the investment and shortly after Pledge incorporated. And this seems to be the company’s only investment.

So It’s these folks right?

 

Probably wrong.  These corporate officers are listed on hundreds if not thousands of Panamanian companies.  This is a classic shell company registration operation. Just drill down on one of the officers.

He is listed on all of theses companies as an officer. This is only a partial list. Hundreds of companies.

I’m using this archive of the Panamanian companies because I can’t seem to find Dolan Services in the Panamanian registry any longer.  It’s possible that I’m not searching properly as I do not speak Spanish. Strange. (Any help here is appreciated).

Dolan Services Inc. continues to be listed as the largest Shareholder in Pledge Music until late 2015.  Then the filings at the UK Company House become a mess.  At one point UK officials target Pledge Music with a form of “delisting.” Probably for not filing proper paperwork. But as far as I can tell Dolan Services seems to disappear from the Pledge Music financial documents after 2016. I could be wrong. Like I said the filings are a mess.

I don’t know what any of this means.  And I’m not implying anything, other than the fact Pledge Music was originally funded by an anonymous Panama registered company that seems to have disappeared.

PLEASE CORRECT ME IF I AM WRONG. Leave comment if you have more information.

 

 

Guest Post: The TAZ, Pirate Utopias and YouTube’s Obsession with Safe Harbors

Guest post by Chris Castle

“[A]s you begin to act in harmony with nature the Law garottes & strangles you – so don’t play the blessed liberal middleclass martyr – accept the fact that you’re a criminal & be prepared to act like one.”

Hakim Bey from “T.A.Z.: The Temporary Autonomous Zone, Ontological Anarchy, Poetic Terrorism”

YouTube’s CEO Susan Wojcicki is frantically wheeling around Europe this week in a despairing effort to establish a US-style safe harbor in Europe and undermine Article 13, the Copyright Directive for a Digital Single Market.

Let’s understand that the very concept of a safe harbor for YouTube has its roots deep in the pirate utopias of Internet culture–a fact that may get overlooked if you aren’t a student of the Silicon Valley groundwater.

The Value Gap really owes its origins to the anarchist Peter Lamborn Wilson who wrote the seminal text on pirate utopias under the nom de plume“Hakim Bey” entitled “The Temporary Autonomous Zone, Ontological Anarchy, Poetic Terrorism” (1991) or, as it is known perhaps affectionately in hacker circles, simply “TAZ.”  I for one am not quite sure what makes “poetic terrorism” different from unpoetic terrorism, utopian terrorism, anarchic terrorism, or just plain old terrorism, but it may explain why YouTube just can’t bring itself to block terrorist videos before they find an audience.

But the TAZ helps illuminate my own more truncated term for the Value Gap–the alibi. An alibi for a pirate utopia where the pirates run cults called Google and enrich themselves from the prizes they go a-raiding.

In the early days of online piracy there was a fascination with locating servers in some legal meta-dimension that would be outside of the reach of any law enforcement agency. Sealand, for example, captured the imagination of many proto-pirates, but Sealand is a little to clever to put themselves in a position requiring evacuation by the Royal Navy before the shelling begins.  So Sealand was ruled out.

Instead, Google–largely through YouTube–created its own pirate utopia through manipulation of the DMCA safe harbor, one of the worst bills ever passed by the U.S. Congress–and that’s saying something.  Google busily set about establishing legal precedents that would shore up the moat around their precious TAZ.  None of Google’s attacks on government should be surprising–anarchy is in their DNA.  As former Obama White House aide and Internet savant Susan Crawford tells us:

I was brought up and trained in the Internet Age by people who really believed that nation states were on the verge of crumbling…and we could geek around it.  We could avoid it.  These people were irrelevant.

And “these people” were stupid enough to give a safe harbor to protect the TAZ.  Because here’s the truth–the safe harbor that has made Google one of the richest companies in the world while they hoover up the world’s culture actually is the quintessential temporary autonomous zone.  It only exists in a changeable statute and the judicial interpretations of that statute, whether the DMCA or the Copyright Directive.  And like HAL in 2001: A Space Odyssey, they’re not going to allow that disconnection without a fight.

But YouTube’s CEO Susan Wojcicki will not be singing “A Bicycle Built for Two” as she flails about in the disconnect of YouTube.  Her basic argument is that “imposing copyright liability is destructive of value” for “open platforms” like YouTube.  “Open platforms” bear a striking resemblance to the TAZ, yes?  Ms. Wojcicki , of course, purveys a counterintuitive fantasy because unauthorized uses for which copyright liability accrues is what destroys the value of the infringed work.  What Ms. Wojcicki is harping about is how copyright infringement destroys value for YouTubeand its multinational corporate parent, Google.  This is what happens when stock options invade a pirate utopia.

Not only has she got it wrong, but what she is actually whingeing about is the threat posed to her YouTube pirate utopia by the Copyright Directive and the united creative community.  And as HAL might say, the YouTube mission is too important for me to allow you artists to jeopardize it.

 

The Values Gap: CD Baby Shows that the Safe Harbor is a Privilege to be Respected and Not an Alibi to be Cheapened

by Chris Castle, from Artist Rights Watch

It’s hard to believe that after a good ten years of being called out, YouTube still–still–cannot manage to stop neo-Nazi and white supremacist material from getting posted on its network.  We’ve been calling out YouTube on MusicTechPolicy and the Trichordist for these inexcusable failures again and again and again.  And yet they keep recycling the safe harbor as an alibi–and they’re doing it again in Europe on Article 13.

I can understand that YouTube doesn’t want to “censor” users and there may be close cases from time to time.  For example, I could understand why YouTube CEO Susan Wojcicki might not want to take down videos from Seeking Arrangement that encourages young women into a “sugar daddy” relationship to pay for college and health care.

Sure, one of her Google colleagues was murdered by a woman he met through Seeking Arrangement.  Maybe Seeking Arrangement is a close case, particularly for a company that opposed the Stop Enabling Sex Traffickers Act.

But you know what’s not a close case? It’s right there in the title of the song–“Who Likes a N—“.  You would think that one would get picked up in a simple text filter of debased language.  But it wasn’t ten years ago and it still isn’t.  Not a close case.

UPDATE:  Author’s note–this YouTube video has been taken down and the account deleted–AFTER this post.

And then there’s “Stand Up and Be Counted” by the White Riders.  It’s not that hard to figure out by listening to any of the many versions of this song that it’s a recruiting song for the Klu Klux Klan.  And it’s not that YouTube doesn’t know it–this version of the hate song has clearly been filtered by YouTube–oh, sorry.  Not by YouTube, but by the “YouTube community.”  But why is it that a KKK recruiting song doesn’t violate YouTube’s terms of service if it doesn’t shock Susan Wojcicki’s conscience?

White Riders

David Lowery called out YouTube and CD Baby for allowing hate rock to be distributed on their platforms.  Within hours, CD Baby pulled the account.  But not YouTube.

Let’s understand a couple things.  First, this is not hard.  The Anti Defamation League and the Southern Poverty Law Center have actual lists of these bands.  Both MusicTechPolicy and The Trichordist have been hammering this issue for years.  Simple word searches could accomplish a large percentage of the task–the N word, KKK recruiting and images of Adolph Hitler are not close cases.

And let’s understand something else.  When users post movies, television shows and recorded music on YouTube, all of those materials have gone through some kind of legal review for standards and practices.  That doesn’t mean there’s no fair use or that there are no parodies.  It does mean that a human has thought about it because free expression is a judgement call.

Free expression is deserving of human examination.  You cannot create a machine that will do this for you.  You cannot rely on crowd sourcing to stop all uses of these vile terms and images–because in every crowd there’s someone who thinks it’s all just fine.  That’s why they’re called mobs.

YouTube, Facebook and all the Article 13 opponents actually are using a complete spectrum of review.  The problem is that they are cost shifting the human review onto artists and to a lesser extent their users for two reasons.  First and foremost is that they hope not to be caught.  That’s what the safe harbor is really all about.  The value gap is just a part of it–the other part is the values gap.  How do these people sleep at night?

But I firmly believe that the real reason that they shift the human cost onto those who can least afford it is because they’re too cheap to pay for it themselves.  They are willing to take the chance because getting caught so far has been a cost of doing business.

The real cost of their business is the corrosive effect that they have on our discourse, our families and our children.  There has to be a way to make YouTube responsible for their choices–and CD Baby showed this week that it’s not only possible but necessary.

If YouTube and their paid cronies want to try to convince legislators that they deserve special protection, they need to live up to the standard that CD Baby set this week  And they need to do that before they get any further special treatment.

As we’ve said for years, the safe harbor is a privilege not an alibi.

Oops: Government Subsidized Satellite Broadcasting Monopoly Sirius Decries Lack of Competition Among Rightsholders

Someone somewhere at Sirius is not thinking clearly.  For some reason. We are not sure why. 

Liberty Media CEO Greg Maffei should maybe head over to the Sirius Washington DC communicastions shop and make sure they aren’t smoking weed with Joe Rogan and Elon Musk.

Chris Castle at MusicTechPolicy reports that Sirius opined in a recent op ed that regulators might want to consider existence of anti-competive monopolies in the music industry when making new policy.  We agree!

Using Forks and Knives to Eat Their Bacon: More Misdirection and Dodgeball from SiriusXM

We are gonna cover this strategic blunder by Sirius in more detail later.  But for now suffice it to say, it’s pretty stupid to make the argument that there is a lack of competition among record labels when Sirius is in fact a monopoly.  Not just any monopoly but a monopoly that relies on federal compulsory licenses that demand recording owners/performers/songwriters license to Sirius at a below market rates.

Further Liberty Media seems to be angling to combine Sirius, Pandora, LiveNation-Ticketmaster and even IHeartRadio into a single company.  You sure you want to bring up the competition issue? The public outcry to AT&T – Warner tie up was huge!  Imagine the difficulty for this merger. That said I’m probably in the minority but depending on how it is done, I don’t necessarily think that a tie up of these properties is necessarily bad for artists. For one I’d like to see some real competition for Apple, YouTube and Spotify.  However in order to do this Sirius and Liberty would need to get artists (and seemingly its own radio hosts!) on board. They’d need a really compelling vision.  Nickel and diming rights holders, performers and songwriters on the MMA is absolutely counterproductive.

This is a losing strategy. Stop. Consider this an intervention. Put the pipe down.

You see the thing is Sirius has a point when it complains it is treated differently than its competitors on terrestrial radio. Terrestrial radio pays no royalties to performers.  This should be fixed. Performers and labels are allied with Sirius on this point.  Over the long term correcting this bit of unfair competition is more relevant to Sirius shareholders than trying to create single company carve outs in the proposed Music Modernization act.

Then there is the matter of what the real world looks like outside the beltway. Sirius, senators and music industry lobbying groups are not looking at the unintended consequences. As each successive special interest group adds a new carve out, support for the Music Modernization Act decreases among musicians and songwriters.  Don’t listen to inside the beltway experts. This blog has a better sense of what rank and file performers and songwriters are really thinking. The MMA seems at a tipping point with the rank and file. Something could easily tip that balance against.  Indie performers and songwriters still have options.  A single Senator could put a hold on a bill.  Already there is an ad hoc group of free market songwriters that have coalesced around Cornyn, Lee and Cruz.

It might not even be performers/songwriters that derail this bill.  This will go back to Rep Nadler in the house.  Gutting the MMA is not gonna sit well with Nadler. Especially as the pre-72 “Classics” provision was his baby. He is likely to become committeechairman in January. I’ll bet real money he drops the bill if it goes against his long held principles on Pre-1972s.

He knows what most rank and file performers know:

Performers/Songwriters don’t need the MMA. We will always have Paris.  And lawsuits. Digital services are the ones out of compliance with the law. Not rightsholders. The status quo works for rightsholders.  Further the Spotify/Sirius/XM class actions have demonstrated that there is an army of class action lawyers out there ready to take up our cause. So did we file 5 or 6 class action lawsuits? In all the excitement we lost count.

 

 

 

Guest Post @musictechpolicy: Using Forks and Knives to Eat Their Bacon: More Misdirection and Dodgeball from SiriusXM

By Chris Castle

Right on cue, SiriusXM attacks the Music Modernization Act at the 11th hour with a frothy op-ed in Billboard stringing together what I would argue are a lot of half-truths and misrepresentations in a desperate effort to fool both artists and the Congress into preserving the Sirius crony insider deal on subsidized royalty rates.

Sirius’s whingey Billboard post is a failed dezinformatsiya campaign focusing on a feigned concern for artist welfare that’s about as convincing as an ivory poacher joining PETA.  Sirius then makes mysterious assertions about how artists have given up getting a broad performance royalty for terrestrial radio which Sirius surely knows is false as negotiations continue between MusicFirst and the National Association of Broadcasters, and for a big finish adds some rhetorical bobbing and weaving that seems to boil down to kvetching about why can’t Sirius get recordings and songs for free.

Only a monopolist could pull off this kind of rhetorical thimblerig with a straight face and only a media consolidator like Sirius’s and Pandora’s owner Liberty Media could feel entitled to do so.  Sirius is getting bad advice–yet again.

The Charade of Horribles Begins Here

Sirius starts off with a blatant misdirection–somehow the monopolist satellite radio operator is oh so very concerned about how artists are paid under Sirius’s “licenses” for pre-72 works.  According to Sirius, “The Company wants to make sure that a fair share of the monies it has paid, and will pay, under these licenses gets to performers.”  Sounds good, right?

Wrong.  The statement is pure deception.  Sirius leaves important facts out of the argument: the only reason that Sirius is paying anything at all on pre-72 artists is because The Turtles and the major labels each sued Sirius in litigation that Sirius fought for years with all the wrath of big law firms trying to crush uppity artists.

The Sirius post in Billboard addresses the major label settlement of that lawsuit which itself had two components–a lump sum payment of $210 million that the labels have distributed or have committed to distributing to artists, and also a go-forward license.  (The Turtles got even more for the class action settlement–check here to see if you’re in the class.)

When Sirius refers to a “license” without also referring to the lawsuit that produced the license, it sounds like the “license” is just normal course business.  Not true–Sirius had to be dragged kicking and screaming through courts in California, Florida and New York to get to any conclusion at all.  So pretending there was a license without the lawsuits that drove Sirius to the table is quite the equivocation.

And frankly if it weren’t for The Turtles there probably would be no solution at all.  It sounds quite different to say that Sirius is so concerned about artists that they allowed themselves to be sued and are cheesed that artists still mistrust them as royalty deadbeats, right?

Not to mention–it’s unclear that there actually are any licenses to pay on in the first place if you think a license should actually have like, you know, terms and stuff.   Sirius evidently is taking extreme positions in a negotiation with the major labels that is very contentious according to the New York Times.  So the reality doesn’t exactly comport with the Sirius fantasy.   Shocking, I know.

Now Sirius wants to run to Congress at the 11th hour to use the MMA to amend a private settlement agreement because they are so concerned about payments to artists under private contracts?  Sorry, that dog won’t hunt.  If there’s a royalty dispute between artists and labels, it’s not going to get fixed by either SiriusXM or the U.S. Congress.  It will get fixed by artists, their managers and lawyers just like always.

What Sirius want to do is gin up a fake 11th hour issue to try to derail the MMA altogether.  Why?  They’re doing it partly because it looks like MMA is going to limp across the finish line in the coming weeks, but they’re doing it mostly because they think we’re all idiots.

So don’t come crying to me about how much Sirius care about artists when they would be happily stiffing artists to this day if the artists hadn’t sued them into submission.  (Safe harbor fans take note.)

My, What Big Teeth You Have 

Sirius then goes on to spread squid ink about the Congress getting out of the free market by ending the Sirius subsidized royalty rate–subsidized by the very artists who they profess to care about so much–in favor of the “willing buyer/willing seller” standard which tries to approximate a free market negotiation.   You have to love the irony in this line from the Sirius op-ed:

The willing buyer/willing seller standard functions well in competitive markets. In fact, it would work great if there were 100 labels to buy music from, but there isn’t — in an overwhelming majority of cases there are only three.

Actually–there are well over 100 labels to “buy music from”, and saying otherwise is an insult to independent labels around the country and all over the world.  But…there’s only one monopoly satellite radio carrier–SiriusXM,  which itself is a combination by takeover of Sirius’s competitor XM Radio which we remember fondly as the brainchild of one of the greats, Lee Abrams.

Sirius’s point is exceptionally ironic and some might say entirely disingenuous when you consider the company’s control over Pandora acquired as a result of corporate hard ball in its head fake merger negotiations with Pandora–which strangely enough also took the Sirius position on stiffing pre-72 artists and got sued right along side the satellite monopolist.

And of course it must be said that all of these machinations are orchestrated by media consolidator Liberty Media, the massive conglomerate whose CEO Greg Maffei “…is chairman of Sirius-XM, Pandora Media, Live Nation Entertainment (which owns Ticketmaster), Liberty TripAdvisor and Qurate Retail — the recently rebranded owner of QVC, HSN and Zulily. He’s a director of Charter Communications, the No. 2 cable operator (Liberty is the largest stockholder), and online real estate service Zillow” according to Variety.  “[Maffei] last year made $19.8 million — up 17% over 2016 and equal to 223 times the $88,786 that the average Liberty Media employee collected.”

And then there’s the persistent story about Liberty Media acquiring iHeart (see term sheet here).  So that’s all pretty cozy cronyism.

It will come as no surprise to Sirius that when you ask someone to invest in your company, that usually results in that investor getting shares of stock–like when an artist subsidizes the Sirius royalty rate.  I see no shares of Sirius on offer here, and it’s just the usual drivel that is based solely on “I don’t wanna goo goo goo.”  The free ride is over (hopefully).

IRFA Much?

As if the trip to Sirius’s alternate universe weren’t weird enough, we now have this nonsense statement that requires a trip back to messaging for the failed Internet Radio Fairness Act supported by Pandora, SiriusXM and Google Shill Listersthe Electronic Frontier Foundation:

SiriusXM is asking the simple question: “Why are we changing the rate court evidence standard for musical compositions in this legislation?” So, artists have agreed that they do not want to fight for terrestrial radio to pay sound recording royalties, SiriusXM has accepted that decision. But why is terrestrial radio given another break in rate court for the musical composition rights?

Let’s disabuse Sirius of the idea that artists have given up anything on the fight for artist pay for radio play.  Those negotiations are on-going and last time I looked the #irespectmusic campaign was alive and kicking.  It’s a marathon not a sprint.

I can understand that Sirius is envious that Big Radio has succeeded in administering an ass kicking to artists for a long time, but those days are ending.  Thanks to Ranking Member Jerry Nadler and his “Fair Play Fair Pay” bill, radio may soon be paying their fair share in the new Congress.  And remember–for quite some time, Sirius has not wanted broadcast radio to be royalty-paying like Sirius, instead Sirius wanted to be royalty-free like broadcast radio.  Sorry, the answer is artists have not given up anything on fairness.

The change to the rate court evidence standard for songs is hardly a break for terrestrial radio given the package of rate court relief in MMA–if anything, it allows songwriters a greater opportunity to argue for higher rates.  More rhetorical magic tricks at the thimblerig table.

Let’s be clear–Sirius is using rhetorical tricks and sleight of hand to draw artists’ attention away from the prize.  Whatever problems we may have in the family, we’re not going to take advice from them in their starched white shirts using forks and knives to eat their bacon.

@mikehuppe: Broadcast Radio Makes an Ironic Plea for Fairness — Artist Rights Watch

SoundExchange’s CEO says it’s time radio starts paying all music creators fairly for their work.

On Monday, a group of radio broadcasters penned a letter in support of the National Association of Broadcasters’ (NAB) push for deregulation of the $14 billion radio industry. Their letter was based on the NAB’s petition to the FCC this past June, in which the NAB sought to allow expanded broadcaster ownership of radio stations (i.e., increased consolidation) throughout the country. The NAB’s justification: broadcasters must adjust their business model to the realities of the new streaming world.

As a representative of the many creative parties who help craft music, we are frequently on the opposite side of issues from the NAB. And while I can’t comment on NAB’s specific requests, I was delighted to find so much common ground in their FCC filing in June….

I agree with the NAB that the law should “finally adopt rules reflecting competitive reality in today’s audio marketplace” and should “level the playing field” for all entities in the music economy.

If radio truly wants to modernize, it can start by taking a giant leap into the 21st century and paying all music creators fairly for their work. Stop treating artists like 17th century indentured servants, just so radio can reap bigger profits. If radio wants to have rules that reflect the music industry of today, then that should apply across the board.

We should resolve this gaping unfairness to artists before we begin talking about allowing radio to consolidate even further.

 

Read the post on Billboard

h/t Artist Rights Watch

Factiness EU Style: A Dedicated Group of Like Minded People Carpet Bombs The European Parliament–MusicTechPolicy

 

EU Hackathon is right! Google’s sleazy EU lobbying firm at the center of the controversy over spam email, robo call, and twitter bot campaign against MEPs supporting articles 11 and 13 of copyright directive. 

I am republishing this from the MusicTechPolicy blog as this is completely relevant to our coverage of information warfare style tactics used to overwhelm communications channels with MEPs on copyright directive. See here, here and here.  Much of this activity came from groups associated with Google and appears to have been controlled and directed by Google’s lobbyist N-Square.  This should be investigated as the use of these tactics will likely increase as Google now faces a steep antitrust fine from the EU.

 

by Chris Castle

As MTP noted in Fair Copyright Canada and 100,000 Voters Who Don’t Exist back in 2009, the legitimate desire by governments to use the Internet to engage with the governed is to be admired.  But there have been incredible and probably illegal uses of the Internet to overwhelm elected officials with faux communications that reek of Google-style misinformation and central planning in the hive mind of the Googleplex.

We saw this again with the Article 13 vote in Europe last week with what clearly seems to be a Google-backed attack on the European Parliament for the purpose of policy intimidation.  That’s right–an American-based multinational corporation is trying to intimidate the very same European government that is currently investigating them for anticompetitive behavior and is staring down a multi-billion dollar fine.

Vindictive much?

Advocacy against Google’s interests on artist rights and copyright issues (not to mention human trafficking, advertising illegal drugs and counterfeit goods) can no longer be just about making a good argument to policy makers.  It has to anticipate that Google will pull these DDOS-type stunts capitalizing on what seems to be the element of surprise.

Except there shouldn’t be any surprise.

There is a real problem with policy-by-DDOS governing.  For example, Cass Sunstein, then the Administrator of the Obama Office of Management and Budget, issued a memo in 2010 to the heads of executive branch departments and regulatory agencies which dealt with the use of social media and web-based interactive technologies.

Specifically, the Sunstein memo warned that “[b]ecause, in general, the results of online rankings, ratings, and tagging (e.g., number of votes or top rank) are not statistically generalizable, they should not be used as the basis for policy or planning.”  Sunstein called for exercising caution with public consultations:

To engage the public, Federal agencies are expanding their use of social media and web- based interactive technologies. For example, agencies are increasingly using web-based technologies, such as blogs, wikis, and social networks, as a means of “publishing” solicitations for public comment and for conducting virtual public meetings.

The European Parliament would do well to take a page from Sunstein’s thinking and limit the amount of anonymous contact that anyone can have with MEPs when the European Parliament is suffering a DDOS-style attack.

But the most important thing for the European Commission to take into account is that a company that is the target of multiple investigations is using the very market place monopoly that caused the competition investigations to intimidate the European government into bending to its will on Article 13.  (That, of course, is the biggest difference between the Europeans and Article 13 and the Americans and SOPA–the US government had dropped the US antitrust investigation into Google and it had unparalleled access to the White House.  So the two are really nothing alike at all.)

The European Commission needs to launch a full-blown criminal investigation into exactly what happened on Article 13, particularly since there is another vote on the same subject coming in September.  Properly authorized law enforcement acting swiftly can set sufficient digital snares to track the next attack which surely is coming while they forensically try to figure out what happened.

Advocates need to understand that Google is a deadly force and this is the endless war.  Good arguments are clearly not enough anymore, particularly as long as the government and law enforcement do nothing to protect democratic values from bully boy tactics.

Are Data Centers The New Cornhusker Kickback and the Facebook Fakeout? — Music Technology Policy

In case you were scratching your head about why Nebraska Senator Ben Sasse decided to stick his beak into trying to continue discrimination against recording artists who had the misfortune to record before 1972–here’s a possible explanation.  Maybe he was just getting his beak wet?

Remember, Senator Sasse introduced an amendment to the Music Modernization Act in the dead of night the day before the markup of MMA in the Senate Judiciary Committee. While Senator Ron Wyden–another data center beneficiary of Amazon, Facebook and Google–was at least trying to dress up his complicity in a Chanel suit and Louboutin shoes.  Senator Sasse went the more direct route:

Now why might Senator Sasse be so interested, particularly given Nebraska’s musical history?  It turns out that there is quite the competition between Nebraska and Iowa for Silicon Valley’s data center business, particularly given the renewable energy profile of each state (wind is 37% of Iowa’s electricity production and about 20% of Nebraska (including hydro).  That checks the box for Silicon Valley.

Of course, as we see from Senator Sasse’s tone deaf foray into copyright lobbying, Silicon Valley thinks they can play the rubes in return for building data centers in their state, just like they did with Senator Ron Wyden and the people of Oregon.  What does stiffing pre-72 artists have to do with data centers?  Nothing.  What does it have to do with playing footsie with royalty deadbeats like Google and Facebook?

Everything.

And rumor has it that there is a deal in the wings for a new Google data center in Nebraska.  Which also explains a lot.

But somehow, Facebook knows that its Silicon Valleyness may not be that popular with the rubes.

According to the Data Center Dynamics site, Facebook has been going to great lengths to hide its involvement in massive data centers being built in Nebraska, which gives “Cornhusker Kickback” (or Facebook Fakeout) a whole new meaning:

Operating under the alias Raven Northbrook, Facebook has its eyes on Nebraska, DCD can exclusively reveal.

Late last year, local council officials granted approval for a large data center project in Sarpy County, Nebraska, but the company behind the huge facility was kept a secret.

Now, DCD can confirm that the corporation hoping to build four 610,000 square foot (56,670 sq m) data center halls at the Sarpy Power Park is Facebook.

You can run servers, but you cannot hide them

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Raven Northbrook, certificate of authority, Facebook

Source: Nebraska Secretary of State

Sarpy County documents reveal that the company, which is publicly represented by infrastructure engineering and design solutions company Olsson Associates, goes by the name Raven Northbrook.

So maybe the Sasse sledgehammer amendment to discriminate against pre-72 artists is easily explained–just another swamp dweller swamping up the cash.

Read the post on Data Center Dynamics

 

Here Comes the Shiv: Sen. Sasse to Move to Strike the CLASSICS Act and Screw Pre-72 Artists With the MMA Bait and Switch— Music Technology Policy

Trichordist readers will not be surprised to learn that Senator Sasse is circulating an amendment to strike the CLASSICS Act from the Senate version of the Music Modernization Act. The amendment appears to have been drafted by the Google Shills at Public Knowledge–bringing the bait and switch right on cue.

This is, of course, the classic back stabbing we have come to expect from Public Knowledge, so is par for the course.  What that means, of course, is that Google gets to screw the pre-72 artists and get their new reachback safe harbor that the songwriters and publishers gave up.

We need to move on this quickly.  If you can call your Senator and ask them to oppose the Sasse amendment to the Music Modernization Act (bill number S. 2823), that would be great.  You can look up your Senator’s information on Phone Congress at this link.  Choose “Any Other Topic Not Listed Here” on the pull down “Topic” menu.

via Here Comes the Shiv: Sen. Sasse to Move to Strike the CLASSICS Act and Screw Pre-72 Artists — Music Technology Policy

Let’s Not Miss An Opportunity to Include Startups in the Music Modernization Act–MusicTechSolutions

By Chris Castle
(musictech.solutions)

Who took on the Standard Oil men
And whipped their ass
Just like he promised he’d do?
Ain’t no Standard Oil men gonna run this state
Gonna be run by folks like me and you

Kingfish, written by Randy Newman

If you’re one of the small group that has actually read the Music Modernization Act, I think you’d have to come away with the idea that this is legislation by the big boys for the big boys.  Nowhere is this unfortunate flaw more apparent than in the way that digital media companies “modernize” the way they treat themselves.  No wonder Digital Media Association (Amazon, Apple, Google, Pandora, Spotify) and the Internet Association (Amazon, Facebook, Google, Pandora, Spotify) love it so much–it’s just the same old story from Standard Oil or United Fruit.

But is MMA really intended for the biggest corporations in commercial history playing footsie or should we believe the sales pitch that it is intended for the innovative startups and new entrants?

It is not surprising that startups were apparently excluded from the legislative process that created MMA and are themselves silent–or silenced–observers.  Given that Google, Amazon, Apple and Spotify are on the other side, startups know which side butters their bread and what will happen if they voice any criticisms.  Like the python in the chandelier, nothing really need be said; startups know what happens if they challenge the big boys, particularly Google and Amazon who probably host their companies, serve their advertising or drive traffic to them.

The MMA permits these massive and aggressive incumbents to ultimately decide how much startups pay for access to the blanket license that we are told by DiMA’s CEO will unleash innovation and “fuel the next wave of creativity“.  Yet–if startups can’t afford to buy in to the license, it won’t do them much good, and as drafted the MMA allows their incumbent competitors to decide how much that buy-in will cost any startups or other of the much ballyhooed new entrants.  This all before a startup has to pay royalties to the collective–and in addition to any royalties.

How can this be fair?  It’s easy when your lobbyists write the rules.

The Congress delegates the government’s authority under the Music Modernization Act by creating two main bodies around the new government-mandated blanket license:  The “mechanical licensing collective” which is to represent those with songs to be licensed and the “digital licensee coordinator” which is to represent music users wishing to license those songs under the new blanket mechanical license.  Music users will answer to the “digital licensee coordinator,” presumably under some membership agreement yet to be drafted.

Both these bodies are supposedly approved by the Register of Copyrights (the head of the U.S. Copyright Office), but the Register has the unenviable position of being constrained to appoint certain types of entities or people by statutory criteria in the MMA.

One of those criteria is very majoritarian, if not downright oligopolistic–and I would suggest that for both the collective and the digital licensee coordinator the math alone limits the Register’s choice to one entity.  Here’s the relevant language for how the Register selects the collective:

“[The Register must choose an entity that] is endorsed by and enjoys substantial support from copyright owners of musical works that together represent the greatest share of the licensor market for uses of such works in covered activities, as measured over the preceding 3 full calendar years;”

And here’s the mirror version of the relevant language for how the Register selects the “digital licensee coordinator” (or “DLC”):

“[The Register must choose an entity that] is endorsed by and enjoys substantial support from digital music providers and significant nonblanket licensees that together represent the greatest share of the licensee market for uses of musical works in covered activities, as measured over the preceding 3 full calendar years”

So one thing seems true for both the collective and the coordinator:  They can only be entities enjoying “substantial support” by at least a plurality if not a majority of their respective markets on either side of the same coin.  I’m not quite sure how that definition presents a choice to the Register–more like it allows the biggest players to dictate the Register’s choice.  (How can there be two pluralities much less two or more?)

I would submit that this structure is a long-term recipe for disaster.

Others have and are writing about the conflict-ridden aspects of the collective, so I will focus here on the digital licensee coordinator which is equally, if not more, conflict-ridden than the collective.

By definition then, startups–who are potential music users most in need of the blanket license without having to pay minimum guarantees–are evidently excluded from any possibility of becoming the digital licensee coordinator.  The Congress effectively prohibits the Register from appointing one of them as the DLC, even if they were brave enough to raise their hand (see Yelp in the EU antitrust ruling against Google).

And don’t forget a main selling point of the MMA:  The music users (i.e., the “licensees”) pay an “administrative assessment” to cover the costs of running the mechanical licensing collective.  (An inherent conflict?)  The MMA authorizes the DLC to “equitably allocate the collective total costs across digital music providers…but shall include as a component a minimum fee for all digital music providers.”  (Although note that the assessment as a whole and perhaps the allocation ultimately has to be approved by the Copyright Royalty Judges–and good luck to startups being able to afford to appeal to the CRJs or a higher court.)

Plus the MMA authorizes the DLC to “[e]ngage in efforts to enforce notice and payment obligations with respect to the administrative assessment….”  AND the DLC also gets to set the “dues” payment for each “member.”

So if a startup wants the blanket licence, they have to pay a share of the assessment apparently determined by a representative of their biggest competitors PLUS a membership fee.  And then they get to pay royalties to the collective.  Note that this is a radical departure from the current law and adds another gatekeeper in between songwriters and their money.

If a startup fails to make all these payments, they can lose the blanket license even if they have paid all royalties on time.  No one can tell you what the minimum fee will be or the startup’s share of the assessment.  In fact, as new startups will likely enter the allocation for “membership” all the time, a real time percentage allocation for each “member” of the DLC will likely change pretty much constantly.  Plus the collective can enforce the blanket license royalties and the DLC can enforce the assessment payments and membership “dues” (aka rents).

“Modernization” legislation is an excellent opportunity to level the playing field for these companies that are no doubt afraid to challenge the incumbents like Google (known for being specially vindictive to any startup that challenges them–see Foundem and the European Union’s multi-billion euro antitrust litigation against Google).

It’s also important to realize that there is an exponential difference between the group of companies that the Register takes instruction from on the MLC compared to the group instructing the Register for the DLC.  Candidates for the DLC include Amazon, Apple, Google and Spotify–three of the biggest companies in commercial history plus the streaming platform that is easily the dominant actor in its relevant market both in the U.S. and many other countries.  This basically assures that no startup will ever be included as the DLC absent a government-mandated rotation.

The Music Modernization Act is a great opportunity to do something positive for the market rather than continue to reenforce the most dominant incumbents in history (see 60 Minutes, “The Power of Google“).  After all, it was their own carelessness and “permissionless innovation” that got us to this point.

Here’s some free advice to Congress:  Go wild.  Require appointing a startup or two or three as the DLC from time to time.  And since you’re dictating many attributes of the MLC’s board, if you really want to go truly off the reservation, require one of those startups to be from some place like Austin, Athens, Northern Virginia or Salt Lake–anywhere but Silicon Valley.  Wouldn’t that be real modernization rather than real entrenchment?

As a wise old Member of the Texas Congressional delegation once told me, they get to climb the ladder to the American Dream like everyone else.  What they don’t get to do is pull the ladder up behind them once they get to the top.

By limiting the choices of who can be the DLC, the government is mandating control to only the biggest of the big.  And giving them an antitrust exemption as the cherry at the top of the ladder.