Black Box Hunting: The Songwriters Guild/Society of Composers & Lyricists/Music Creators North America’s Ex Parte Letter Stands Up for Transparency

[Editor T says: Remember when songwriters were promised that the Music Modernization Act was going to solve all your problems—AND give you a set of steak knives? Remember? Never needs ironing? And doubles on sax? One big feature was digital music services paying up to the Mechanical Licensing Collective for matching the entire black box from “inception” meaning all the money a service ever held that their data vendors couldn’t match and weren’t paid to try very hard, especially Spotify aka “defendant”. Who was that data vendor who couldn’t match? HFA. And who is the MLC’s data vendor? HFA. So the last couple weeks the insiders have been back-tracking behind closed doors at the Copyright Office on how–or if–that black box will be paid to songwriters. The only way you’d ever know this was happening is if you were paying very close attention to the Copyright Office “ex parte” letters. (sign up for email alerts there.) The Songwriters Guild/SCL/MCNA group is the songwriter’s junkyard dog with their teeth sunk in the tuchus of the insiders. We’ll be posting a selection of these recent “ex parte” letters which publicly document private conferences held by the Copyright Office with “stakeholders”. “Everyone’s a winner, bargains galore….the large print giveth and the small print taketh away” as Tom Waits said.]

EX PARTE MEETING SUMMARY WITH

THE UNITED STATES COPYIGHT OFFICE

Docket Number 2020-12

November 18, 2020

Re: Summary of the November 13, 2020 Ex-Parte Meeting Between the United States Copyright Office on behalf of the following independent, US-based music creator organizations: the Songwriters Guild of America, Inc. (SGA), the Society of Composers & Lyricists (SCL), and Music Creators North America, Inc. (MCNA)

On Friday, November 13, 2020, an ex-parte video-conference meeting was conducted by the United States Copyright Office (USCO) with multiple interested parties concerning rulemakings in connection with Doc. No. 2020-12. This summary is submitted on behalf of SGA, SCL and MCNA (together, the “Independent Music Creator Organizations” or “IMCOs”), all of which were represented at the meeting. Attending for SGA were President Rick Carnes, outside counsel Charles Sanders, and outside legislative consultant Marla Grossman of the American Continental Group (ACG). Attending for SCL was President Ashley Irwin. Attending for MCNA was President Eddie Schwartz. The meeting was chaired on behalf of the USCO delegation by its General Counsel, Regan Smith.

Individuals representing the IMCOs began by respectfully stressing, as they had in their ex parte tele-conference with the USCO on September 11, 2020, the bedrock principle that independent music creators speak for themselves on all issues related to their rights and interests, and that no other music community groups have the right or authority to claim otherwise. Specifically, the IMCOs rejected the assertion by some music publisher representatives (backed by at least one of their affiliated songwriter groups) that the USCO’s oversight and rulemaking authority concerning matters related to 2020-12 should be viewed as being narrowly limited.

The IMCOs have stressed on multiple occasions through their USCO Comments a strong belief that Congress, by its very construction of the Music Modernization Act (MMA), intends the Office to have broad and expansive authority to oversee and guide the implementation of the MMA by the Mechanical Licensing Collective (MLC). That is especially so in regard to ensuring transparency, reliability and fairness regarding the safeguarding of music creator rights, the class of persons for whom the MMA was most clearly enacted to protect pursuant to Article I Section 8 of the US Constitution.

The main issue of concern addressed at the November 13, 2020 meeting was the oversight and disposition of accrued, unmatched royalties collected and held by Digital Music Providers and subsequently distributed pursuant to private negotiated agreements with music publishers. It is believed by the IMCOs that as regards those agreements and royalties, some or all of the parties thereto were very likely aware at the time of negotiation and execution, that (i) such confidential agreements and payments concerned royalties accrued from the unauthorized reproduction or distribution of musical works owned by unrelated third parties; (ii) little to no effort had been made to properly identify rightful ownership, and (iii) such accruals might soon be subject to payment rules under the MMA that would require strictly delineated sharing of such “permanently” unmatched royalties with music creators by music publishers (including a minimum floor of 50%) after the conducting by the MLC of bona fide searches for rightful owners.

Further assertions were made by the IMCOs at the meeting that after three years of discussions, still no informed estimate had yet been made by Digital Music Providers of the aggregate amounts of unmatched royalties both still being held and already distributed. Thereafter, one knowledgeable representative of Digital Music Providers estimated that while there remain hundreds of millions of dollars in accrued, unmatched royalties in the possession of the Digital Music Providers, tens of millions of dollars in accrued unmatched royalties were indeed turned over directly to music publishers pursuant to the terms of the confidential, private negotiated agreements.

As was also made clear during the meeting, the IMCOs have no direct information as to the content of such private negotiated agreements, and no direct information as to what became of the unmatched royalties such music publishers received.

Several music publishers have claimed in ex parte letters to the USCO that they indeed shared such unmatched royalties with their affiliated music creators, but no specific information has been provided as to the methodology and details of such sharing, including whether the principles and and guarantees eventually set forth in the MMA as enacted were applied.1 Moreover as the IMCOs reported at the meeting, an informal and ongoing process of canvassing creators currently being conducted by each MCNA member organization have yet to confirm a single instance in which a songwriter or composer received a royalty statement indicating that portions of such accrued, unmatched royalties were included (though they may have been) and on what basis.

As the IMCOs asserted at the meeting, were such unmatched royalties paid to songwriters and composers by music publishers on terms resembling the MMA rules concerning music creator protections (as either drafted or eventually enacted), it seems counter-intuitive that that no line item would appear anywhere in accounting statements indicating the source of such payments, not only as a matter of sound accounting practice, but of earned good will. No other music creator groups present at the meeting challenged or contradicted these ongoing findings or assertions. In any event, as noted, it seems that the burden of demonstrating the details of such payments is more properly placed on the music publishers who claim to have made them, which could be as simple as each publisher disclosing a properly predicated and binding assertion that the payments were made, how many were made, what was the aggregate payment, and how was each songwriter’s share determined.2

Under such circumstances as they currently exist, as SGA President Rick Carnes pointed out at the meeting, asking interested parties to render opinions on the minutiae of proposed rules concerning the disposition of accrued unmatched royalties –with only some parties having an understanding of how the private agreements operated, who got paid, who didn’t, and why– is a difficult position in which to place the IMCOs and other parties with important, related interests.

As Mr. Carnes pointed out, the issues of (i) how to protect the rights of those music creators and copyright owners who did not participate in the privately negotiated agreements by ensuring that there is an opportunity to actually match those already-distributed royalties to their proper owners and to effect the prompt payment of such sums, (ii) how to balance accounts once such proper identifications have been made, while also ensuring that affiliated music creators have been properly paid by their music publishers concerning royalties collected under the private negotiated agreements that otherwise would have flowed through the MLC and been explicitly subject to MMA distribution requirements, (iii) how to address demands of Digital Music Providers that they not be made to pay twice for the same unmatched uses, and (iv) how to ensure that such private negotiated agreements are not utilized in the future in attempts to override the provisions of the MMA, all need to be addressed prior to a proper analysis of how most effectively to move forward.3

Thus, as was stated at the meeting, while the IMCOs agree the MMA makes clear that ALL accrued unmatched royalties for unauthorized reproductions and distributions dating back to inception must be turned over to the MLC by Digital Music Providers, and that the term “generally accepted accounting principles” used in the Act in no way provides an exception to that unambiguous provision, the crucial questions enumerated above also need to be immediately addressed as matters of fairness and transparency mandated by the Act.

As to the very important issue of retroactive effect of the MMA provisions concerning guaranteed music creator participation in the distribution of permanently unmatched royalties at or above the fifty percent level, the IMCOs adamantly believe, as stated at the meeting, that it is wholly illogical for any interested party to argue that Congress intended as it did to require that all accrued, unmatched royalties be rendered to the MLC by Digital Music Providers back to each service’s date of inception, but that the songwriter, composer, transparency and good faith protections guaranteed by the Act would not otherwise be applicable in the event of premature disgorgement of unmatched royalties by Digital Music Providers to music publishers pursuant to prior agreements. This is an issue that certainly requires further attention, and calls for more comprehensive discussion than for which there was time at the meeting.

As was noted several times by various speakers, the Chair of the Senate Judiciary has warned that absent a fair and transparent resolution of these complex issues, the MMA may become a magnet for litigation, the very opposite effect that it was intended to achieve. The IMCOs wholeheartedly agree, and stand ready to assist the USCO in taking all reasonable measures to achieve the transparency, fairness and robust oversight that the legislation demands in order to avoid that undesirable result.

To reiterate in closing, as the IMCOs tried to make clear at the meeting, voluntary disclosure of the specific details of the privately negotiated agreements, redacted to protect legitimate privacy and antitrust concerns, is an important prerequisite to achieving those goals. The IMCOs further repeat their stated beliefs that the USCO has the singular ability if not to compel, at least to facilitate such disclosures in a timely manner, and respectfully urge it to do so.

Further comments of SGA, SCL and MCNA will be forthcoming in regard to the proposed rulemaking by next week’s deadline. As stated at the conclusion of the meeting, however, the IMCOs believe that all parties would benefit by a brief extension for the submissions of such comments until the Monday after the Thanksgiving holiday in order to allow for further discussions among the parties. The IMCOs acknowledge a certain lack of unified support for this suggestion at the meeting, and active opposition by at least one music publisher representative, but continue to believe it to be an advisable accommodation. Those parties wishing to abide by the original deadline would always be free to do so, as was explicitly pointed out.

The IMCOs thank the USCO for scheduling the ex parte discussion, and look forward to continuing this constructive dialog.

Respectfully submitted,

Charles J. Sanders
Outside Counsel
Songwriters Guild of America, Inc.

cc: Regan Smith, General Counsel, The United States Copyright Office
Rick Carnes, SGA President
Ashley Irwin, SCL President
Eddie Schwartz, MCNA President

  1. At least one publisher has indicated an alleged willingness to share details of such payments with any writer who makes inquiry as to his or her own works, an unlikely scenario considering that a huge percentage of writers have no knowledge of the private negotiated agreements in the first place, and –to the knowledge of the IMCOs based on informal canvassing– have not been directly informed about them by their publishers. See, e.g., Ex Parte letter from Sony/ATV dated October 28, 2020: “It has been SATV’s practice to explain to our writers who inquire how these royalties are distributed and reflected on their statements.”

2. Likewise, it seems that the burden of demonstrating how much each Digital Music Provider paid to music publishers is more properly placed on the services who claim to have made the payments, which in turn could be as simple as disclosing a properly predicated and binding assertion that the payments were made, how many were made, what was the aggregate payment, and how was each publisher’s share determined. It is anticipated that such details may be forthcoming from Digital Music Providers in their reporting under the MMA, but that remains uncertain.

3 That is especially so in light of the apparent assertions of one or more Digital Music Providers that they may forego the limited safe harbor provisions provided by the MMA by not turning over to the MLC the full amount of accrued, unmatched royalties dating back to inception of use, probably under the assumption that the potential running of applicable statutes of limitations will provide the same protections as the safe harbor without payment of the royalties due. The IMCO raised this statute of limitations issue at the meeting, and was gratified that at least one Digital Music Provider representative felt that this was an issue worthy of further discussion, hopefully with the important input of the USCO. See also, related comment of DLC that “…a DMP could make the rational choice to forego the payment of accrued royalties entirely, and save that money to use in defending itself against any infringement suits.” Comments Of Digital Licensee Coordinator, Inc. In Response To Notice Of Proposed Rulemaking , Docket 2020-12, Document COLC 2020-0011-0008 (Aug. 17, 2020) at 4.

Chris Castle’s Copyright Office Comments on the Black Box Controversy

Here’s some more MLC news you’ll never read about in the trade press.

Yesterday we posted a shocking revelation from the MediaNet/SOCAN ex parte letter to the Copyright Office: It appears that the digital music services have no intention of complying with the much ballyhooed benefit to the Music Modernization Act–in return for the “reach back” safe harbor that somebody decided to grant the services retroactively, the services would pay over (or you could say “disgorge”) all the unmatched and unpaid mechanical royalties that they were holding, sometimes for years, and always secretly. (Adding insult to injury, MediaNet seems to think that referring to SOCAN’s ownership of MediaNet somehow makes screwing us over into a songwriter-friendly act of good fellowship and felicity. More likely, SOCAN itself knows nothing about it.)

Remember, MediaNet straight up threatened to decline the reach back safe harbor and not pay over the black box. As it turns out, MediaNet’s position is not unique–as Chris Castle identified in his reply comment on the Copyright Office’s black box study, all of the services represented by the DLC made that exact threat to the Copyright Office. As Chris observes, these are not idle threats. They are made by the biggest corporations in commercial history, one of which may be broken up due to antitrust investigations on two continents.

Something must be done and done quickly before the DLC decides to take the blanket license without the limitation on liability for past infringements having successfully scared off anyone who could have sued but didn’t thinking that there was a fixed reach back safe harbor. That seems like it will result in the big guys having paid off the big guys in the NMPA’s secret settlement that was being negotiated simultaneously with the MMA (the NMPA’s umbrella December 17, 2017 Pending and Unmatched Usage Agreement referenced in the MediaNet ex parte letter and talked around in other filings. Remember–the MMA was introduced a few days after the secret NMPA agreement on December 21, 2017 and Wixen Music Publishing felt they had to sue Spotify by December 31, 2017 because of the reach back safe harbor. So everyone except the songwriters–and perhaps most Members of Congress–seems to have known that the fix was in on black box.)

Another fine mess they got us into. Here’s the except from Chris Castle’s reply comment:

The DLC’s Quid Pro Quo Revelation

The concept of a “black box” distribution is a pale mimic of a simple
fact: It is not their money. The fundamental step that Title I excuses
is basic and would solve much of the unmatched problem if Title I did
not exist: Don’t use a work unless you have the rights.

It is a fundamental aspect of copyright licensing and it is not metaphysical.
Yet the message from all negotiators concerned in this process seems
to shelter legitimacy in a complication of dangers to the black box that
come down to another simple fact: Obey and be quick about it or the
law will take your money and give it to someone else.

How much is in the black box? They won’t tell you. From where? Not
your business. From when? Confidential. Is it yours? Already paid it
to someone else before you even knew it was there. And Lord knows
that money once taken incorrectly in the dark is unlikely to be paid
correctly in the light.

Comments by the DLC demonstrate conclusively that addressing the
black box has taken on even greater urgency. The DLC’s Initial
Comment in a related docket is unusually revelatory for a group with a
multitrillion dollar market capitalization that loves them some
protective orders. This passage is particularly breathtaking:

This was the heart of the deal struck by the stakeholders in
crafting the MMA: to provide legal certainty for DMPs, through
a limitation on liability, in exchange for the transfer of accrued
royalties.

If that were “the deal” it is news to me, and I like to think that I’ve
been reading along at home pretty attentively. If I wasn’t aware of
“the deal”, I’m sure I wasn’t alone in my ignorance, but I’m far more
understanding of why the negotiators would have been motivated to
keep “the deal” under wraps if that’s really what it was.

If “the deal” wasn’t kept quiet, someone might have asked why there
was a “deal” when the services were simply agreeing to pay money
they already owed and that they were already obligated to pay for infringements that already occurred. Yet, services still got the new
safe harbor trophy to put on the wall in the copyright hunting lodge
next to the DMCA and Section 230.

The gall doesn’t end there, however. The DLC goes on to make this
threat of imminent harm:

[The “deal”] is a crucial point for the Office to keep in mind as it
crafts rules in this space. If the regulations make it less likely
that a DMP will be able to rely on that liability protection when
it needs it—i.e., if it increases the risk that a court would deem a
DMP to not have complied with the requirements in section
115(d)(10)—a DMP could make the rational choice to forego the
payment of accrued royalties entirely, and save that money to
use in defending itself against any infringement suits.

It is a bit odd that the DLC seems to think of Title I as their private
contract, but there it is. The DLC members’ anticipatory repudiation
of the purported deal that the world now knows underpins Title I was
both refreshingly brazen and starkly shocking. Given that the Eight
Mile Style
case against DLC member Spotify (and both Spotify and
The MLC’s vendor the Harry Fox Agency) is a live action, the DLC is
not making an idle threat. The DLC tells us that if its market cap isn’t quite high enough to suit, Spotify could immediately dip into the black
box for “money to use in defending itself.”

The relationship with the services apparently has settled into the
customary laying about with threats and blackguarding both
songwriters and the Copyright Office. That’s reassuring in confirming
that human nature hasn’t actually changed and these companies really
were the Data Lords we had always known our betters to be after all,
sure as boots.17 Maybe one day the scorpion really won’t sting the frog.
Maybe another “unity dinner” is in order. But not today.

Regardless, it is clear that the Copyright Office is almost the only place
that songwriters can go for relief and an explanation of how the MMA
is to be implemented whatever secret deal the DLC now purports to
have made. Given the DLC’s unequivocal threat on behalf of its
members, there is no doubt of the imminent danger that the black
box currently being held is about to vanish into thin air if something
isn’t done immediately to preserve the status quo. The balance of
hardships pretty clearly tilts in favor of the songwriters as the safe
harbor services control the money and always have.

@CISACnews and BIEM’s Copyright Office Comments on the MLC

[Songwriters outside the United States should pay close attention to the disconnect between their CMOs and the MLC. It’s becoming increasingly apparent that The MLC is very US-centric and at that very Anglo-American centric in its myopia. We haven’t done a point by point comparison, but we have posted CISAC and BIEM’s comments in the past and we can’t help noticing that their current comment has a few references to prior comments that seem to have been largely ignored. They are very polite about it (maybe too polite about it) but the consequences of ignoring the CMOs is that any ex-US songwriter whose songs are exploited in the US and who relies on their CMO to collect their US earnings may find their streaming mechanicals reduced to zero after 1/1/21 if the HFA database that The MLC is using is not properly mapped.

The MLC’s continued disregard for CMOs is puzzling unless you think perhaps that The MLC doesn’t think CMOs will continue to play a role in the international copyright system. Whatever The MLC’s long-term goals, it is clear that the Music Modernization Act was drafted from an entirely US-centric point of view and that the concerns of our international partners were never taken into account while at the same time forcing them to accept the MMA’s terms. Another example of the haphazard approach that is rapidly becoming the hallmark of the MMA.]

Read the entire comment here.

The International Confederation of Societies of Authors and Composers (“CISAC”) and the International Organisation representing Mechanical Rights Societies (“BIEM”) would like to thank the U.S. Copyright Office (“the Office”) for the opportunity to provide comments on the Proposed Rulemaking on the Public Musical Works Database (“Database”) and Transparency of the Mechanical Licensing Collective (“MLC”). This submission follows our previous comments to the Office, in particular on the Notifications of Inquiry from September 2019 and April 2020 (SG19-1116; SG19-1284; SG20-0614).

As already explained in previous submissions, CISAC and BIEM are international organisations representing Collective Management Organisations (“CMOs”) worldwide that are entrusted with the management of creators’ rights and, as such, have a direct interest in the Regulations governing the functioning of the Database and the transparency of MLC’s operations. CISAC and BIEM would like to thank the Office for highlighting the existence and particularity of entities such as CMOs that are not referred to in the MMA (page 58175 of the Proposed Rulemaking1) and should be treated equally.

CISAC and BIEM are grateful that some of their comments were taken into account by the Office in the Proposed Rulemaking, but would like to reiterate their concerns on certain provisions which, if not adequately addressed, may affect the administration of rights of foreign rightsholders in the US, as follows…

A/ Copyright ownership information and shares

As part of the list of mandatory information for matched works, the Office lists “the copyright owner of the musical work (or share thereof), and the ownership percentage of that owner” (for unmatched works, it is the same as long as the owner has been identified but not located).

For the sake of clarity, we reiterate the need to have CMOs clearly recognized as “copyright owners” under the provisions of the Proposed Rulemaking. Indeed, as already explained in several of our previous submissions, outside the U.S., the “copyright ownership” of the work is attributed to the CMOs managing the mechanical rights of the so-called BIEM repertoire. This would mean that the “copyright owner” share as defined in the Proposed Rulemaking should refer specifically to the share controlled by the CMO as administrator of the work, as opposed to the actual composer/songwriter share.

This clarification also has direct consequences with respect to the determination of sensitive and confidential information which cannot be made publicly accessible through the Database, as further argued in CISAC and BIEM’s comments to the Proposed Rulemaking on Treatment of Confidential Information (see SG20-0562).

If, however, it is considered indispensable for the DMPs and the MLC to have creators’ information and percentage shares for identification and distribution purposes, such data should not be disclosed to third-party entities or made publicly accessible in the Database for the reasons stated in our previous submission. In particular, in the 28 May 2020 comments to the Proposed Rulemaking on Treatment of Confidential Information submitted to the Office,2 CISAC and BIEM explained that there seemed to be no business need to include the creator percentage shares in the musical works, as this information was not required to license or distribute musical works, and constitutes particularly sensitive and confidential financial and business information for creators and their representatives.

Personal identifiable information

CISAC and BIEM fully agrees with the Office with regards to the withdrawal of the date of birth from the list of mandatory public information to be included in the Database. However, CISAC and BIEM continue to be very much concerned with the general compliance of MLC’s operations, including the Database, with data protection laws. As for now, the Proposed Rulemakings are silent on this, although this is a key issue for CMOs worldwide and probably also for other rightsholders.

CISAC and BIEM thus respectfully suggest that the Regulations include clear language on the MLC’s full compliance with data protection laws, and in particular with the European General Data Protection Regulation, as the MLC will process personal data of EU creators. This means that the Database shall be construed in compliance with the GDPR requirements from the building-up of the system (i.e. privacy by design) until the processing operations, providing the requisite security guarantees.

Point of contact for inquiries and Complaints

CISAC and BIEM welcome the inclusion of the need for the MLC to provide a point of contact for inquiries or Complaints. However, as requested in our submission SG20-0614, the Proposed Rulemaking should go further and also make mandatory the publication of the rules that will be applied by the MLC’s dispute resolution committee. This will help to streamline and give more transparency to the dispute resolution process, which will benefit both copyright owners and DMPs.

Future of Music Coalition Warns Against Vendor Lock-in in Copyright Office Comments

[The Future of Music Coalition joins the chorus of concern about shenanigans at The MLC, Inc. with special access and treatment of its vendors regarding the “public” database. As others have pointed out, there’s a real question as to whether The MLC, Inc. is actually building its own database or is just building up the data muscle of its vendor the Harry Fox Agency (formerly owned by MLC promoter and nonvoting board member NMPA. The MLC is prohibited by law from licensing other than the narrow window of streaming mechanicals, but HFA is not.]

[I]t’s important that MLC’s chosen vendors not be able to leverage their
status with the MLC to advantage themselves in other business activities not covered under the MMA. If a vendor was able to leverage its status with MLC to the detriment of competitors in other kinds of licensing activity (even informally), that wouldn’t serve competition, consumers, or creators. Additionally, the Office needs to ensure that provisions about database vendors being replaceable are meaningful.

We see no reason to expect that the MLC’s chosen vendors aren’t up to the task, but songwriters and composers need assurance that if a vendor ends up having problems and a change is necessary, that change will really be possible.

The Office can require the MLC to disclose what it is doing to prevent any vendor from being too operationally enmeshed with the MLC that it either enjoys an unfair advantage through that relationship, or that it would be practically impossible for another vendor to step in.

Read the entire post here.

Guest Post: The Supreme Court Should See Through Google’s Industrial-Strength Fair Use Charade

[This post first appeared on Morning Consult. The US Supreme Court will hear oral argument in the Google v. Oracle case on October 7]

Google’s appeal to the U.S. Supreme Court of two Federal Circuit decisions in Oracle’s favor is turning into the most consequential copyright case of the court’s term — if not the decade. The appeal turns in part on whether the Supreme Court will uphold the Federal Circuit’s definition of fair use for creators and reject Google’s dubious assertion of “industrial strength” fair use.

I co-wrote an amicus brief on the fair use question on behalf of independent songwriters supporting Oracle in the appeal. Our conclusion was that the Supreme Court should affirm the Federal Circuit’s extensive analysis and hold for Oracle because Google masks its monopoly commercial interest in industrial-strength fair use that actually violates fair use principles.

The story begins 15 years ago. Google had a strategic problem. The company had focused on dominating the desktop search market. Google needed an industrial-strength booster for its business because smartphones, especially the iPhone, were relentlessly eating its corporate lunch. Google bought Android Inc. in 2005 to extend its dominance over search — some might say its monopoly — to these mobile platforms. It worked — Android’s market share has hovered around 85 percent for many years, with well over 2 billion Android devices.

But how Google acquired that industrial boost for Android is the core issue in the Oracle case. After acquiring Android, Google tried to make a license deal for Sun Microsystems’ Java operating system (later acquired by Oracle). Google didn’t like Sun’s deal. So Google simply took a verbatim chunk of the Java declaring code, and walled off Android from Java. That’s why Google got sued and that’s why the case is before the court. Google has been making excuses for that industrial-strength taking ever since.

Why would a public company engage in an overt taking of Oracle’s code? The same reason Willie Sutton robbed banks. Because that’s where the money is. There are untold riches in running the Internet of Other People’s Things.

Google chose to take rather than innovate. Google’s supporters released a study of the self-described “fair use industries” — an Orwellian oxymoron, but one that Google firmly embraces. Google’s taking is not transformative but it is industrial strength.

We have seen this movie before. It’s called the value gap. It’s called a YouTube class-action brought by an independent composer. It’s called Google Books. It’s called 4 billion takedown notices for copyright infringement. It’s called selling advertising on pirate sites like Megaupload (as alleged in the Megaupload indictment). It’s called business as usual for Google by distorting exceptions to the rights of authors for Google’s enormous commercial benefit. Google now positions itself to the Supreme Court as a champion of innovation, but creators standing with Oracle know that for Google, “innovation” has become an empty vessel that it fills with whatever shibboleth it can carelessly manipulate to excuse its latest outrage.

Let’s remember that the core public policy justification for the fair use defense is to advance the public interest. As the leading fair use commentator Judge Pierre Leval teaches, that’s why fair use analysis is devoted to determining “whether, and how powerfully, a finding of fair use would serve or disserve the objectives of the copyright.” You can support robust fair use without supporting Google’s position.

Google would have the court believe that its fair use defense absolves it from liability for the industrial-strength taking of Oracle’s copyright — because somehow the public interest was furthered by “promoting software innovation,” often called “permissionless innovation” (a phrase straight out of Orwell’s Newspeak). Google would have the court conflate Google’s vast commercial private interest with the public objectives of copyright. Because the internet.

How the Supreme Court rules on Google’s fair use issue will have wide-ranging implications across all works of authorship if for no other reason than Google will dine out for years to come on a ruling in its favor. Photographers, authors, illustrators, documentarians — all will be on the menu.

Despite Google’s protestations that it is really just protecting innovation, what is good for Google is not synonymous with what is good for the public interest — any more than “what’s good for General Motors is good for America,” or more appropriately, “what’s good for General Bullmoose is good for the USA.”

Press Release: @SGAWrites Welcomes Appointment of Shira Perlmutter as New Head of the Copyright Office

 

[The Trichordist sez this is really great news!]

The Songwriters Guild of America applauds the selection of
Shira Perlmutter as the next Register of Copyrights.  Ms. Perlmutter has dedicated her entire professional career to serious study of the importance of strong copyright protections to maintaining a healthy democracy and a vibrant economy, and to acting on her knowledge to ensure that the voice of the creator is always heard.  Her love and respect for the creative arts is well known throughout the community of songwriters and composers, and there will likely be unanimous music creator approval of this excellent choice by the Librarian of Congress Dr. Carla Hayden. 

Thanks are due to her staff, and the entire staff of the US Copyright Office, including general counsel Regan Smith and especially acting Register Maria Strong, who is to be thanked and congratulated for an interim job superbly done.  Congratulations to Ms. Perlmutter, with whom we look forward to working for many years to come in the advancement and protection of the rights of authors and creators.

 –SGA President Rick Carnes

#ShowUsTheMoney: Guest Post: @CopyrightOffice Regulates the @MLC_US: Selected Public Comments on MLC Transparency: Chris Castle

[This is an except from Chris Castle‘s June 7 comment to the Copyright Office regarding the transparency of The MLC. You can read the entire comment here. Although The MLC has launched its “Data Quality Initiative” to great fanfare, that DQI process merely confirms how bad the HFA database is since there still is no MLC database as required by law. Since there’s no indication of when The MLC is going to launch and there is a strong indication that nobody in power is doing anything about it (looking at you, Copyright Office), this is a particularly timely excerpt. Remember you heard it here first if your mechanical royalty statements drop to zero once The MLC takes over on January 1. That is 113 days from today and we have yet to seen a thing from The MLC and we have no promise of when we will see anything. Given that there has been zero investigative journalism on this topic from industry outlets aside from “how does The MLC withstand its own awesomeness” the comments that we are serializing are about all you’re going to get in the way of transparency.]

Quality Control of The MLC’s Operations and Platforms

There is an immediate need for The MLC to demonstrate that its systems actually work.  That need will be ongoing, so it would be well for the Office to promulgate regulations requiring a periodic public demonstration of the operability of The MLCs systems, a frequent public disclosure of bugs and bug fixes, and a frequent public disclosure of any missed payments or other glitches.  These matters are appropriate for the transparency of The MLC because if either The MLC or another MLC are not required to disclose these items, no one may ever know there was a problem (but see the discussion of whistleblowers below).

In considering the timing, I would caution the Office against thinking in years rather than weeks.  There is a tendency to think about these things in annual or more time periods.  This will prove to be a mistake given the scale and volume of transactions.  Would you tell Visa it only need to confirm the integrity of its fraud detection systems once every three years?  Or should it be more frequently?  Financial services is a good corollary for streaming mechanicals, with the exception that the royalty payable for each stream starts several decimal places to the right unlike credit card transactions.

There is an immediate need for this transparency.  Recall that MLC executive Richard Thompson said at the Copyright Office panel on unclaimed royalties last December, “[A] lot of the time since July has been spent working very closely with the staff at HFA and ConsenSys, really starting to nail down how all of this is going to work at the, you know, lowest operational level, all of the things that we need to work out.”  (Referencing the July 8, 2019 designation of The MLC as the MLC.) [1]   

Of course, The MLC didn’t announce the selection of HFA and ConsenSys until November 26, 2019[2] and was evidently still interviewing vendors up to that date.  Even so, I’m sure The MLC has been hard at work on developing their platform.

Mr. Thompson also stated at the December 2019 panel:

So our current timeline has the first version of the portal going live late Q2, early Q3, of next year [i.e., 2020]. I emphasize again that is the first version. That will not be functionally complete. It will have the, you know, the first set of functionality that we want to make available to the rightsholder community. So in particular, sort of, being able to look at your catalog, manage your catalog.[3]

Late Q2 to early Q3 is now.  [As of this post, it is the end of Q3 and we still have nothing but Mr. Thompson still has a job.] To my knowledge, The MLC has made nothing available for songwriters to know what is going on at The MLC or how to start registering works. 

Mr. Thompson also stated:

“You know, the first version of the portal doesn’t have statementing on it, because we won’t need statementing until 2021, you know, the first quarter of 2021.”[4]

I would respectfully ask the Office to determine what happens if The MLC is not able to render statements on time.  Presumably the income from streaming mechanicals that had been paid by the services directly to songwriters or music publishers would be transferred over to The MLC as of the License Availability Date (currently January 1, 2021).  If that transfer occurs and The MLC is not then ready for “statementing” (or, presumably, its corollary, “paymenting”) for the billions if not trillions of streaming transactions for all the world’s music in less than a year’s time from today, then streaming mechanical royalties could drop to zero until The MLC could handle both statementing and paymenting.[5]

While Mr. Thompson seems to be focused on the Q1 2021 distribution date for royalties payable in the normal course, the other significant statementing and paymenting date is July 1, 2021 when the first unmatched distribution is to be paid under Title I.  There are also the obvious and expressly stated “public notice of unclaimed royalties” reporting requirements for The MLC’s public facing website listing all unmatched songs (or shares of songs) and publicity efforts for the unmatched.[6]  This provision, too, is glitchy, but  presumably will come into effect soon.  I realize there may be some side deals cut regarding extending that statutory payment date, but it would at least be a confidence building exercise to know that The MLC could make the unmatched payment as of the statutory date if called upon to do so. 

Songwriters have very little visibility into The MLC’s operations except what came out at the Copyright Office panels, for which I am grateful, and also various interviews.  There is little substantive information in the press, and even less on The MLC’s website.  Therefore, it would be very helpful if the Office could require The MLC to demonstrate to the public how its platform is to function.  Such a demonstration might bring helpful suggestions from their peers or the ex-US CMOs that have been operating for decades.

It would also be helpful if the Office promulgated a bright line regulation that told songwriters around the world if the July 1, 2021 goal posts have moved and if so where they have been moved to.  I must say I have somewhat lost the page on this, given former Register Temple’s last testimony to the House Judiciary Committee about who has agreed what on delaying distribution.  This rulemaking would be a great opportunity to tell the world if and how the insiders have decided to change the law.

As the House Judiciary Committee stated:

Testimony provided by Jim Griffin at the June 10, 2014 Committee hearing highlighted the need for more robust metadata to accompany the payment and distribution of music royalties….In an era in which Americans can buy millions of products via an app on their phone based upon the UPC code on the product, the failure of the music industry to develop and maintain a master database has led to significant litigation and underpaid royalties for decades. The Committee believes that this must end so that all artists are paid for their creations and that so-called ‘‘black box’’ revenue is not a drain on the success of the entire industry.[7]

Having accomplished their goal through compulsory legislation, we are all watching the database cadre get to work and looking forward to learning how it is done from their teaching.

Alternatively, as is widely suspected among some songwriters I have spoken to, The MLC might rely on HFA’s statementing and paymenting functionality to limp along by sending necessary but not sufficient statements to HFA publishers or publishers that HFA can match.  This would be, essentially, the same process that got a couple of HFA’s licensing clients sued repeatedly, and ironically led to the Title I safe harbor in the first place. 

Absent proper transparency in the runup to the License Availability Date, any sudden drop in revenue would catch songwriters by surprise.  In the time of the pandemic, such a sudden contraction of income could be even more devastating than usual.[8]

Transparency would help shine sunlight on that problem.  While The MLC may give interviews and appear on panels describing their activities, we should remember the words of the great Bruin John Wooden who cautioned that we should not mistake activity for achievement.  If you practice free throws by yourself all weekend, it doesn’t mean you’ll be a better player with the team at Monday practice—or that the team is any more likely to win when it is game time at Pauley on Saturday.


[1] Transcript, United States Copyright Office Unclaimed Royalties Study Kickoff Symposium (Dec. 6, 2019) at 28 ln 15 hereafter “Kickoff Transcript”.

[2] Tatania Cirisano, Mechanical Licensing Collective Selects Leadership, Partners for Copyright Database, Billboard (November 26, 2019).

[3] Kickoff Transcript at 40 ln 2.

[4] Kickoff Transcript at 40-41.

[5] It is well to note that such a contraction probably would not affect direct licenses or HFA’s modified compulsory licenses.

[6] 17 U.S.C. § 115 (d)(3)(J)(iii).

[7] House Report at 8.

[8] Songwriters are already expecting lower royalties in January 2021 according to BMI’s President and CEO Mike O’Neil: “[We] anticipate an impact in January 2021, when today’s performances and corresponding licensing dollars (2nd quarter 2020) will be reflected in your royalty distributions. While you may see a lower distribution that quarter than you might typically receive under ordinary circumstances, given BMI’s business model, we have the time and ability to plan for this outcome.” A Message from Mike O’Neil, BMI.com (April 7, 2020) available at https://www.bmi.com/news/entry/a-message-from-bmi-president-ceo-mike-oneill-regarding-royalty-payments

Copyright Office Regulates @MLC_US: Selected Public Comments on MLC Transparency: @KerryMuzzey

[Editor Charlie sez: The U.S. Copyright Office is proposing many different ways to regulate The MLC, which is the government approved mechanical licensing collective under MMA authorized to collect and pay out “all streaming mechanicals for every song ever written or that ever may be written by any songwriter in the world that is exploited in the United States under the blanket license.”  The Copyright Office is submitting these regulations to the public to comment on.  The way it works is that the Copyright Office publishes a notice on the copyright.gov website that describes the rule they propose making and then they ask for public comments on that proposed rule.  They then redraft that proposed rule into a final rule and tell you if they took your comments into account. They do read them all!

The Copyright Office has a boatload of new rules to make in order to regulate The MLC.  (That’s not a typo by the way, the MLC styles itself as The MLC.)  The comments are starting to be posted by the Copyright Office on the Regulations.gov website.  “Comments” in this world are just your suggestions to the Copyright Office about how to make the rule better.  We’re going to post a selection of the more interesting comments.

There is still an opportunity to comment on how the Copyright Office is to regulate The MLC’s handling of the “black box” or the “unclaimed” revenue.  You can read about it here and also the description of the Copyright Office Unclaimed Royalties Study here.  It’s a great thing that the Copyright Office is doing about the black box, but they need your participation!]

Read the comment by Kerry Muzzey

The launch of iTunes in 2001 began the democratization of music distribution: suddenly independent artists had a way to reach their fans without having to go through the traditional major label gatekeepers. Unfortunately most of those independent artists didn’t have a music business background to inform them about all of the various (and very arcane) royalty types and registrations that were required: and even if they did, Harry Fox didn’t let individual artists register for mechanicals until only recently.

The result? 19 years’ worth of unclaimed royalties by so many independent artists who have no idea how to access them.

We had hoped that the MMA would fix this, but the “black box” of unclaimed royalties is going to be distributed to the major publishers based on market share. We independent artists don’t have “market share” – but we do have sales and streams that are significant enough to make a difference to our own personal economies. A $500 unclaimed royalty check is to an independent musician what a $100,000 unclaimed royalty check is to a major publisher: it matters. Those smaller unclaimed royalty amounts are pocket change or just an inconsequential math error to the majors but they’re the world to an independent writer/publisher. And that aside, these royalties don’t belong to the majors: they belong to the creators whose work generated them.

Please, please, please: you have to make that database publicly accessible and searchable like Soundexchange does. There needs to be a destination where all of us can point our friends and social media followers to, to say “you may have unclaimed royalties here: go search your name.” They can’t remain in the black box and they can’t go to the major publishers. These royalties must remain in escrow and all means necessary should be used to contact the writers and publishers whose royalties are in that black box: absolute transparency is required here, as is a concentrated press push by the MLC to all of the music trades and music blogs (Digital Music News, Hypebot, et al) and social media platforms encouraging independent artists to go to the public-facing database and search their name, their publisher name, their band name, and by song title, for possible unclaimed royalties.

Please: the NMPA can’t be allowed to hijack royalties that do not belong to them. Publishers are fully aware of how complex royalty types and royalty collections are: they and the NMPA must make every effort here to ensure that unclaimed royalties reach their rightful legal and moral recipients.

CISAC and BIEM Suggestions to US Copyright Office on MLC Oversight Regulations

We often overlook the international dimension to the Mechanical Licensing Collective created by Congress in the Music Modernization Act.  We’re not the only ones.

One of the most insightful comments in the Copyright Office’s public request for suggestions for regulations to govern the MLC came from CISAC and BIEM.

CISAC stands for Confédération Internationale des Sociétés d’Auteurs et Compositeurs.  Founded in 1928, CISAC has been working on the data exchanges and standard identifiers for songs and other non-recorded works since 1994.  CISAC created the much discussed abd widely adopted International Standard Work Code (“ISWC”) for songs.

BIEM stands for Bureau International des Sociétés Gérant les Droits d’Enregistrement et de Reproduction Mécanique.  Founded in 1929, BIEM represents mechanical collecting societies in some 58 countries.

You may not recognize those acronyms, so here is how the two organizations describe themselves in their comment:

The International Confederation of Societies of Authors and Composers (CISAC), and the International Organisation representing Mechanical Rights Societies (BIEM) are international organisations representing Collective Management Organisations (“CMOs”) worldwide1. CISAC and BIEM members are entrusted with the management of creators’ rights and, as such, have a direct interest in the regulations governing the new blanket licensing system for digital uses as well as the activities of the Mechanical Licensing Collective (MLC).

Another way to say it is that the MLC was to a large extent modeled on these mechanical rights societies with some important differences, starting with governance.  The president of CISAC is Jean-Michel Jarre, the composer.  That’s right, a composer is the president.  Just sayin’.  You may remember Jean-Michel from the #irespectmusic campaign when he was all-in early:

jean michael jarre IRM 1

Photo by Helienne Lindvall

Here’s an excerpt from the CISAC/BIEM filing that we though was important, but you should take a few minutes and read the entire thing.  It’s not very long and it includes vitally important concepts that were never mentioned in Title I of the Music Modernization Act.  The comment is spelled out very politely from people who actually know what they’re doing.  Let’s just say that independent songwriters are not the only ones who may end up in the dreaded black box.

Remember that MLC is accountable (no pun intended) for identifying and paying potentially on all songs ever written or that may ever be written that are exploited in the US under the new blanket compulsory license in Title I of MMA.  This doesn’t mean that all songs will be exploited all the time, but it does mean that MLC has chosen to be responsible for identifying every song and paying royalties to every songwriter as and when exploited–so to speak.  All with the authorization of the U.S. Congress.  Starting next January.

Good times.

Comments on Section B: Data Collection and Delivery Efforts

The correct identification of copyright owners shall be a key objective of the MLC. Regulations shall ensure the appropriate onward distribution of royalties to copyright owners, whether national or foreign, and therefore that non-US [Collective Management Organizations (“CMOs”)] are entitled to make registrations and thus, claim royalties with the MLC.

 Support the Non-Discriminatory Treatment of Foreign Rightholders

In compliance with article 5.1 of the Berne Convention guaranteeing non-discriminatory treatment between national and non-national creators, the Office should promulgate regulations that ensure rightholders of “US works”
and “non-US works” enjoy the same rights and are equally treated when their works are exploited in the US territory.

 Provide adequate means for CMOs to submit rightsholder information
Outside the US and in particular in Europe, it is common practice for creators to entrust the administration of both performing and mechanical rights to CMOs. As the history of mechanical rights collective management in Europe shows, CMOs are indispensable in the process of establishing the correct ownership of musical works (and shares of such works) on behalf of individual right holders. Oftentimes non-US CMOs are also responsible for the registration of works information licensed in the U.S. that are only sub-published, or not published at all, in the U.S. In this regard, it is essential that non-US CMOs are also entitled to make registrations and, thus, claim royalties with the MLC. Importantly, non-US CMOs (in particular BIEM Members) are normally able to contribute data in relation to work identification and to the registration of work information in the MLC’s Database with a high degree of reliability; in many cases their contributions would be necessary to supplement data submitted by DMPs.

Therefore, the role of non-US CMOs in the identification of works should be expressly foreseen by the regulations. Likewise, the role of CMOs should also be expressly foreseen by the Regulations with regards tothe proper use and implementation of data standards such as ISWC that will ultimately support the proper identification of rightsholders.

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