Since there was no advance commitment or agreement on the budget for the Mechanical Licensing Collective (MLC) under Title I of the Music Modernization Act, it appears that the clock is ticking on an agreement before the parties have to go before the Copyright Royalty Judges to be told what the budget (or the “assessment”) is to be. The Copyright Royalty Board has beat the July 8 deadline for noticing the proceeding and has posted the notice and the rules for the hearing.
The “Notice announcing commencement of Initial Administrative Assessment proceeding and requesting Petitions to Participate” can be found here:
The regulations require the participation of the MLC and the Digital Licensee Coordinator (DLC) in the proceeding and permit the participation of copyright owners, digital music providers, and significant nonblanket licensees. 37 CFR 355.2(c)–(d).
The Judges hereby announce commencement of the proceeding, direct the MLC and the DLC to file Petitions to Participate, and request Petitions to Participate from any other eligible participant with a significant interest in the determination of the Initial Administrative Assessment…
Any participant that is an individual may represent herself or himself. All other participants must be represented by counsel….
Petitions to Participate and the filing fee are due on or before July 23, 2019.
The CRJ’s rules relating to the proceeding can be found here and have some relevant language relating to who can participate in addition to the MLC and DLC:
[T]he Judges believe that the views of other participants may be helpful, and perhaps essential, for the Judges to determine whether good cause exists to exercise their discretion to reject a settlement. The Judges, therefore, have modified [the regulations for the settlement negotiations and proceeding] to clarify that participants other than the MLC and DLC may participate in settlement negotiations and may comment on any resulting settlement.
[Editor Charlie sez: It appears that the pressure on the Copyright Office to supervise black box distribution practices by the conflict-ridden Mechanical Licensing Collective procedures has resulted in a commitment to hold the initial distribution until 2023. It is unclear if this also means that the designated MLC cannot offset its startup costs against the black box. As Ed Christman reported in Billboard on June 26, 2019 (“House Judiciary Hearing on Copyright Office Reviews Music Modernization Act, Black Box Royalty Concerns”) the Copyright Office intends to commence their best practices study after designating the MLC on July 8, which should give everyone an opportunity to weigh in on how the MLC should operate. Commenters could include the digital services who could voluntarily disclose the efforts that they and their outside vendors had in place during the period that the black box accrued.]
[U.S. Register of Copyrights Karen A.] Temple repeatedly assured the committee that the MMA gives the Copyright Office responsibility to distribute the black box money appropriately, noting that in addition to the agreement not to distribute before 2023, the Copyright Office has the responsibility to review the processes that the MLC is engaging to reduce black box money.
[Here is the code section from MMA about the Copyright Office study that appears to be the basis for regulations on the MLC’s distribution of unmatched funds, a study that may be the only time in a generation that songwriters get to be heard about these unmatched payments.]
UNCLAIMED ROYALTIES STUDY AND RECOMMENDATIONS.— (1) IN GENERAL.—Not later than 2 years after the date on which the Register of Copyrights initially designates the mechanical licensing collective under section 115(d)(3)(B)(i) of title 17, United States Code, as added by subsection (a)(4), the Register, in consultation with the Comptroller General of the United States, and after soliciting and reviewing comments and relevant information from music industry participants and other interested parties, shall submit to the Committee on the Judiciary of the Senate and the Committee on the Judiciary of the House of Representatives a report that recommends best practices that the collective may implement in order to— (A) identify and locate musical work copyright owners with unclaimed accrued royalties held by the collective; (B) encourage musical work copyright owners to claim the royalties of those owners; and (C) reduce the incidence of unclaimed royalties.
via MLC Candidates Agree to Hold Black Box Until 2023, Copyright Office to review unmatched distribution practices — Artist Rights Watch