The Copyright Office solicited public comments about how things are going with the MLC to help the Office decide whether to permit The MLC, Inc. to continue to operate the Collective (see this post for more details on the “redesignation” requirement). We are impressed with the quality of many of the comments filed at the Copyright Office. While comments are now closed, you can read all the comments at this link.
For context, the “redesignation” is a process of review by the Copyright Office required every five years under the Music Modernization Act. Remember, the “mechanical licensing collective” is a statutory entity that requires someone to operate it. The MLC, Inc. is the current operator (which makes it confusing but there it is). If the Copyright Office finds the MLC, Inc. is not sufficiently fulfilling its role or is not up to the job of running the MLC, the head of the Copyright Office can “fire” the MLC, Inc. and find someone else to hopefully do a better job running the MLC. Given the millions upon millions that the music users have invested in the MLC, and the hundreds of millions of songwriter money held by the MLC in the black box, firing the MLC, Inc. will be a big deal. Given how many problems there are with the MLC, firing the MLC, Inc. that runs the collective
The next step in this important “redesignation” process is that The MLC, Inc. and the Digital Licensee Coordinator called “the DLC” (the MLC’s counterpart that represents the blanket license music users) will be making “reply comments” due on July 29. The Copyright Office will post these comments for the public shortly after the 29th. These reply comments will likely rebut previously filed public comments on the shortcomings of the MLC, Inc. or DLC (which were mostly directed at the MLC, Inc.) and expand upon comments each of the two orgs made in previous filings. If you’re interested in this drama, stay tuned, the Copyright Office will be posting them next week.
If you have been reading the comments we’ve posted on Trichordist (or if you have gone to the filings themselves which we recommend), you will see that there is a recurring theme with the comments. Many commenters say that they wish for The MLC, Inc. to be redesignated BUT…. They then list a number of items that they object to about the way the Collective has been managed by The MLC, Inc. usually accompanied by a request that the The MLC, Inc. change the way it operates.
That structure seems to be inconsistent with a blanket ask for redesignation. Rather, the commenters seem to be making an “if/then” proposal that if The MLC, Inc. improves its operations, including in some cases operating in an opposite manner to its current policies and practices, then The MLC, Inc. should be redesignated. Not wishing to speak for any commenter, let it just be said that this appears to be a conditional proposal for redesignation. Maybe that is not what the commenters were thinking, but it does appear to be what many of them are saying.
Today’s comment is jointly filed by the Songwriters Guild of America (SGA), the Society of Composers & Lyricists (SCL), and Music Creators North America (MCNA), who advocate for independent songwriters in contrast to the powers that be. (For clarity, the three groups in their comment refer to themselves together as the “Independent Music Creators”.)
For purposes of these posts, we may quote sections of comments out of sequence but in context. We recommend that you read their thoughtful and detailed joint comments in their entirety. You can read the joint comment at this link.
[The Current Crisis with Spotify]
Prior to proceeding to the presentation of our Comments, we are compelled by recent events and circumstances to issue the following, important caveat. Just days ago, the National Music Publishers Association (“NMPA”) announced its apparent intention to seek fundamental legislative changes to the US Copyright Act in regard to the statutory mechanical licensing system established under the Music Modernization Act (“MMA”) (the legislation that resulted in the creation of the MLC and the DLC). This complete reversal in NMPA policy is the result of repugnant actions on the part of the digital music distributor “Spotify” to minimize its royalty payment obligations by identifying and exploiting alleged loopholes in what many view as the unevenly negotiated and drafted Phonorecords IV settlement. The Independent Music Creators previously voiced formal opposition to the details of that settlement prior to its ratification and adoption by the US Copyright Royalty Board at NMPA’s urging in December, 2022.
This morass, which threatens to deprive music creators of hundreds of millions of dollars in royalties over the next five years, is made even more complex by the fact that both NMPA and the MLC are served by the same team of legal advisors. Those same legal advisors also counseled NMPA on the negotiation of the Phonorecords IV settlement, which the MLC (albeit through another set of litigators) is now seeking to enforce against Spotify in federal court (an action we support), and which NMPA is now essentially seeking to vacate through Congressional action to eliminate statutory mechanical licensing via an opt-out system (which predictably favors the major music publishing conglomerates over creators and small music publishers).
The general idea of eliminating statutory mechanical licensing, the revival of which movement may now unfortunately be viewed as a fig leaf to camouflage poor NMPA decision-making and execution regarding the Phonorecords IV settlement, is one that the Independent Music Creators and many members of the music publishing sector have long believed should receive serious consideration. We will support such legislative reforms if fairly framed and developed with meaningful independent music creator input, along with pursuing our own legislative proposals expressed below. For now, however, this entire situation could hardly be less transparent or conducive to quick resolution than it currently remains.
In short, neither the Independent Music Creators nor any other groups of interested parties can possibly develop complete and cogent opinions on the issue of re-designation of the MLC and DLC without having greater access to the full body of facts surrounding this crucial new development regarding Spotify. These Comments, therefore, must be viewed against the backdrop of an unresolved and economically crucial dispute, the fallout from and resolution of which may completely alter the views expressed herein in the immediate future. As such, we look forward to making further comments on this issue as additional facts are disclosed concerning the Spotify/MLC/NMPA relationships and conflicts (past and present).
MLC Board Composition: It bears further re-emphasis that most if not all of these suggested changes have been necessitated by the actions of the corporate-dominated MLC board, including the structure established by the MMA that allocates ten board seats to corporate music publishing entities (which in practice automatically grants control of the MLC board and of the entire organization to the three “major” publishers that together administer more than two-thirds of the world’s musical composition copyrights) compared with just four music creator board member seats. Under such circumstances, music creator board members are virtually powerless to effect influence over the board’s actions and MLC policy, and are relegated to serving merely as an amen chorus in support of every MLC-related music publisher action and demand. This system of publisher majority rule is contrary to the structures and rules of government-sanctioned royalty collectives everywhere else in the world. To our knowledge, no similar royalty and licensing collective in the world is controlled by a board with less than fifty percent music creator representation.
The sound of this figurative rubber stamp within the MLC boardroom is further amplified by the fact that since inception, the non-voting seat set aside for music creator organizational input has been occupied by a non-creator whose organization’s allegiance to following in lock step with the music publishing industry is so obvious as to be beyond rational dispute. Thus, the current reality is total, corporate music publisher influence and domination of MLC’s rules and policies. This, despite the fact that the MMA as codified in section 115 of the US Copyright Act specifically mandates that the music creator organizational seat be occupied by the representative of “a nationally recognized nonprofit trade association whose primary mission is advocacy on behalf of songwriters in the United States.” This situation must change.
The Trichordist 
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