Even More Bad Faith from @RonWyden on Copyright Small Claims Legislation

By Chris Castle

[This post first appeared on our sister site Artist Rights Watch]

Senator Ron Wyden is up to his old tricks–he’s got a secret hold on the CASE Act and is taking his usual ridiculous positions just to see if he can get away with it.  His day of reckoning has been coming for a long time and may have just arrived.  We don’t come to the Congress looking for a fight, but he does.  Maybe now he’ll get one.  Like any other bully, there’s only one way to make it stop.

Why would Senator Wyden care about the CASE Act?  Because Google does.  And why does Google care?  Because the CASE Act would provide meaningful relief to artists in all copyright categories caught up in DMCA hell, the ennui of learned helplessness brought on by the call and response of notice and counter notice that gives Google domain over vast numbers of copyrights from people who can’t afford to fight back in federal court.  And Google cannot have that.

So what is going on that prompted a kind and reasonable fellow like Copyright Alliance chief Keith Kupferschmid to accuse Senator Wyden of bad faith negotiations in the above tweet?   Quick recap:  Remember there’s new legislation working its way through Congress that would establish a new “small claims court” in the US called the CASE Act.  The immensely popular and bipartisan bill introduced by Rep. Hakim Jeffries, passed the House of Representatives on a 410-6 vote.  Yes, that’s right–410-6 in favor of the CASE Act.  (If you’re interested, you can download the CLE materials I put together for a recent bar association panel on the CASE Act.  This has a detailed explanation of holds, copy of the bills, and some other public materials.)

The legislation is now in the Senate which is the land of legislative secret holds and the kind of faux collegiality based on unanimous consent voting outside of the procedures we normally think of, especially floor votes.  At a high level, here’s how it works:  The Senate staff essentially emails around legislation and if no Senator objects to it, it is passed by unanimous consent.  Called “hotlining” this is pretty common in the Senate.  It does not require scheduling floor time and gets things done.

But see what they did there?  If just one–one–senator objects to the hotlined legislation, it all grinds to a halt.  This is called placing a “hold” on the Senate version of a bill.  Which brings us to Senator Ron Wyden.

Screen Shot 2019-11-10 at 12.51.53 AM

Senator Wyden

Senator Wyden has a history of placing holds on copyright legislation.  Most recently, he placed a hold on the Music Modernization Act in order to extract some further punishment for the old guys and dead cats who saw a glimmer of hope in the pre-72 part of the bill (Title II).  In what has become standard practice, the banshees from the Electronic Frontier Foundation and Public Knowledge swing into action with their Fear Uncertainty and Doubt campaigns in an effort to weaken copyright in any way they can get away with.

You know, these guys:

PK Google Shills

EFF Shill

EFF and Public Knowledge treated us to this kind of propaganda:

EFF Phone2Action

PK Phone2Action

Both EFF and Public Knowledge used the Phone2Action tool which features this permission set for Twitter that sure looks like it’s designed to create a bot net:

P2A TWITTTER annotated

So back to Senator Wyden.  EFF and Public Knowledge are not the only ones with ties to Google in particular and Big Tech in general.  Senator Wyden represents Oregon, but he is actually from Palo Alto in what was once called the  Santa Clara Valley, but is now generally called Silicon Valley.  And what does Silicon Valley need that Oregon has?

us-data-center-power-consumption

Huge honking amounts of electricity to run the massive data centers that power Big Tech and allows them to store fuflops of data about you and me.  Remember–it takes about as much electricity to run YouTube as it does to light the city of Cincinnati.  And unlike Teslas, etc., that run on the magical power of cherubic elves jogging on golden flywheels, Google needs the same electricity that comes out of the wall from whatever source it is derived.  Here’s some data on the data centers:

Data Centers

Needless to say, when you are groovier than thou Googlers, this little fact is distasteful and really jacks with your self-image.  Hence, Google seeks out “green” power as part of the mix–and here’s where Oregon comes in.  Courtesy of the taxpayer, i.e., you and me, Oregon happens to have a bunch of hydroelectric power from the Columbia and Snake Rivers Hydroelectric Project  that also extends into British Columbia.

Well, it’s not just courtesy of you and me, it’s also courtesy of the sacred lands given up by Native Americans for The Dalles Dam (Google’s main Oregon data center is located in The Dalles). The Dalles Dam has an interesting history with Oregon’s local Confederated Warm Springs Tribes and the Yakama Indians, too.  Thanks to the ever efficient Army Corps of Engineers and a bunch of federal taxpayer money, the Dalles Dam hoodwinked the tribes into giving up sacred land, which is now at the bottom of the reservoir, but that’s a story for another day.

heres-steam-shooting-out-of-the-dalles-data-center-in-oregon-as-its-cooling-down

According to The Oregonian:

Data centers have become one of Oregon’s biggest industries, with Google, Apple, Facebook and Amazon spending billions of dollars to buy and equip online storage facilities in rural parts of the state. They’re lured primarily by tax savings, which can shave tens of millions of dollars from a server farm’s annual operating cost.

Earlier this week, The Dalles city council and Wasco County commissioners voted to approve a package of “enterprise zone” tax breaks that exempts Google’s buildings and computers from local property taxes. The pact could save Google tens of millions of dollars or more over the 15-year life of the deal.

In exchange, Google will make an up-front payment of $1.2 million to local governments and $800,000 annually after that.

And who was formerly the chair of the Senate Energy & Commerce Committee?  You guessed it.

So back to Senator Wyden and his hold on the CASE Act (I won’t blame you if you’d prefer a shower right about now).  Remember that the CASE Act is the biggest threat to Google’s DMCA-based business model to come along.  So Wyden’s marching orders on the CASE Act is the same as it was on MMA and the same as it’s been for years.  Slow it down, weaken it, let the process grind it to bits if possible or extract so many concessions that it’s toothless or as toothless as it can be.

And that is why a good guy like Keith Kupferschmid is calling out Ron Wyden.  Because there’s #JustOne senator standing in the way of justice.

 

 

 

@musictechsolve: Defiance or Collaboration? The Role of the Presidential Signing Statement in MLC Board Appointments

[Jem Aswad reports in Variety that Concord Music Publishing and Pulse Music Group have announced a joint venture with Concord acquiring a majority stake in Pulse.  Both Concord and Pulse have board seats on the Mechanical Licensing Collective.  This presumably means there will be an opening on the MLC board that will have to be filled.  There is a question as to whether the Librarian of Congress has to approve a new board member.  Chris Castle discusses this issue in this post from last year on MusicTech.Solutions.]

Even though they have a long history, Presidential Signing Statements are not exactly front and center in every civics class or constitutional public law class in America.  You may be hearing about them for the first time now.  But that doesn’t mean they have not been an important part of Constitutional law-making and jurisprudence.

Presidential Signing Statements were first used by President James Monroe in 1822 in the form of a “special message” to the Senate. Presidents Andrew Jackson, John Tyler and Ulysses Grant also issued signing statements, but they were used infrequently until the 20th Century.  Then their use picked up quite a bit starting with President Theodore Roosevelt and continuing to the present day.  So the use of Signing Statements is quite bipartisan.  While Signing Statements may not themselves have any actionable legal effect, they should not be ignored, either.

The MMA Presidential Signing Statement

Not surprisingly, there is a Presidential Signing Statement accompanying the Music Modernization Act (“MMA”) specifically relating to Title I and at that specifically relating to the MLC board appointments.  The relevant language is:

One provision, section 102, authorizes the board of directors of the designated mechanical licensing collective to adopt bylaws for the selection of new directors subsequent to the initial designation of the collective and its directors by the Register of Copyrights and with the approval of the Librarian of Congress (Librarian). Because the directors are inferior officers under the Appointments Clause of the Constitution, the Librarian must approve each subsequent selection of a new director. 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.

Let’s explore why we should care about this guidance.

According to Digital Music News, there have been changes at the Mechanical Licensing Collective, Inc. (“MLCI”) the private non-profit permitted under Title I of the MMA [in addition to the potential opening due to the Concord/Pulse consolidation]:

[I]t appears that two separate MLC board members are jumping ship.  The details are just emerging and remain unconfirmed, though it appears that two members — one representing indie songwriters and the other on the publishing side — are out of the organization.

Because the board composition of MLCI is preemptively set by the U.S. Copyright Act along with many other aspects of MLCI’s operating mandate, the question of replacing board members may be arising sooner than anyone expected.  As MLCI is a creature of statute, it should not be controversial that law-makers play an ongoing role in its governance.

The Copyright Office Weighs In

The Copyright Office addressed board appointments for MLCI in its first request for information for the designation of the Mechanical Licensing Collective (83 CFR 65747, 65750 (December 21, 2018) available at https://www.govinfo.gov/content/pkg/FR-2018-12-21/pdf/2018-27743.pdf):

The MLC board is authorized to adopt bylaws for the selection of new directors subsequent to the initial designation of the MLC. [If these bylaws have been adopted, we haven’t seen any announcements and as far as we know, they have not been posted.  If you know otherwise, please let us know.  The MLC website appears to be down.  UPDATE:  as of 1/13/20 the mechanicallicensingcollective.org now resolves to songconnect.org]

MCLI Down

The Presidential Signing Statement accompanying enactment of the MMA states that directors of the MLC are inferior officers under the Appointments Clause of the Constitution, and that the Librarian of Congress must approve each subsequent selection of a new director. It also suggests that the Register work with the MLC, once designated, to address issues related to board succession.

When you consider that MLCI is, for all practical purposes, a kind of hybrid quasi-governmental organization (or what the Brits might call a “quango”), the stated position of the President, the Librarian of Congress and the Copyright Office should not be surprising.

Why the Controversy?

As the Songwriters Guild of America notes in comments to the Copyright Office in part relating to the Presidential Signing Statement (my emphasis):

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.”

SGA regards it as a significant red flag that the NMPA-MLC submission to the Copyright Office devotes the equivalent of ten full pages of text principally in attempting to refute this governmental oversight authority, and regards the expression of such a position by NMPA/MLC as arguably indicative of an organization more inclined towards opaque, insider management control than one devoted to fairness, transparency and accountability.

So the Presidential Signing Statement to the MMA is obviously of great import given the amount of ink that has been spilled on the subject.  Let’s spill some more.

How might this oversight be given effect and will it be in the public record or an informal process behind closed doors?  Presumably it should be done in the normal course by a cooperative and voluntary collaboration between the MLC and ultimately the Librarian.  Minutes of such collaboration could easily be placed in the Federal Register or some other public record on the Copyright Office website.  Failing that collaboration, it could be done by either the Department of Justice (unlikely) or by individuals (more likely) asking an Article III court to rule on the issue.

Of course, the issue should not delay the Copyright Royalty Judges from proceeding with their assessment determination to fund the MLC pursuant to the controversial voluntary settlement or otherwise [which was released after this original post].  One could imagine an oversight role for the CRJs given that Congress charged them with watching the purse strings and the quantitative implies the qualitative.  The CRJs have until until July 2020 to rule on the initial administrative assessment and appeal seems less likely today given the voluntary settlement and the elimination of any potential objectors.

Since the Title I proponents drafted the bill to require a certain number of board seats to be filled by certain categories of persons approved by Congress in a Madisonian balance of power, the Presidential Signing Statement seems well grounded and furthers the Congressional mandate.

Yet there is this conflict over the Presidential Signing Statement.  What are the implications?

A Page of History is Worth A Volume of Logic

The President’s relationship to legislation is binary—sign it or veto it.  Presidential Signing Statements are historically used as an alternative to the exercise of the President’s veto power and there’s the rub.

Signing Statements effectively give the President the last word on legislation as the President signs a bill into law.   Two competing policies are at work in Presidential Signing Statements—the veto power (set forth in the presentment clause, Article I, Sec. 7, clause 2), and the separation of powers. 

Unlike some governors, the President does not enjoy the “line item veto” which permits an executive to blue pencil the bits she doesn’t like in legislation presented for signature.  (But they tried–Line Item Veto Act ruled unconstitutional violation of presentment clause in Clinton v. City of New York, 524 U.S. 417 (1998).) The President can’t rewrite the laws passed by Congress, but must veto the bill altogether.  Attempting to both reject a provision of a new law as unconstitutional, announce the President’s intention not to enforce that provision AND sign the bill without vetoing it is where presidents typically run into trouble.

Broadly speaking, Presidential Signing Statements can either be a President’s controversial objection to a bill or prospective interpretive guidance.  Signing Statements that create controversy are usually a refusal by the President to enforce the law the President just signed because the President doesn’t like it but doesn’t want to veto it.  Or to declare that the President thinks the law is unconstitutional and will not enforce it for that reason—but signed it anyway.

The President can also use the Signing Statement to define or interpret a key term in legislation in a particular way that benefits the President’s policy goals or political allies.  President Truman, for example, interpreted a statutory definition in a way that benefited organized labor which was later enforced by courts in line with the Signing Statement.  President Carter used funds for the benefit of Vietnam resisters in defiance of Congress, but courts later upheld the practice—in cases defended by the Carter Justice Department.  The practice of using Presidential Signing Statements is now routine and has been criticized to no avail for every administration in the 21st Century including Bush II, Obama and now Trump.

Since the 1980s, it has become common for Presidents to issue dozens if not hundreds of Presidential Signing Statements during their Administration.  So it should come as no surprise if the Department of Justice drafted up the statement for the MMA prior to it being presented to the President to be signed into law.  (See the American Presidency Project archives https://www.presidency.ucsb.edu/documents/presidential-documents-archive-guidebook/presidential-signing-statements-hoover-1929-obama)

Defiance or Collaboration?

What does this mean for the MMA?  The President certainly did not call out the statutorily required board membership of the MLC as an unconstitutional overreach that he would not enforce.  To the contrary, the MMA Signing Statement expresses the President’s desire that the legislation comply with the requirements of the Constitution.

Moreover,  the MMA Presidential Signing Statement is not a declaration about what the President will or won’t enforce but rather interprets a particular section of a long and winding piece of legislation.  (Title I principally amended Section 115 of the Copyright Act—now longer than the entire 1909 Copyright Act.)  This kind of interpretation seems to be consistent with the practices of prior Presidents of both parties, not an end-run around either the veto power or separation of powers.

Failing to acknowledge the admonition of the signing statement would seem an unnecessary collision both with long-standing jurisprudence and with a sensible recommendation from the President of how the Librarian, the Copyright Office and the Justice Department expect to approach the issue in collaboration with the MLCI.  That’s possibly why the Copyright Office restated the Signing Statement in the RFP.

Title I of the MMA is a highly technical amendment to a highly technical statute.  A little interpretive guidance is probably a good thing.  Collaboration certainly makes more sense than defiance.

Future of Music Coalition Suggestions to US Copyright Office on MLC Oversight Regulations

In our continuing review of comments on the Mechanical Licensing Collective, the Future of Music Coalition’s filing is an instructive read.  FOMC has put its finger on two core issues for Copyright Office regulations–the importance of trust in the MLC and the cost to independent publishers and songwriters of handing over all their data to the MLC for the celestial database.

The question of who will pay for these data costs is one of the issues that’s most confusing about the MLC’s messaging as well as the messaging from many groups who encouraged songwriters to support both the blanket compulsory and the “industry consensus” MLC now in control.  Originally, we were all told that “the services will pay for it,” and indeed the services are paying millions for something.  So far, however, we have not seen any budget allocated to compensating the songwriters who will be contributing data at their own expense to MLC’s core asset.

Although FOMC didn’t bring this up directly, they certainly got that thought process going.  If a publisher already has invested substantial resources in cleaning and normalizing their data, participating in MLC may not be a high cost of admission.  But if a publisher has invested in data that is sufficient for them to operate before MMA (say Excel spreadsheets), but is not reasonably exportable to MLC, then the publisher’s choice is find the money to cover these transaction costs or don’t participate. And not participating leads to the black box.

In a streaming economy where per-stream royalties start three or four decimal places to the right if  you’re lucky, the cost of the ticket may well exceed the revenue.  That will weaken the system, so those who benefit from the millions invested in MLC should arguably pay for those transaction costs.

We should also all be mindful of the CISAC and BIEM comment and remember that non-US songwriters could be in a similar position or may simply not be aware that they have to comply with the formalities of registering with the MLC (possibly separately from their own home country collecting society) or even separate from registering for copyright in the US (which will be some but not all non-US songwriters by any stretch).  Even if songwriters don’t register for copyright with the Copyright Office they will still have to register their works with the MLC unless there’s some reliable work around that presents itself in the future.

With that in mind, this passage from the FOMC comment is particularly illuminating:

The success of the new mechanical royalty system created by MMA is dependent on broad participation, and participation is dependent on trust. Unfortunately, cultivating trust can be challenging in the music industries, where old stories of exploitation and bureaucratic failure are plentiful. Different stakeholders may have vastly different levels of legal sophistication, technical skill, and access to resources.  The Copyright Office’s task in its rulemakings is to optimize for trust and accountability for all parties, and should give special consideration to the needs of creators who might otherwise lack leverage. This outcome would not be to the sole benefit of creators, but would benefit all stakeholders. The more accountability, detailed guidance, and ongoing oversight the Office empowers itself to offer the MLC, the more successful the entire endeavor will be.

You should really spend a little time reading the FOMC submission.  It’s not that long but filled with nuggets.

What comes from the Copyright Office in the regulations governing the MLC may be the most important part of this entire process given the flawed parts and omissions from MMA.

David Lowery’s Suggestions to the Copyright Office for Regulation of the Mechanical Licensing Collective Part 4

The US Copyright Office solicited comments from the public about the operations of the Mechanical Licensing Collective.  The 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.

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.

David Lowery did not file initial comments but as he notes, developments made him feel compelled to speak up in the reply comments.  We’re going to post his reply comments in four parts, and then we’ll post other commenters who we think made really good points (like CISAC and BIEM among others).  (If you want to skip ahead and read the entire comment, you can download it here.)  This is Part 4 of four parts.

Comments of David C. Lowery, Notice of Inquiry for Blanket License Implementation Regulations Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018

Additional MLC Oversight: Transparency and Financial Disclosure

There is little financial disclosure required of the MLC or the DLC. As far as DLC is concerned, I expect they will represent the interests of the services. They are also paying the money for MLC which in a way is itself an inherent conflict but is under the oversight of the Copyright Royalty Judges. For the moment, DLC does not appear to be involved in the MLC operations or decision-making. Time may reveal a need to examine this relationship more closely for financial disclosures.

However, the MLC is mandated to engage in many operations fraught with moral hazard, not the least of which is matching and the black box distributions. The MLC has already demonstrated that it has the ability to pick the least appropriate vendors for inexplicable reasons other than the past ownership of HFA by the National Music Publishers Association.

This past ownership creates a special disclosure situation regarding the selection of HFA as a vendor given how long Title I had been in the works (the rumored “SIRA II”). Was the sale of HFA conditioned on HFA becoming the principle vendor of the MLC (like HFA was to be the “General Designated Agent” in SIRA I)? Was Blackstone’s withdrawal of opposition to MMA in the Senate conditioned upon some benefit flowing to HFA? Has the vendor selection process been the kabuki dance it appears to be? As my friend and co-amici Guy Forsyth wrote, “Americans are freedom loving people and nothing says freedom like getting away with it.” Did they get away with it? If the Copyright Office doesn’t force disclosure, we’ll never know unless the issue gets litigated in one of the pending lawsuits against Spotify—and isn’t redacted.

It only seems reasonable that the MLC should disclose any incentives, payments or other benefits received by its board members, non-voting members (DiMA, NMPA, NSAI or SONA for example), officers and other key employees from any person or entity MLC does business with. These benefits should include payments of the administrative assessment, real estate transactions paid for by the assessment, or shares of stock or units of Ether granted to anyone in the supply chain. This kind of anti-payola affidavit is required of various consultants in the music business already so there seems to be no reason why it should not be required for persons of influence at the MLC. And, of course, all such affidavits or disclosures should be part of the public record so that everyone from songwriters to Members of Congress should be able to have a clear picture of who is involved with MLC.

This will be particularly applicable to any payments from the black box which is truly other people’s money. Any proposed payments of the black box should be itemized, published online in an easy to read format prior to being distributed and certified by an independent CPA that is not related to MLC or any board member or vendor. This disclosure may help reduce the inevitable lawsuits. In fact, it would be best if any CPA undertaking certification work for MLC should agree in advance that they would do no other work for the MLC related parties for a significant period of time, say five years.

The “interim application of accrued royalties” is another clause that is fraught with conflicts of interest. Respectfully, the Copyright Office should clarify that MLC board members act as fiduciaries in their decisions to take money from the black box to meet the MLC’s expenses in the case of a shortfall from the administrative assessment. If they’re not fiduciaries, an explanation would be helpful.

In fact, the entire clause relating to the “interim application of accrued royalties” is itself vague and ambiguous. Consider the language:

In the event that the administrative assessment, together with any funding from voluntary contributions as provided in subparagraphs (A) and (B), is inadequate to cover current collective total costs, the collective, with approval of its board of directors, may apply unclaimed accrued royalties on an interim basis to defray such costs, subject to future reimbursement of such royalties from future collections of the assessment.

This paragraph is, in my judgment, one of the most important yet least discussed clauses in the entirety of Title I. Absent implementing rules to the contrary, the clause allows MLC to effectively write itself interest free and nonrecourse loans from other people’s money to cover the costs of a budget that MLC itself determines at a burn rate solely in the control of MLC—currently with no oversight by anyone.

The clause raises a number of questions about the meaning of the statutory language which the Congress likely intended to be clarified in regulations regarding the spending of other people’s money by the MLC. In particular. terms in the statutory language that must be known in order to determine what sums are the “costs” concerned, when are they determined, and what happens if the loan once taken is never repaid. (Which raises income tax issues if nothing else.)

The statutory language also leaves to regulations what happens if the songwriters whose monies are taken from the black box and spent by MLC are later identified because they come forward or due to matching efforts of the DLC or the MLC.

Are those songwriters supposed to wait to be paid from “future collections of the assessment,” if ever? Which future collections? The next assessment after those songwriters are identified? Or another one some time in the future?

Are they to be paid in the normal course at the next accounting period after becoming identified? Immediately upon being identified?

And most importantly perhaps, how will anyone outside of the MLC know this loan is occurring? The mere fact that a board of directors thinks it’s a good idea to avoid themselves having to make voluntary contributions to the MLC’s operations by writing themselves an interest free non-recourse loan from monies they hold in trust (or should hold in trust) is a terrible position to put on board members voting against the loan.

I would respectfully suggest that this entire clause has no place in legislation that was sold as a great boon for songwriters. If it must be in the law, then the Copyright Office has a golden opportunity to shed sunlight on another mysterious operation of the MLC.
I suggest several areas of mandatory disclosure. First, the balance of the black box should be public and prominently posted on a monthly basis to the MLC’s website. Songwriters should be able to search for their titles and determine how much is being held. SoundExchange currently has this feature for the public as do other societies around the world.

The black box should be held in a true escrow account by an escrow agent (such as an unrelated bank) that has clear instructions in regulations as to how and when such funds are to be disbursed, either as a loan or royalty payment.

If the board of MLC decides to write itself a loan from these funds, they should not be able to use the black box as a piggy bank, but rather should borrow against identified funds based on available metadata so that repayment can be accomplished efficiently.
For example, if Songwriter X can look up on the MLC’s website that the MLC board borrowed money for songs A, B and C that were unmatched at the time of the loan, then if Songwriter X is later identified, she can demand payment of her royalties from MLC which the MLC should be required to pay from its current accounts and not take from future black box payments.

Failing to require payment from fresh cash will create an endlessly iterative process by which MLC borrows from Peter to pay Paul, using old money to pay new obligations.
Finally, all these transactions should be well documented and those documents should be published on the MLC website. For example, the statute requires board “approval” to initiate the loan. That approval should take the form of a recorded board vote with minutes to be published on the MLC website, or better yet in the Federal Register. The loan should be documented in the form of a promissory note to the escrow agent. It should also be clear that the MLC board has a fiduciary duty to the songwriters and publishers whose money it is borrowing that is separate from the board’s safe harbor elsewhere in Title I.

Having just gone through the PledgeMusic debacle, I am sensitized more than ever to companies that go insolvent while handling the money of artists with the result that the artists never get paid. If the MLC cannot meet its obligations and requires “interim” loans from the black box, how is that not the case of a company operating while insolvent? Why should the officers and directors of MLC enjoy any lower standard of care or responsibility than they would if they were operating any other company while insolvent?

Surely this was not the intent of Congress.

Finally, I note that the budget proposed by the MLC to the DLC was less than the administrative assessment agreed to in the CRB settlement. Respectfully, the Copyright Office ought to make clear that this shortfall does not trigger the MLC’s ability to take an “interim” loan in the amount of the shortfall. This issue highlights another point requiring clarification—at what point is a shortfall determined? It seems that it should be at a time the shortfall occurs following investigation into why it occurred by an inspector general-type person (such as the Inspector General of the Library of Congress).

The MLC knows how much it’s got in its rather rich kitty to spend on all its various activities. If it also knows that if it goes over budget it can write itself interest free loans from the black box based on its own internal decision and authority, what incentive is there to stay on budget?

Additional MLC Oversight: Transparency and Songwriter Ombudsman

While Congress and the Copyright Office theoretically retain oversight over the MLC, this is of cold comfort to songwriters who are run over by MLC, its policies and its vendors. The vast unmatched problem is the most obvious foreseeable outcome where songwriters need a safety valve, but there are other possibilities.

For example, if the MLC continues HFA’s sad history of simply failing to pay songwriters, it’s just not adequate to say that songwriters can audit MLC or sue. Songwriters should not have to incur even more costs or engage in the labyrinthine process of individual or class action lawsuits against an entity funded by the largest corporations in the world.

The only real leverage that songwriters have over MLC is to persuade the Copyright Office not to re-designate the incumbent. In order for that to be a realistic threat, the Copyright Office regulations should provide for a feedback loop that songwriters can avail themselves of that the Copyright Office must take into account when determining its re-designation. Such complaints must be included in the Copyright Office’s oversight report to Congress. As such a practice is essentially the Copyright Office setting a policy or regulating itself, I see no reason why that practice cannot be set forth in regulations.

However, the Copyright Office is in an ideal position to create an ombudsman-type position with oversight of the entire MLC/DLC process. Such a role would allow the world’s songwriters an immediate outlet for surfacing negligence by MLC. By preserving anonymity of those complaining, any songwriter—whether or not affiliated with MLC—could have an outlet to report any objectionable behavior while being protected along the lines of the Whistleblower Protection Act.

The ombudsman should be completely unrelated to the incestuous practices of MLC and HFA, should be a paid position deducted from the millions in MLC’s rich operating budget, and should be meaningfully consulted in any re-designation.

Creating an ombudsman role would benefit the entire system by maintaining a watchdog and whistleblower role that would help keep the system honest.

Additional MLC Oversight: MLC and DLC Database Conflict of Interest Policy

I would also respectfully call the Copyright Office’s attention to the inherent conflicts between MLC and its vendor HFA in terms of reselling data HFA acquires by virtue of its role as MLCvendor. If the Copyright Office does not prohibit HFA from selling for other commercial purposes the data it acquires through its engagement by MLC to facilitate the compulsory blanket license, the Congress will have just handed HFA a near insurmountable advantage over its competitors. Remember there are other licenses like “micro sync” licenses that are outside of the compulsory mechanical license. Currently there is robust competition and innovation in this market segment, but without this prohibition HFA would crush its young competitors.

The same could be said of ConsenSys, which seems to be desperately seeking use cases for its Ether cryptocurrency. This creates an odd set of incentives for an MLC vendor, not to mention a need for disclosure by the MLC of any stock grants or Ether transfers.

Songwriters are compelled to do business with MLC despite bitter complaints about the imbalance in favor of major publishers in its governance. Songwriters are also compelled to do business with MLC despite bitter complaints about HFA due to what can be described as a bait and switch where the MLC pushed out a lot of hope only to go back to business as usual with long-time cronies.

This cannot be what Congress had in mind, and is even greater evidence for why the Copyright Office should require MLC candidates to fully disclose their vendors and their relationship with their vendors before designation.

Respectfully, any data vendor of the MLC should not be allowed to leverage their privileged role to private benefit after being paid absurd amounts of money to fail upwards.

As Madison said, we’re not angels. But songwriters rely on the Copyright Office to be our better angels.

Thank you for providing this opportunity to discuss these important issues.

Sincerely,
David C. Lowery

David Lowery’s Suggestions to the Copyright Office for Regulation of the Mechanical Licensing Collective Part 3

The US Copyright Office solicited comments from the public about the operations of the Mechanical Licensing Collective.  The 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.

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.

David Lowery did not file initial comments but as he notes, developments made him feel compelled to speak up in the reply comments.  We’re going to post his reply comments in four parts, and then we’ll post other commenters who we think made really good points (like CISAC and BIEM among others).  (If you want to skip ahead and read the entire comment, you can download it here.)  This is Part 3 of four parts.

Comments of David C. Lowery, Notice of Inquiry for Blanket License Implementation Regulations Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018

MLC’s Reporting and Failure to Account

This section responds to the Office’s question regarding MLC’s Payments and Statements of Account.

As an overall comment, the MLC should be required to publicly post at least an aggregated version of all information it receives from DMPs supporting the calculation of royalties (transactions, TCC, deductions from gross, etc.). It will be impossible for songwriters to conduct a desktop audit of their statements with their accountants if key elements of the calculations are missing. Respectfully, the Copyright Office really needs to understand how many times we have seen this movie and how we definitely know how it ends.

This is the old hide the ball trick where royalty statements include everything except the one key piece of information needed to duplicate the reported calculations. Again, let’s not have meet the new boss, worse than the old boss. The Copyright Office has a golden opportunity to get this right—so please, please take heed. It will save a lot of time and litigation.

For example, the MLC is already saying things like this:

Accordingly, the MLC believes that any regulations obligating the MLC to distribute royalty reports and payments to copyright owners on a monthly basis should not require that such reports and payments be for a particular royalty period, which is at least in part outside of the MLC’s control.

Actually, this is wrong. If the MLC reports do not designate which period the payment corresponds to, there will be no way for songwriters to know what they are being paid for. This boils down to receiving a statement that says, here’s some money, or worse, no money for you. If there is no explanation of when the royalties were earned or last paid on a service-by-service basis, there is no way for songwriters to know if any service is current.

Plus, the Congress gave the MLC fearsome powers over DMPs and songwriters. If services are late, we expect MLC to chase them and chase them hard. They wanted this job, and now they have it. If songwriters have to wait until MLC get around to auditing trillions of transactions to know a service is late paying, unpaid money is as good as gone even for matched works.

As drafted, Title I places great emphasis on the user of the blanket license’s obligations to account and pay royalties but there is no corollary obligation for MLC. Indeed, it seems that the MLC is already backtracking on timely payments by lowering expectations of timely DMP payments. The DMP has a lot to lose if they are not timely with payments and statements.

There is virtually no downside for the MLC. I respectfully suggest that there be some teeth put into the MLC’s failure to account, for both the “known knowns” and the “known unknowns,” that tracks the penalties on the license user.

It does not appear that sufficient attention has been paid to the MMA’s major change in the compulsory licensing structure—the insertion of another gatekeeper into the stream of payments, a gatekeeper that has selected the former affiliate of one of its principal promoters with a known and well litigated history of failures for the very functions it is to take on with a Congressional mandate.

Incredibly, no one has included language addressing what happens if the MLC defaults. Auditing years after the fact is not going to get it done. In fact, the audit language in Title I is so antiquated that it could easily have come from a 1980s record deal. (Not to mention the meaningless and expensive requirement of a CPA to conduct royalty audits.) The audit language is simply not fit for purpose in a world of trillions of individual transactions rather than hundreds of millions of CDs. Songwriters forced to use the compulsory license need a much more immediate and much toothier remedy against the government’s MLC monopoly. In other words, the Music Modernization Act already needs to be modernized and the Copyright Office has a chance to do it—but the clock is ticking.

Language could be adopted in regulations that mirrors the statutory language for default by users of the blanket license, substituting the copyright owner for the MLC and the MLC for the digital music provider. For example:

“If the copyright owner does not receive the monthly payment and the monthly and annual statements of account from the MLC when due for reasons within the control of the MLC, the owner may give written notice to the MLC, unless the default is remedied not later than 30 days after the date on which the notice is sent, the MLC’s ability to administer the compulsory license for such copyright owner will be automatically terminated. “

Because the Copyright Office is charged with implementing regulations under a broad statutory grant, it seems that this loose end could be remedied in regulations without need of an amendment to Title I, particularly because the failure to include such a provision benefits those who controlled the pen for the drafting of Title I.

The Copyright Office should also take into account any failures to account when reviewing the re-designation of MLCI at the five year review mark.

Additional MLC Oversight: FOIA

Continuing the theme of sunlight as the best remedy, please consider the relationship of the Freedom of Information Act and the MLC. The Copyright Office complies with Freedom of Information Act requests (FOIA). The public interest would be served in having access to all correspondence and internal materials not subject to a FOIA exemption that relate to Title I of the Music Modernization Act as well as the “address unknown” NOI process that preceded and contributed to it.

Availability of these materials is particularly relevant given the lack of transparency required of MLC and the DLC (odd redactions in CRB filings for the administrative assessment is but one example) and the general mystery of why HFA was selected by MLC given the history of HFA with NMPA and the legislative process.

Rather than wait for a FOIA request for these materials, the Copyright Office should voluntarily make these materials available on Copyright.gov. I would recommend this process be repeated annually if not more frequently.

To be continued in Part 4

David Lowery’s Suggestions to the Copyright Office for Regulation of the Mechanical Licensing Collective Part 2

The US Copyright Office solicited comments from the public about the operations of the Mechanical Licensing Collective.  The 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.

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.

David Lowery did not file initial comments but as he notes, developments made him feel compelled to speak up in the reply comments.  We’re going to post his reply comments in four parts, and then we’ll post other commenters who we think made really good points (like CISAC and BIEM among others).  (If you want to skip ahead and read the entire comment, you can download it here.)  This is Part 2 of four parts.

Comments of David C. Lowery, Notice of Inquiry for Blanket License Implementation Regulations Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018

Failure is Not an Option

Given my perspective of HFA’s horrendous track record of reporting to independent songwriters and publishers of both Anglo-American and all foreign language repertoire, the Copyright Office really must demand public oversight of the MLC in the crucial run-up to the License Availability Date.

We don’t want to find out on January 2, 2021 that the thing doesn’t work and get either a cobbled together manual accounting statement or no accounting statement or payment at all—and consequentially an exponential increase in the unmatched “black box” monies. I cannot imagine that the DLC wants this result, either.

The Congress did not mandate that the MLC could send out defective or placeholder accounting statements with no or low royalty payments. Unless the Copyright Office regulations holds their feet to the fire, this is entirely possible particularly if there is no downside for MLC. It is also important to keep in mind that the major publishers receive direct accountings from the services and will not use the MLC in all likelihood. These would be the same major publishers on the MLC board.

Do you think that the MLC is likely to punish itself for failing to do its job, especially for unrepresented songwriters or non-Anglo-American repertoire? I don’t. If the unmatched royalties are liquidated in the usual fashion they will be paid out by market share to the biggest publishers. Yes, whether intended or not there is a known perverse financial incentive for the biggest publishers to hope the MLC does a poor job. A large unmatched royalties pool will likely benefit big publishers. In theory the Unmatched Royalties Oversight Committee is supposed to look after this and counterbalance this mismatched incentive structure. However, it appears there is no funding allocated to the UROC. Thus, it is not clear how this oversight will be performed.

Respectfully, the Copyright Office should consider that its role is about to change—going forward the Office has been charged by Congress with an oversight responsibility for the entire process. If I end up being correct—that MLC will not only will fail to launch on the License Availability Date but it will be in total meltdown—the Congress must be able to know of any failures well in advance to be able to apply the pressure through saving legislation of some kind, or to at least have some notice there is a serious problem.

It is well within the Office’s current regulatory mandate to specify the deliverables the MLC must make public at key dates leading to launch for 1/1/21. Because there will be a strong tendency caused by extreme moral hazard for the MLC to view its operations through rose colored glasses, these deliverables require a maximum of public disclosure and peer review in order to be both credible and informative.

Here are some considerations the Copyright Office may wish to take into account:

(a) Systems should be publicly disclosed for peer review and comment on rolling basis starting immediately and continuing on a monthly basis thereafter until the launch, and then after the launch to determine how effective the systems work. If MLC fails operational milestones, then detailed explanation must be made in public with a plan to get back on track.

(b) There is no competition for MLC given its quango status and Congressional exclusivity, so no need for secrecy or redactions in its filings.

(c) Systems tests and certifications should be conducted on no less than monthly basis starting immediately with milestones to completion. These milestones and their results should be published in the Federal Register and on Copyright.gov and also circulated to Hill staff.

(d) If MLC is not fully operational by 9/30/20 then both the Copyright Office and the MLC leadership should report to Congress on why and critical path to full operational functionality. Because of the unprecedented nature of the MLC enterprise, “full operational functionality” may be a moving target, but MLC should not be able to set a low bar that results in only the rich people getting paid.

To be continued in Part 3

 

David Lowery’s Suggestions to the Copyright Office for Regulation of the Mechanical Licensing Collective Part 1

The US Copyright Office solicited comments from the public about the operations of the Mechanical Licensing Collective.  The 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.

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.

David Lowery did not file initial comments but as he notes, developments made him feel compelled to speak up in the reply comments.  We’re going to post his reply comments in four parts, and then we’ll post other commenters who we think made really good points (like CISAC and BIEM among others).  (If you want to skip ahead and read the entire comment, you can download it here.)

Comments of David C. Lowery, Notice of Inquiry for Blanket License Implementation Regulations Issued by the United States Copyright Office Concerning the Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018

I respectfully submit these comments in response to the Copyright Office’s September 24, 2019 Notification of Inquiry and request for comments to assist the Office in drafting regulations relating to the implementation of certain parts of Title I of the Music Modernization Act.

Most relevantly for these purposes, I am an American songwriter, music publisher and member of the bands Cracker and Camper van Beethoven. I teach music business courses at the Terry College of Business at the University of Georgia and am co-author with Steven Winogradsky of the latest edition of the book “Music Publishing: The Complete Guide.” I also founded and am the principal writer of the blog The Trichordist (www.thetrichordist.com). I have testified before the House Judiciary Committee and am active in public policy discussions of the copyright law. I was briefly a member of the Mechanical Licensing Collective’s statutory unmatched funds committee, but resigned.

It was not my intention to respond to the Copyright Office request for comments on these regulations. However, several recent events changed my mind: The MLC’s selection of the Harry Fox Agency (formerly owned by NMPA) as its principal vendor; the selection of ConsenSys apparently as the cryptocurrency vendor of MLC; and the adoption by the Copyright Royalty Judges of the voluntary settlement of the initial administrative assessment after allowing the Songwriters Guild of America to be hounded out of the proceeding by the MLC while ignoring the many helpful points and suggestions made by SGA while it was in the proceeding including in its withdrawal papers.

These events range from the bizarre to the suspicious but lead me to the same conclusion—this process needs a whole lot of sunlight.

I found this language in MLC’s comments particularly troubling:

[G]iven that the MLC’s policies and procedures are still being developed with the [License Availability Date] still over one year away, the MLC believes that regulations concerning the Office’s oversight role may be premature at this time. The MLC believes that the promulgation of regulations concerning the Office’s role in overseeing and regulating the MLC’s operations and policies would be more fruitful once the MLC has fully developed its policies and procedures and is able to provide them to the Office for review.

That is exactly backwards. While the MLC may think oversight is not a fit until they decide how they wish to govern themselves with the power of the compulsory license and the biggest corporations in history behind them, the Copyright Office shouldn’t delay establishing the rules of the road.

The MLC is rapidly becoming a self-licking ice cream cone wrapped in cronyism inside a cryptocurrency. The Copyright Office is in a position to turn this erosion of MLC’s statutory mission back to the light and away from “new boss-ism” as in “meet the new boss, worse than the old boss.”

It seems impossible to ignore the fact that the MLC quango has announced their selection of vendors in a news dump over the Thanksgiving holiday. Having selected the Harry Fox Agency and a cryptocurrency outfit as best of breed vendors, I would expect both the substance and the process of this selection to be fair game for a comment about the MLC, its operations and, of course, its management.

I am reminded of James Madison’s warning in Federalist 51:

If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.

Notices of Blanket and Nonblanket Activity

The Office’s request for comments on notices must be seen in light of the subsequent selection of HFA by the MLC. The implications from the MLC being permitted to select their cronies at HFA as a vendor comes up in many places in the Office’s request for comments. In terms of notices, I assume that HFA will be permitted to continue with its business practice of representing both copyright owners and digital music services, most specifically Spotify. In other words, HFA will be on both sides of the same transaction, a clear moral hazard and conflict of interest. Further if HFA is going to continue to collect money from services and pay songwriters, what is the point of inserting a $60 million-dollar layer of MLC bureaucracy in the middle of this transaction? In economic terms this appears to be pure “deadweight loss.”

The MMA clearly envisioned that the establishment of a single MLC would create market efficiency in music licensing. The selection of HFA as a vendor makes a mockery of the MMA by making the market less efficient, and essentially turns the MLC into a parasitic middleman. This is an “own goal.”

At the outset, I must respectfully say that I have first-hand experience with the HFA work product in two different class actions against HFA tech clients. In addition to my two class actions, there have been seven significant lawsuits that I am aware of brought against Spotify, an HFA client. All these lawsuits have similar facts—they were brought by (1) independent publishers that (2) opted out of the “settlement” between Spotify and the National Music Publishers Association and (3) whose claims were summarily ignored until they sued.

In my case, after I sued Spotify I received non-compliant NOIs from HFA (as Spotify’s agent) relating to songs at issue in the case that were backdated approximately five years. These notices were sent from an address that HFA would not have until several years after the back date and that were signed by an officer of Spotify who had left his job over a year before the mailing date. I don’t know what kind of game they were playing—perhaps trying to trick me or my business manager into cashing a paltry check they would argue indicated my acceptance of their license. It didn’t work, and the rest is history.

I have nothing personal against HFA and I actually placed part of my catalog with HFA for administration to see how they would do. At this writing, the jury is out.

I can also not ignore the fact that the entire MLC selection process appears from the outside to be a giant Kabuki dance to cover up business as usual with the reunion of the NMPA with the HFA unit they just sold off. I think it’s fair to say that I’m not alone in raising these questions, which relate directly to the Copyright Office’s questions and the initial round of comments from several commenters.

Public Test of Operability

The following responds to the Office’s questions about usage and reporting requirements.

The MLC announced with no oversight or explanation that is has selected HFA as one of its principal vendors. Because the MLC dragged their heels on disclosing who their vendors would be, the Copyright Office was forced to designate the MLC before the MLC announced its vendors. The Office was therefore largely buying a pig in a poke—as were all songwriters in the history of music. The Office (and the Congress) unintentionally empowered the MLC to essentially do whatever it wanted to fulfill its statutory mandate. The MLC chose HFA in what may be the least suspenseful announcement of the decade.

Respectfully, I think that when the Copyright Office reflects on that decision in a few years, it will be shown to have been a mistake or I will be shown to have been a goat. If HFA works out, I will be happy to be a goat. But if it doesn’t, the bill for both these decisions will come due—and the services won’t be paying that one. Self-published songwriters will be paying with missing or miscalculated royalties.

There have been many notable lawsuits brought against services since I filed my class action in 2015. Some say that these cases drove the services to accept the Title I blanket license due to the retroactive safe harbor. All of these cases have two things in common: They were brought by independent songwriters or publishers and HFA was the backend matching and royalty accounting service in every case. So I would say it differently. What drove the services to take the safe harbor deal (which was great for them) was not the songwriters, it was HFA’s repeated inability to get the job done.

Not only was HFA not punished for its failures, it has been rewarded. This is curious. And the MLC is now supposed to accomplish in 12 months or less that which the industry has been unable to accomplish in decades. Using HFA. Which makes it all very mysterious to people like me.

One way to solve that mystery would be for the MLC to disclose the actual selection criteria and internal recommendations to support the supposed “unanimous” selection of HFA. Was this the work of a dedicated group of likeminded people or was it based on objective criteria? If, for example, MLC were to have given HFA and MRI a problem to solve, I would like to know exactly what that problem is so that I could assign the solution of the problem set as an academic project. I would be happy to publish the results, as could any other academic wishing to conduct such peer review.

Unfortunately, I seriously doubt that MLC has any intention of being that transparent unless they are required to do so by regulations. Which leads one to ask, why so secretive?

To be continued in Part 2

 

Press Release: Songwriters Guild Of America Files Reply Comments With Us Copyright Office Again Urging Stringent Oversight Of Music Licensing Collective

We wanted to post this press release from the Songwriters Guild regarding its reply comments to the Copyright Office public consultation on regulating the Mechanical Licensing Collective.

The Guild generously raises some very helpful issues and also is concerned about David’s departure from the MLC.  Unfortunately, the Guild’s comment is still not available on the Regulations.gov website, so Artist Rights Watch linked to a copy of it.  We’re not quite sure why the Copyright Office hasn’t gotten around to posting the Guild’s comment (or David’s yet for that matter) along with the 32 others they have posted before the Christmas break, but we’ll keep you informed on their progress.  Hopefully that’s just an oversight that we noticed because we’re back to work now.

Here’s the press release.

New York, December 20, 2019–  The Songwriters Guild of America (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, has submitted a series of comments and requests to the US Copyright Office regarding oversight of the newly-formed Mechanical Licensing Collective (MLC).  Its comments were filed on December 20, 2019 at the invitation of the Register of Copyrights, pursuant to the duties assigned to the Librarian of Congress and the Copyright Office under the Music Modernization Act of 2018 (MMA).  SGA’s comment is here.

“Due to the inherent and sometimes unavoidable conflicts of interest surrounding the formation and activities of the MLC under the law,” states SGA president and songwriter Rick Carnes, “the music creator community believes that the highest degree of scrutiny must be applied by the US Government in overseeing MLC activities.  Hundreds of millions of dollars in songwriter and composer royalties will be at stake on an annual basis, and to protect us from conflicts of interest within the MLC in regard to such issues as matching currently unclaimed royalties to their proper owners, Congress wisely placed the responsibility of evaluating MLC  activities for fairness, transparency and accuracy to the US Copyright Office.  SGA fully supports the efforts of the Register of Copyrights to formulate regulations that protect the rights of music creators as Congress intends, and will work with the Office to help ensure it is enabled to vigorously and effectively perform its oversight functions.”

Specifically, the comments filed by SGA include requests for regulations governing the MLC that mandate:

  1. Recognition of the obvious and overwhelming necessity for inclusion of songwriter and composer information in the MLC Musical Works Database;
  2. Adoption of internal MLC rules requiring adherence by board and committee members to strict conflict of interest policies;
  3. Inclusion in the MLC by-laws of a process for replacing music creator board and committee members that includes meaningful music creator community participation in the selection process without music publisher interference, and review and approval by the USCO and the Librarian of Congress of all such music creator candidates and appointees. (“To do otherwise,” states Carnes, “would be akin to empowering the wolves to select the watchdogs that purportedly guard the sheep”);
  4. The immediate compilation, calculation and publication of the aggregate amounts of unmatched royalties being held or already transferred to the MLC by digital music distributors, and to update such information on an ongoing basis;
  5. The allocation of sufficient funds specifically enumerated in the MLC budget to be utilized solely for mounting a bona fide, global effort to identify unmatched royalties.

SGA also applauded the recent appointment of Maria Strong to serve as Acting US Register of Copyrights, and urged the Librarian of Congress to select as permanent Register a person  especially knowledgeable about and sympathetic to the rights and needs of the creator and author community, and without conflicts of interest in regard to prior affiliation with digital distributors, big tech, and/or corporate copyright owners (and their respective trade associations).

Finally, SGA suggested that the Copyright Office exercise diligent oversight in reviewing certain recent MLC initiatives, including the awarding of contracts to potentially controversial third parties such as The Harry Fox Agency and ConsenSys, and in investigating the sudden withdrawal from participation on the MLC  Unclaimed Royalties Oversight Committee of songwriter, recording artist and music creator rights activist David Lowery.

“SGA’s intended role in this process,” concludes Carnes “is to serve as an independent monitor of MLC activities, working with the US Copyright Office and other US Government agencies in ensuring that the rights and interests of music creators under the MMA are fully observed.  We have operated as an organization for over 85 years with a two-word mission statement: Protect Songwriters. And that is exactly what we intend to do in this case.”

 

 

Happy Holidays and David’s Copyright Office Comments

We wanted to wish all our readers happy holidays and thank you again for supporting the Trichordist!

As some of you may know, the Copyright Office comment period for MLC regulations just closed.  We will be posting David’s comments and selected other commenters here for some holiday reading starting tomorrow.

We want to thank the Society of Composers and Lyricists for mentioning David in their comments.

SLC NOI Reply Comments

 

RIP Scott Timberg and GoFundMe Page

We were devastated to hear of the death of Scott Timberg, a good friend of the artist rights movement and gifted writer.  His most recent work the definitive Culture Crash: The Killing of the Creative Class will be a vital resource for advocates for many years to come.

A GoFundMe memorial and college fund page was set up by David Dailey for Scott’s wife and son.  We urge everyone to contribute something however small.