In this comment to the Copyright Office, Abby North (independent publisher and Artist Rights Symposium III Moderator) calls on the Copyright Office to stop the MLC quango from unilaterally establishing “business rules” that hurt songwriters and their heirs and protect working families from these arbitrary actions of The MLC. The passing of Jeff Beck reminds us once again that we must take care to protect the heirs of creators.
Read the original comment here on Regulations.gov
January 5, 2023
Via Electronic Delivery
Comments of Abby North
Docket No. 2022-5
Re: Termination Rights and the Music Modernization Act’s Blanket License
To the United States Copyright Office:
My name is Abby North. I am a music publishing administrator based in Los Angeles. My views expressed in this letter are solely my own.
With my husband, I am a copyright owner of the classic song “Unchained Melody,” among other copyrights. I also administer musical works and sound recordings on behalf of songwriters, their families and heirs. In many instances, I assist my clients in identifying their termination windows, assist in the research required, and interface with the attorneys who process termination filings.
I’m thankful for the opportunity to submit comments in support of the Copyright Office’s proposed rule.
The ability to recapture rights via the United States copyright termination system truly provides composers, songwriters and recording artists and their heirs, a “second bite of the apple.” Many of my clients exercise this right, and in doing so grow their family’s revenue, which, given today’s inflation and very high interest rates, coupled with a depleted stock market, is absolutely necessary.
Allyn Ferguson was a successful composer of film/television scores including “Little Lord Fauntleroy,” “Les Miserables,” “Charlie’s Angels,” and “Barney Miller.” According to Variety in its June 27, 2010 obituary, Ferguson was “among the most prolific composers of TV in the past 40 years.” My company North Music Group administers works controlled by Ferguson’s family.
In addition to his scores, Ferguson wrote songs performed by artists including Johnny Mathis, Count Basie Band and Freddie Hubbard. While the bulk of his film and television scores were created on a work for hire basis, and therefore are not eligible for termination under US copyright law, Ferguson’s commercial compositions and songs were not created as works for hire. Ferguson’s family has been able to exercise its termination rights in various musical works,
thereby increasing its earnings as it now collects the publisher share of United States royalties generated by the terminated works. Individual songwriters and composers and their heirs are not copyright aggregators. Every musical work, and every penny generated is very necessary to these families.
The Music Modernization Act created the blanket digital mechanical license. This move from one-off copyright licenses to a blanket license was a dramatic improvement in US mechanical licensing. However, the suggestion that rights held at the inception of this blanket license might remain, in perpetuity, with the original copyright grantee was frightening. I concur with the Office’s proposed rule and legal analysis of the relevant statutes and authorities.
I appreciate the Office requesting comments on the mechanics of solving the payment issues, because for the independent publishers I speak with and for me personally, many operational questions arise regularly regarding The MLC’s uncharted territories.
As one of The MLC’s statutory goals is to provide transparency to songwriters and copyrightowners, I would ask that the Office require The MLC to notify copyright owners (1) if The MLC’s unilateral termination policy has already been imposed on payments previously paid or that are being held in the historical or current black box, and (2) when the adjusting payment required by the proposed rule had been made.
To be clear, this rule must absolutely be retroactive to inception date of The MLC. Beyond the simple, clarifying amendment to the MMA, I believe there are additional, related issues that must be resolved:
1) What is The MLC’s “business rule” regarding the MLC/HFA Song Code for the terminated work? Prior to the inception of The MLC, the Harry Fox Agency would assign one HFA Song Code fr the work and its pre-termination parties, and a different HFA Song Code for the work with the post-termination parties.
What happens now? Do these multiple HFA Song Codes remain in The MLC’s database? Will there continue to be two separate MLC/HFA Song Codes, particularly given the Harry Fox Agency continues to license physical and download mechanicals on behalf of many publishers? Is it reasonable for the HFA Song Code to be the same as The MLC Song Code, when there is no derivative works exception in Section 115?
2) Which party is entitled to the Unmatched (Black Box) royalties, the related interest fees and to The MLC’s investment proceeds for a terminated work?
Finally, it should be noted that the initial concept proposed by The MLC Board (that the server fixation date should impact termination dates) most likely would have served large publishers, not songwriters.
It is crucial that the Copyright Office exercise vigilant oversight and governance of The MLC’s reporting regarding any payment obligations to copyright owners. Specifically, composers, songwriters and their heirs must have as significant a voice as the largest publishers and copyright aggregators.
Additionally, in the spirit of full transparency, I request full disclosure of board or committee votes, minutes of meetings or other documentation of process. For me and others like me, this would tremendously enhance our understanding of The MLC.
Decisions are being made by The MLC’s board and committee members, while the general MLC member or songwriters have no mechanism to gain information regarding the discussions, the decisions and the implementations thereof. Access to minutes and notes would provide valuable insights to the general membership.
I applaud the Copyright Office for moving swiftly to create this rule and clarify and codify how The MLC must treat copyright terminations. It is important that this rule be dictated by the Office as it is absolutely not The MLC’s job todecide who controls rights and is entitled to collect royalties.
That said, a “business rule” established by The MLC could have the effect of law absent vigilance by the Copyright Office.
On behalf of my family and clients, I wholeheartedly support this proposed regulation, and I truly appreciate the Copyright Office’s consideration of my comments.
North Music Group LLC@northmusicgroup Calls Out The MLC’s Ability to Make “Law” Through Business Rules that Hurt Songwriters and Skew the Black Box to Benefit Majors — Artist Rights Watch–News for the Artist Rights Advocacy Community — Music Technology Policy
Tag: The MLC
Songwriters and Publishers Ask the MLC: Where’s my money?–MusicTechPolicy
By Chris Castle
If anyone connected to The Mechanical Licensing Collective, Inc. quango brings up the $424,000,000 black box payment that the MLC received in February as part of services claiming their safe harbor under the Music Modernization Act Title I giveaway, it’s usually in the context of claiming credit for the payment as in “Aren’t we great, we got the services to pay $424,000,000 of black box money owed to songwriters.” (Followed shortly by so where’s my bonus?)
Notice what’s not mentioned in that sentence? True, some services paid some money to the MLC which was required by Title I in order for the major infringers like Spotify to enjoy yet another safe harbor. But the payment was not made to songwriters or publishers–it was made to the MLC quango, which is where it sits today, seven months later.
How could this be, you say? Very simple. Nobody made sure that the MLC was in a position to pay the money out before they took the money in. This is the kind of thing that you would make sure is tied down in the two-plus years the MLC was operational before they got the money. You know, like when did Noah build the Ark? Before the rain.
This is the kind of thing you might expect to be mentioned in the MLC’s annual report which was due June 30 but seems to have been delayed. What should have happened, of course, is that the Copyright Office in its supposed oversight role for the MLC quango should be closely reviewing MLC’s progress with paying out a half billion of other people’s money. This is what you would expect from a bit-in-the mouth hard-driving approach to oversight of hundreds of millions that Congress tasked to the Copyright Office.
Ask yourself (or maybe the Library of Congress Inspector General) whether you think that a pre-New Deal federal agency that has never had enforcement powers is culturally suited to the kind of rigorous prosecution that the oversight role requires? Having created the MLC self-licking ice cream cone, does anyone seriously think that the Copyright Office will rock the boat, particularly when the lawyers seem very interested in landing a job at Spotify (regulated by the Copyright Office) or the National Association of Broadcasters both of which have an ontologically hostile relationship with songwriters? Do you think anyone at the MLC is looking over their shoulder because they’re afraid of the Copyright Office? And if they don’t fear the oversight, what incentive do they have? Nobody else will be twisting their arms.
So should it come as a surprise to anyone that people are asking “where’s my money?” Or that no one is answering?
The Metadata Hot Potato: The MLC Enters the Jerry McGuire Reality
By Chris Castle
Here it is: Today is the day that the MLC is required to send out their first round of statements and payments. The deadline they gave themselves when their wrote their law.
The MLC is about to hear those beautiful words. They will hear it in English. They will hear it in Spanish. They will hear it in Bantu, French, Portuguese, Pashto, Russian, Hausa, Berber and Czech.
And songwriters will say it like they mean it. They won’t want to hear about “connect to collect” they won’t want to hear about “play your part” or the ontological definition of “match.”
They will say just one thing–show me. The MLC will hear it on the phone, in email, maybe even in person. And songwriters will want to hear everyone at MLC say those magic words. Loud. The family motto. A very personal and important thing. It should be said with conviction maybe even shouted from the rooftops.
No more hot potato. And while it may start with MLC it won’t end there. If the services think they are off the hook, there’s just one thing to say. Are you ready? You know what it is.
The money. They got it, we want it, now show it. Very simple.
But just in case it doesn’t all go swimmingly on April 15, it might be time to start thinking about drafting an affirmative obligation on your publisher to take care of any bad data in your publishing or administration agreements (or at least try–let me know how far you get). Most of what I’ve heard anecdotally about the quality of the MLC public database leads me to think that songwriters think the publisher is registering their songs correctly at the MLC. So why not put it in writing?
If you don’t, that hot potato will just keep on bouncing around if there’s not a clear place where the buck stops. The services will blame the MLC, the MLC will say you didn’t connect to collect to play your part, your publisher will blame the MLC, and round and round and round it goes.
You know what you tell them, right? The family motto.
Please take our Mechanical Licensing Collective Survey
Please take a moment and complete the ArtistRightsWatch new anonymous 10 question survey regarding The MLC at this link. We’re gathering general anonymized information about how songwriters and publishers have heard about The MLC and whether you think an independent advocate (or an “ombudsman”) would be useful to you. This will help us plan future programming and input.
The survey is available to everyone and will be open until January 31, 2021.
Curiouser and Curiouser: Strange Loose Ends with Apple Music and The MLC
[Guest post by Chris Castle. This post first appeared on MusicTechPolicy. This is interesting because songwriters don’t often see shenanigans from Apple Music but it is probably due to the overpowering litigation magnet of the MMA. Put this in The MLC redesignation file]
Here’s an update on the bizarre saga of Apple Music and The MLC. Remember that HFA sent to its publishers this termination notice from Apple Music on Apple’s lyric and cloud services licenses (and assume for the moment it was also sent to other non-HFA publishers):
This is remarkable because the Music Modernization Act limits the kind of licenses that the MLC can administer because the blanket license only applies to a limited number of activities (on demand streaming, limited downloads and permanent downloads). It does not apply to lyric licenses or cloud services because the blanket license is not available for those rights. Those rights would still need to be licensed under the very type of agreements that Apple is terminating.
This question came up during a recent MLC webinar moderated by MLC executives Kris Ahrend (CEO) and Serona Elton (Head of Educational Partnerships). These two executives were asked the obvious question, how can The MLC do lyric licensing for Apple. An eagle eyed MTP reader sent this screen capture from the chat:
So you have to ask, if The MLC can’t license lyrics, why did Apple terminate their lyric licenses and transfer to The MLC? And what does “separately from us” mean? The answer is not really responsive to the question.
Separately from us could easily mean that while The MLC is not licensing lyrics, some other entity is. (Presumably the lyrics are from songs that are subject to the blanket license so the MLC would play a role.) Remember that the termination notice came from HFA. Could it be that “separately from us” means HFA would be issuing a side by side lyric license on behalf of its publishers?
And remember that the notice from Apple includes this language:
[W]e intend to move our licensing and royalty administration for Apple Music to the MLC starting from January 1, 2021.
Congress did not intend that The MLC offer licensing and royalty administration for DMPs like Apple. That would mean that The MLC would be paying itself for Apple’s blanket activities. That is what HFA does through a rather porous ethical wall (and for which they have been at the center of two class actions and numerous copyright infringement lawsuits and are currently a co-defendant with Spotify in another post-MMA lawsuit).
It has long been assumed that somehow some way The MLC intends to offer bundled licensing which is currently prohibited. Bundled licensing could take the form of performances, ex-US rights, sync, even general licensing.
It seems like that effort is quietly underway. What is an alternative explanation for Apple terminating a large number of agreements and transferring its licensing and royalty administration functions to The MLC? Is the plan that The MLC gets the business and HFA does the work that The MLC is prohibited by statute from performing (at least until they move the goalposts again)?
This does help to explain why there is no MLC database and all The MLC’s “data quality initiative” corrections and improvements are being performed on the HFA database (which HFA owns and will use for work not limited to the blanket license).
Curiouser and curiouser.
@digitalmusicnws Asks Is the MLC Putting Smaller Streaming Platforms Out of Business? — ArtistRightsWatch
By Editor Charlie
Dylan Smith at Digital Music News asks the question, “Is the MLC Putting Smaller Streaming Platforms out of Business?” We’ve raised this very question long, long ago, back in early 2018 when the Music Modernization Act was getting passed and the chorus of braying by MLC supporters was at a fever pitch. Everyone ignored the obvious flaws in the legislation, especially the anticompetitive nuances that Dylan has highlighted today.
But understand–this issue is not new. We raised it in the blogs, and Chris raised it to Congressional staff directly–he said the response was a hangdog “I know, I know. It’s what the parties wanted.”
In other words, Congressional staff knew it was stupid, but were being railroaded into doing it anyway by “the parties” (plural) and there are so many hours in the day. When staff said “the parties” back in 2018 before there was an MLC, guess who they meant? One of those parties was the Digital Media Association which still runs the “Digital Licensee Coordinator” or the DLC–which is essentially the companies with trillion-dollar market caps who we think of as Big Tech. (The DLC’s membership application is here.)
And as you will see, it’s more like is the DLC putting smaller streaming platforms out of business. (See the DLC membership assessment fees “explainer” for DLC members.)
And since the DLC appears dominated by Google, Amazon and Spotify, maybe the real issue is that it’s Thursday, so of course Big Tech wants to keep competition weak and vulnerable to being shut down or acquired. And the MLC and its promoters did nothing to stop it because of the pact between the MLC and the DLC that they would each keep anyone out of the vicinity of the Copyright Royalty Judges who might get in their way.
Of course the most ludicrous part of this is that these trillion-dollar companies don’t just eat the cost of running the DLC since by the time you get finished reading this post, they will have collectively grossed some sum well, well in excess of the annual operating costs.
But–as we will see, there may be some hope for brave startups to challenge the insider deal that penalizes them without giving them an opportunity to speak up for themselves.
As Dylan writes in DMN:
According to the document [establishing the insiders’ allocation of the fee structure], digital service providers have to cover the MLC’s startup fee ($33.5 million) via a “startup assessment,” or “the one-time administrative assessment for the startup phase of the Mechanical Licensing Collective.” This payment must be made alongside the first annual bill, which is due on February 15th, 2021; the second annual fee disclosure is due in November of the same year and must be paid by January of 2022, for a considerable overall obligation.
Total-wise, platforms “that have a Unique Sound Recordings Count” – or the average number of “royalty-bearing” works streamed or downloaded each month – of less than 5,000 will pay an annual minimum fee of $5,000, to a $60,000 annual minimum fee for those with over 5,000 such works. For DSPs that break the 5,000 threshold, it appears that 2021 will bring with it a low-end bill of $120,000.
Significantly, our source proceeded to indicate: “That’s just the minimum – the total assessment is dependent on market share, which is basically unpredictable at this point. And that’s on top of mechanical royalties for those who use the blanket license.”
This completely out of whack cost structure was obviously a major, major flaw in the Music Modernization Act–specifically the incredibly muddled and meandering Title I which established the Mechanical Licensing Collective and the DLC. The chickens are now coming home to roost.
As Chris wrote in Newsmax Finance on August 20, 2018:
[T]he problem [with the MMA] doesn’t come from songwriters. It comes from the real rule makers—Amazon, Apple, Facebook, Google and Spotify. And startups know which side butters their bread.
Public discussion of MMA has focused on the song collective and the compulsory blanket license for songs, but the mandated digital services collective is more troubling given the size of the players involved…Rule taker startups are governed by the rule maker DLC, but have no say in the DLC’s selection.
Like Microsoft’s anonymous amici, startups know their place —especially against Google, Amazon, and Facebook, whose monopoly bear hug on startups includes hosting, advertising and driving traffic.
The MMA authorizes these aggressive incumbents to effectively decide the price to startups for the “modernized” blanket license. Why? Because the MMA requires users of the license to pay for the lion’s share of the “administrative assessment,” the licensees’ collectivized administrative cost payment that the CBO estimates will be over $222 million for eight years….
Why should the government only permit one game in town? Rather than have the DLC run by the usual suspect monopolists, why not allow competition?
This is important–if startups can’t afford to buy-in to the license, it does them no good, and their biggest competitors decide the price of that license through the DLC.…
“Modernization” should make licensing easier: level the playing field for startups and protect them from famously predatory competitor incumbents, as well as copyright infringement lawsuits from the rule takers.
These are all good reasons for the private market solution. Competition at least gives startups hope for the pursuit of fair treatment.
“The parties” and everyone else ignored this warning (and of course, since it wasn’t included in a press release, the trade press did no investigation). This is exactly what Dylan is focused on in DMN. It was only a matter of time until the invoice for startups came due.
That invoice arrived as part of the “administrative assessment” hearing mandated by Congress in Title I. This is a curious procedure before the Copyright Royalty Judges that expressly excluded anyone from participating who might get in the way of the check that would reunite the Harry Fox Agency with its former owners. That order by the CRJs is the document that Dylan links to.
In a blog post at the time on MTP, Chris drilled down on the nuances of this settlement for the administrative assessment (which is what gives teeth to the mechanism to sandbag startups:
Notice two things: First, the CRJs’ adopt the position of the MLC and the DLC that the only people who could object to the settlement were “participants”. Who might that be? Why the DLC and the MLC, of course. There were other participants, most prominently the Songwriters Guild of America. SGA was hounded out of the proceeding because the MLC apparently did not want to include SGA in the negotiation of a settlement.
I can understand the complexity of a three-way negotiation with those pesky songwriters about a matter that affects all the songwriters in the world who have ever written a song or that may ever write a song. Those songwriters might really get in the way. What I do not understand, however, is why the songwriters would not be afforded the opportunity to at least comment on the settlement that carries the awesome power of the Leviathan behind it. I do understand how the rules came to be written the way they are, however.
And this leads to the other thing to observe about this ruling. “Because there were no non-settling participants…the proposed settlement was unopposed.” Rather tautological, right? How can the settlement be opposed if those who might oppose it are not allowed to do so?
Let’s be clear what “opposition” means in this context. You could just as easily say “improve” or “make fair”. And lest you think that this is yet another example of sloppy legislative drafting in the mistake-prone Title I, this time I don’t think it’s a mistake. I think it is exactly what the drafters intended.
This is all pretty darkly typical swampy behavior by the insiders and their lobbyists dedicated to lawyering their way to an unfair court order masquerading as a good thing for songwriters. Of course.
Here’s the ray of sunshine:
After the world “unopposed” the CRJs drop a footnote. And it is this footnote that is probably the most important point to the unrepresented songwriters and startups who either couldn’t afford to participate or who were afraid of back alley retaliation if they did.
“The Judges have been advised by their staff that some members of the public sent emails to the Copyright Royalty Board seeking to comment on the proposed settlement agreement.Neither the Copyright Act, nor the regulations adopted thereunder, provide for submission or consideration of comments on a proposed settlement by non-participants in an administrative assessment proceeding. Consequently, as a matter of law, the Judges could not, and did not, consider these ex parte communications in deciding whether to approve the proposed settlement. Additionally, the Judges’ non-consideration of these ex parte communications does not: (i) imply any opinion by the Judges as to the substantive merits of any statements contained in such communications; or (ii) reflect any inability of the Judges to question, [on their own motion without a filing from a participant] whether good cause exists to adopt a settlement and to then utilize all express or reasonably implied statutory authority granted to them to make a determination as to the existence…of good cause [to reject the settlement now or in the future].“
This footnote is very, very important. I would interpret it to mean that the CRJs may anticipate that they are directly or indirectly appealed or their decision is examined by the Congress that has ultimate oversight.
Note that the Judges clearly anticipate reviewing the assessment for “good cause” without a filling from the DLC or the MLC. It’s not clear exactly how that might happen, but it might be as simple as a startup complaining to the CRJs in an email.
So it seems to us that it’s only an MLC issue in that both the MLC and the DLC are each complicit in keeping outsiders away from the decisions about the administrative assessment and how it will be tagged to startups or smaller services. You know, “the parties” decided how the little people are to make do.
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
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.
Copyright Office Regulates The MLC: Selected Public Comments on the Copyright Office Black Box Study: The DLC Spills the Beans, Part 3
[Read Part 2 here. This is the last of 3 parts]
The services tell us in their Copyright Office comment that the whole point of the Music Modernization Act was this (largely secret) deal to get them a new retroactive safe harbor so their massive infringement couldn’t be stopped by songwriters. (That’s their third statutory safe harbor counting DMCA and Section 230.) What do you think that MMA safe harbor is worth to them to avoid what they call “ruinous litigation”?
Let’s use Spotify’s market cap as a proxy for the value of the safe harbor–imperfect, yes, but at least it is transparent unlike anything else having to do with Title I of the MMA.
Around October of 2018 when the MMA was signed into law, Spotify traded at $189. A recent closing price for SPOT is $268. Is it fair to say that the MMA was the rocket fuel that made Daniel Ek a billionaire? Not entirely. You can see from the graph that Spotify actually broke through a $190 per share support level to the downside right after the MMA was signed and bounced around below that price for a year or more.
The clear driver of Spotify CEO for Life Daniel Ek’s wealth and profiteering is the COVID virus. Make no mistake, human misery–not the MMA safe harbor–is what provided the rocket fuel for Spotify’s 2020 growth. In fact, the same rocket fuel of misery seems to have benefited each of the exploitative cohort as this graph shows using Live Nation as a proxy for the collapse of touring:
So it could be said that the entire “ruinous litigation” argument from the DLC is simply so much bullshit that these companies fed to the MMA negotiators by the plateful. What is not bullshit, however, is that the one thing the negotiators could have scored that they didn’t is a waiver of the services appeal rights in the Phonorecords III rate setting decision. This is the appeal that the services recently won when the appeals court handed the negotiators heads to them. There could also have been a settlement since they seem to like those so much. The negotiators didn’t do either. We’ll see how the do-over turns out, but one thing we know is that there will be millions in legal fees that songwriters will have to eat one way or another that could easily have been avoided.
What is also not bullshit is the other side of the MMA transaction: The loss to songwriters of this heretofore secret deal.
You will note that none of the music services appear to have paid out jack in the way of newly matching the previously “unmatched” in the years since the signing of the MMA. Why? Because the MMA negotiators did not require any interim payments of matched funds or any public reconciliation of black box to matching efforts. No, no, the first time the black box gets disclosed publicly is when those funds are paid to the MLC, not to the songwriters who earned the money. Round and round and round it goes, and where it stops, nobody knows.
If you believe as we do that the services have not lifted a finger to increase their matching efforts (and based on the DLC’s disclosures seem to have already paid out pre-MMA black box on a market share basis), you will better understand why we think this was a colossally terrible deal for songwriters. You will also understand why this part of it was largely kept secret or downplayed.
The Eight Mile Style complaint against Spotify and the Harry Fox Agency (which is the same Harry Fox Agency that is now going to be handing your royalties for The MLC, how curious) has an informative passage about the timing of this retroactive safe harbor:
In addition, the retroactive elimination of the right to profits attributable to infringement, statutory damages, and attorneys’ fees under the MMA is an unconstitutional denial of substantive and procedural due process, and an unconstitutional taking of Eight Mile’s vested property right, and this Court should so declare.
It is settled law that an infringement claim is a property right that vests in a plaintiff the moment the infringement occurs. The Bill that ultimately became the MMA, written by the NMPA, with input from Spotify, became law in October 2018, but provides retroactively that a plaintiff who did not file an action by December 31, 2017, could lose any right to profits attributable to infringement, statutory damages, and attorneys’ fees if successful in a case against Spotify or other DMPs of interactive streams. On information and belief, the MMA, according to the NMPA’s own announcements, lobbyist spending, and congressional testimony on Capitol Hill, was jointly crafted by members of the NMPA (whose three top markets shares and dues-paying affiliated companies own equity in Spotify) and Spotify, DiMA, and other interactive streaming companies.
They knew what they were doing….
[W]ith the removal of these remedies, it cleared the last hurdle for Spotify to go public, thereby reaping tens of billions of dollars for its equity owners, including the major music companies as mentioned above. The unconstitutional taking of Eight Mile’s and others’ vested property right was not for public use but instead for the private gain of private companies.
The reference to timing on Spotify “going public” means Spotify filing their “DPO” to sell stock on the public markets–the really big money. That’s relevant to the MMA negotiation because the MMA bill was introduced on December 21, 2017. Spotify filed a confidential paper with the Securities and Exhange Commission on January 3, 2018 and Spotify’s stock started trading on April 3, 2018. The MMA allowed them to show the markets that they were doing something about their systemic copyright infringement problem and gave fuel to the specious argument that lawsuits against them were merely opportunistic gotcha lawsuits and not a bellweather for their utter incompetence and cavalier treatment of songwriters.
Why is this timing important? Because the MMA was filed on December 21. What happened on December 22? Congress closed for the holidays and would not reopen until after January 1, 2018. That meant there would not be an official version of the bill until after January 1, 2018, the deadline to sue before the retroactive safe harbor would eventually take effect. Various copies leaked, but since the entire music industry was also shut down for the holidays, it was unlikely that any songwriters would see it, particularly because we can’t find that their so-called “representatives” ever brought it up in any public messaging before the January 1 deadline had passed.
Do you think that timing is a coincidence?
As Eight Mile Style tells us:
The proof is in the pudding: Spotify was sued many times prior to December 31, 2017, for similar acts of copyright infringement as alleged herein, but not once since December 31, 2017. This is because the Bill that ultimately became the MMA first publicly leaked shortly before December, 2017, leaving music publishers with little or no time to investigate or file a lawsuit for infringement, even if they somehow became aware of the Bill at that time.
It just happened that Wixen Music Publishing was already on a war footing from opposing the various Spotify settlements and was able to easily pivot to filing its own lawsuit against Spotify before the December 31, 2017 deadline in a move worthy of General Patton at Bastogne. But Wixen was alone. No one else probably even knew the deadline was passing or what it meant.
The value of what the “negotiators” gave away cannot realistically be measured for the reason that Eight Mile Style clearly states, which is also the same reason that the retroactive safe harbor is unconstitutional:
The only practical or realistic remedies in these cases is the statutory damage remedy, and profits attributable, together with the ability to receive attorneys’ fees, and the drafters of the MMA knew it. The elimination of these remedies takes away from Eight Mile and others who may be similarly situated any practical or realistic remedy, immunizes complying DMP’s from suit, and should be declared an unconstitutional deprivation of due process and a taking of a vested property right.
So what’s the value that songwriters gave up in the MMA? Wixen sued for $1.6 billion. You figure it out.
Is The MLC Updating the HFA Database?
The MLC announced an aspirational tool for publishers to confirm whether the MLC’s data is correct for their songs. Apparently this is planned to be a quality control check for song metadata that The MLC has already acquired. As far as we can tell, the tool doesn’t actually exist yet.
Here’s the press release language:
For Music Publishers, Administrators and CMOs: Data Quality Initiative (DQI)
The MLC created the Data Quality Initiative (DQI) to provide a streamlined way for music publishers, administrators and foreign collective management organizations (CMOs) to compare large schedules of their musical works’ data against The MLC’s data. Through the DQI, The MLC will provide participants with reports that highlight the discrepancies between the two sets of data so that they can more easily address those discrepancies and improve the quality of The MLC’s data.
The MLC has begun working directly with a number of music publishers and administrators to on-board them into the initiative. The MLC is also working with software vendors to help them enhance their platforms to enable users of their systems to participate in the initiative. The MLC looks forward to working with other music publishers, administrators, CMOs and software system vendors interested in participating in The MLC’s Data Quality Initiative.
“One of the biggest and most time-consuming challenges for music publishers, administrators and CMOs is checking the accuracy of their musical works’ data,” said Richard Thompson, CIO of The MLC. “We launched the Data Quality Initiative to help those parties increase the efficiency and effectiveness of this process. Participants in the initiative will be able to see where their musical works data does not match The MLC’s data, so that they can then take the necessary corrective action.”
Of course, The MLC has yet to permit songwriters (or anyone for that matter) to register their songs with The MLC at least not publicly. Neither have they given anyone access to whatever data they actually have ingested–and still won’t with the DQI tools. When you use the DQI tool, you sit outside The MLC’s database and they give you “reports” so you may take “the necessary corrective action”. At your own expense, of course. You know, “Play Your Part On Your Dime to Keep Us Relevant.”
So if the goal of the Data Quality Initiative is for “The MLC [to] provide participants with reports that highlight the discrepancies between the two sets of data so that they can more easily address those discrepancies and improve the quality of The MLC’s data” we have to ask how did The MLC come to have any data to check for quality control in the first place?
Chances are pretty good that the source of The MLC’s data set is the Harry Fox Agency–if they’ve even bothered to copy the HFA data into The MLC’s database. (One reason they send you a “report” is so the source of that report is not disclosed as if it were just the HFA database being queried, it might raise some hackles among songwriters and especially the DLC who is paying millions for the whole show.)
As has been noted, The MLC’s Richard Thompson announced that The MLC was working with HFA since The MLC was first designated by the Copyright Office as the MLC. (even before they announced that HFA was their vendor) This is the HFA that services Spotify. Spotify has been sued…ahem…a number of times for failures to license songs in historic litigation that led to their latest get-out-of-jail-free goal-post-moving exercise also known as the Music Modernization Act. In fact, HFA is currently being sued alongside Spotify by Eminem’s publishers for all sorts of nasty things (which have yet to be proved). But make no mistake, HFA was picked as best of breed by everyone’s favorite MLC, The MLC.
So what The MLC is really saying here is that they want everyone to take the time to check your own data against the HFA database and then correct it. And who wants to bet that all those corrections–which could be a vast number of corrections and song-share updates–will end up back at HFA for HFA to use as it chooses (or its Rumblefish affiliate).
But wait, there’s more. Don’t forget: The reason for this exercise in data cleaning is to “improve the quality of The MLC’s data“. Why do you care about the quality of The MLC’s data? Very simple. The government makes you do it. What could be worse than a compulsory license? A compulsory license with a safe harbor for massive infringers like Spotify and an industry-wide market share black box controlled by the for-profit companies that most benefit from the market share black box.
So what The MLC is really saying is “play your part” to “improve the quality of The MLC’s data” or we will take your money and there’s sweet F-all that you can do about it. In the middle of a global pandemic. The truth doesn’t read quite so well, right? Oh, and by the way–you get to pay the costs of this data clean up job yourself even though it’s for the benefit of The MLC. And why are you compelled to cover those costs?
Because they’ll take your compulsory royalties if you don’t. And given the way these people work, maybe even if you do. How would you ever know?
But wait, there’s still more. Remember that the Eminem publisher’s case is about Spotify’s failure to match properly which is a condition of the MMA safe harbor that somebody decided was a good idea for the rest of us. Let’s say that those publishers are wrong and that the services have actually been matching like crazy to keep their safe harbor (albeit in the background because the sainted MMA does not have any oversight or transparency about matching).
We don’t believe this, of course. But let’s just say that they’re wrong for argument’s sake.
If The MLC got their data from the services instead of from HFA, then presumably all that matching being done by the biggest tech companies in human history would probably result in a greater match rate than HFA–particularly since HFA has been at the heart of many, many lawsuits against their clients for failing to match. Let’s face it–many, many publishers have already burned a huge amount of energy fixing Google’s weak Content Management System alone. Want to bet that CMS has a higher match rate than HFA?
So we don’t think that the song data that is being checked so you can “Play Your Part On Your Dime” is from anywhere but HFA. We also think that if no one stops them, The MLC will simply hand over all those corrections to HFA for use in its own database for unrelated clients, such as for bundled performance licenses. And who benefits from that besides HFA? If you said the publishers with direct deals on services that engage HFA or Rumblefish to handle their licensing, you probably would not be too far wrong.
Facebook Inc. has engaged HFA’s Rumblefish services to offer to publishers the opportunity to enter into a direct license agreement with Facebook for Facebook, Instagram, Messenger and Oculus. This opportunity is available to all publishers.
This license agreement will grant Facebook Inc. reproduction, display, synchronization, and public performance rights. As an HFA Affiliate you have already authorized HFA to act on behalf of your publisher with respect to licensing offers for the rights mentioned above other than performance, which means we need your written permission to accept this offer on your behalf.
So be sure to fire up that credit card and “Play Your Part”. And be quick about it. Your betters are waiting.
Guest Post: Who Owns The MLC Database of Songs?
[This is crossposted from MusicTech.Solutions and is adapted from the author’s comment to the Copyright Office in the MLC regulations.]
By Chris Castle
If you’ve been following the evolution of the “aircraft carrier” revision of the U.S. Copyright Act styled the “Music Modernization Act,” you will remember that America now has a blanket license for the mechanical reproduction of songs (or will have as of 1/1/21). The “MMA” comes in three parts (or as I say three and one-half):
- Title I which establishes the blanket license, a willing-buyer willing-seller standard for mechanical royalty rate setting, the Mechanical Licensing Collective (called the “MLC”), the all-important safe harbor for Big Tech’s massive infringement of songs, and authorized the creation of the “musical works database” which is the subject of this post;
- Title I-1/2 which gives certain small benefits to ASCAP and BMI;
- Title II which provides meaningful relief and largely fixes the pre-72 loophole that the Turtles sued over (formerly the CLASSICS Act); and
- Title III which gives producers a statutory basis for SoundExchange royalties, another truly meaningful change.
I supported Title II and Title III, but I have lots of bones to pick with Title I, not the least of which has to do with the musical works database. A lot of my issues have to do with what I perceive as sloppy drafting and a mad rush to “get a bill” at all costs which has led to a strong need to “fix” a lot of “glitches” in Title I itself (such as the failure to dovetail the major change in the compulsory mechanical from a per-song basis to a blanket basis. This in turn has an affect on other copyright provisions such as the termination right for songwriters which is now having to get solved–maybe–through the caulking of regulations to cover sloppy workmanship. (Caulk cracks.)
For those of us who sweep up behind the elephants in the circus of life, I fear that the musical works database of other people’s things is an 11th Century solution to a 21st Century problem–a list of things that will be very difficult to get right and even more difficult to keep right, not unlike William the Conqueror’s Domesday Book. Static lists of dynamic things necessarily are out of date the moment they are fixed.
Who Owns the Crowdsourced Musical Works Database?
We are going to discuss Title I musical works database today from a very simple threshold question: Who owns it?
Spoiler alert: The public owns it. This is logical, but like so many things in the drafting of Title I, the drafting is glitchy, which is what you call it if you’re in a good mood. I apocryphally attribute the term “glitch” when applied to massive Internet data breaches to the Fathers of the Internet who did not take care that the cracks were sealed (looking at you, Vint Cerf).
When you consider that the most valuable asset of the MLC is going to be the song database, ownership matters. This database of other people’s things must be created by the efforts of potentially hundreds of thousands of songwriters given no choice in the matter. It would be a bit much for the U.S. Congress to require all this only to enrich one U.S. corporation controlled by the U.S. publishers by leveraging a compulsory license to create a very valuable private asset. Particularly a database paid for by still other people that might then get taken and given to a replacement MLC. (There’s that “taken” word again.) That’s typically not what Congress does.
Ownership matters to the Digital Licensee Coordinator, too. Let’s also remember that on paper, the MLC does not pay a penny for the cost of its operations, including the creation of the database. The entire cost of the MLC’s operations is borne by the users of the blanket license through an organization called the Digital Licensee Coordinator. (If you’re thinking what’s with these names, I know, I know. Forget it, Jake, it’s Washington.)
This database ownership issue has been raised to authorities a couple times, and no one has answered it. I made it part of a recent comment I filed with the Copyright Office in the current rule making for regulations implementing Title I. Maybe they’ll get around to answering the question this time. After a while, you have to wonder why they have not.
The MLC’s Short Track Record on Ownership of Other People’s Things
A side note demonstrating both that ownership matters and that The MLC is thinking about ownership: a service mark registration for “The MLC”. (A service mark is a kind of trademark.) There is a difference between “the MLC” and “The MLC”. That’s because “the MLC” is the organization envisioned by the Congress that has to be redesignated (think “re-approved”) by the Copyright Office every five years. On the other hand, “The MLC” refers to “The MLC, Inc.” which is the corporation created by the super popular proponents of Title I who were designated the first MLC and who style themselves “The MLC” using the definite article. But if I told you that there was a difference between “the MLC” and “The MLC” would you find that confusing?
The clear implication of the definite article seems to be that they don’t envision any future in which they will not be the MLC, i.e., will not be redesignated. They also probably don’t envision a future where a different corporation would be designated the MLC and The MLC would be looking for something to do. Maybe they know something we don’t, but there it is.
This also raises some interesting trademark questions should The MLC seek to prevent a successor from trading under the name “MLC”, interesting enough to stop The MLC from claiming a proprietary interest in the statutory description. That mark is arguably descriptive and probably should be denied. In fact it’s so descriptive it actually asserts a private intellectual property interest in the statutory language that describes the organization created by statute. Sort of like asserting a trademark in “TVA” or “ICC” or “FOIA”.
Should Songwriters Bust a Move to Create Value for The MLC?
Let’s be clear about who owns the Congressional database. As you will see, the musical works database does not belong to either the MLC or The MLC. If there is any confusion about that, the Copyright Office should clear it up right away (which would save having to go to other avenues to do the same thing). There really isn’t a practical alternative to the Copyright Office jurisdiction. Congress gave the Copyright Office broad regulatory powers over the MLC (and, therefore, The MLC).
The public “musical works database” that Congress envisioned in Title I of the Music Modernization Act is largely a crowdsourced asset. Congress has asked the world’s songwriters or copyright owners to spend considerable time preparing their catalogs in whatever format The MLC and the DLC determine is good for The MLC (with the Office’s blessing through regulations). There inevitably will be quality control and accuracy review costs invested by the world’s songwriters and copyright owners in making sure that their catalogs are correctly reflected in the musical works database. “Copyright owners” may also include sound recording copyright owners asked to contribute their ISRCs or other data that they, too, have invested considerable expense in creating and maintaining.
Unfortunately, the transaction cost to the songwriter and copyright owner for participation in The MLC and crowdsourcing Congress’s database is an unfunded mandate at the moment. From a commercial perspective, the dynamic evolution of data is a potentially limitless expense, yet we have both this unfunded mandate which will spike in the early years but continue on a rolling basis essentially forever. Yet the MLC’s administrative assessment appears to be capped at a fixed increase by a settlement agreement. Again, a “glitch.” Still, The MLC’s executives seem positively giddy about their prospects with all the relief of someone who got tapped for lifetime employment with a pension (no doubt) while the songwriters these leaders are to serve are having the fight of their lives for survival.
What Did Congress Do? Or Not Do?
Yet, it seems clear that at the time of passing Title I, Congress had no intention of using a public law to create a private asset. Neither was their intention to use the law to leverage the creation of an asset for private ownership by whoever the head of the U.S. Copyright Office designated to be the MLC, regardless of how “popular” they might have been.
The creation of the musical works database is replete with hidden costs paid or incurred by songwriters and copyright owners. Neither the Congress nor the Copyright Royalty Judges were asked to directly address these hidden costs of creating the musical works database. (The Copyright Royalty Judges (or “CRJs”) are relevant because they approve the DLC’s financial contribution to the MLC through the “Administrative Assessment.” The assessment is intended to cover the “collective total costs” which includes broad categories of cost items related to the database.) And as usual, these costs appear to have gone straight over the heads of the Congressional Budget Office in their mandated assessment of the costs of Title I.
Even so, the MMA Conference Report from Congress addresses the cost issue head on:
The [Congress] rejects statements that copyright owners benefit from paying for the costs of collectives to administer compulsory licenses in lieu of a free market. Therefore, the legislation directs that licensees should bear the reasonable costs of establishing and operating the new mechanical licensing collective. This transfer of costs is not unlimited, however, since it is strongly cabined by the term ‘‘reasonable.’’
It will be impossible for the “new mechanical licensing collective” to fulfill its statutory duties or build the complete musical works database to which the United States aspires without songwriters and copyright owners around the world doing the intensive and costly spade work to prepare their data to be exported to The MLC. It is clear that the reasonable costs of preparing and exporting that data should be borne by The MLC as part of the “Administrative Assessment.” This material cost clearly is covered by the definition of “collective total costs” and so was, or should have been, included in the current Administrative Assessment, unless the intention was to cover The MLC’s side of these costs and force songwriters and copyright owners to eat their side of the same transaction. If that is the case, it would be helpful for the Copyright Office to clarify that intention in the name of transparency through their broad regulatory authority.
If there is another drafting glitch there, it is worth noting that the CRJs clearly contemplated revisiting the Administrative Assessment on their own motion for good cause. If there were ever good cause, the staggering cost of registering potentially millions of songs would be it.
It should be clear that no one’s intention was for the services to pay to create the musical works database and for the songwriters and copyright owners to labor to export their data to make the musical works database complete, only to have The MLC claim ownership of the musical works database, particularly if The MLC were not redesignated as the MLC following the five-year review by the Copyright Office. That unhappy “take my ball and go home” arbitrage event is foreseeable and would entirely cut against the “continuity” contemplated by Congress.
It is critical that the Copyright Office clarify in regulations that neither The MLC nor any other MLC owns the musical works database. In fact, the MMA clearly states that “if a new entity is designated as the mechanical licensing collective, [the Office shall] adopt regulations to govern the transfer of licenses, funds, records, data, and administrative responsibilities from the existing mechanical licensing collective to the new entity.” Since The MLC will have to transfer the musical works database and the other statutory materials to the new MLC if they fail to be redesignated, there should be no misconceptions that The MLC “owns” the database and could withhold all or part of it. Because The MLC is just An MLC.
It should also be made clear that any MLC or DLC vendor does not obtain an ownership interest in any copy of all or part of the musical works database they may obtain for any reason.
Again, just like the termination right “glitch”, these are threshold questions that should have been answered in the statute itself.
Clarifying ownership of The MLC’s most important asset should be an easy ask of the Copyright Office. Watch this space to find out if it is.
* * * * * * * * *
 Report and Section-by-Section Analysis of H.R. 1551 by the Chairmen and Ranking Members of Senate and House Judiciary Committees, at 1 (2018) at 2 (emphasis added).
 This effort is referred to as “Play Your Part™” a business process trademarked by The MLC available at https://themlc.com/preparing-2021.
 I would point out that the way The MLC should work—and in the end probably will end up functioning as a practical matter–is that The MLC needs to be able to handle however songwriters ingest their data. Instead, it appears that The MLC is trying to dictate to all the songwriters in the world how they should assemble their song data beforethey register with The MLC. If The MLC wants to shift that burden, they should expect to pay for it. Otherwise, this is exactly backwards.
 17 U.S.C. §115 (d)(7)(D). The Administrative Assessment is what makes the MLC different from other PROs or CMOs where members bear their own cost of participation. The Administrative Assessment is to cover the entire cost of creating the musical works database, not just The MLC’s startup or overhead costs. If nothing else, another way to treat these out of pocket costs is as a contribution to the operating costs of The MLC by songwriters and copyright owners that should be offset against future Administrative Assessments.
 17 U.S.C. § 115 (e)(6).
 Order Granting Participants’ Joint Motion to Adopt Proposed Regulations, In re Determination and Allocation of Initial Administrative Assessment to Fund Mechanical Licensing Collective (U.S. Copyright Royalty Judges Docket No. 19-CRB-0009-AA (Dec. 12, 2019)).
 The CRJs included this footnote in their ruling on the administrative assessment (emphasis added): “The Judges have been advised by their staff that some members of the public sent emails to the Copyright Royalty Board seeking to comment on the proposed settlement agreement. Neither the Copyright Act, nor the regulations adopted thereunder, provide for submission or consideration of comments on a proposed settlement by non-participants in an administrative assessment proceeding. Consequently, as a matter of law, the Judges could not, and did not, consider these ex parte communications in deciding whether to approve the proposed settlement. Additionally, the Judges’ non-consideration of these ex parte communications does not: (i) imply any opinion by the Judges as to the substantive merits of any statements contained in such communications; or (ii) reflect any inability of the Judges to question, [on their own motion without a filing from a participant] whether good cause exists to adopt a settlement and to then utilize all express or reasonably implied statutory authority granted to them to make a determination as to the existence…of good cause [to reject the settlement now or in the future].” Order Granting Participants’ Joint Motion to Adopt Proposed Regulations, In re Determination and Allocation of Initial Administrative Assessment to Fund Mechanical Licensing Collective (U.S. Copyright Royalty Judges Docket No. 19-CRB-0009-AA (Dec. 12, 2019) n.1 (emphasis added)).
 There is a simple solution to determining these costs to songwriters and copyright owners. The Copyright Office could designate several metadata companies who could compete to handle the various steps of creating and exporting metadata to The MLC, such as in the CWR format, for example North Music Group and Crunch Digital have such tools. To avoid picking winners and losers and to preserve competition, the Office could alternatively establish a benchmark of quality control or some other criteria for becoming an approved company. The costs charged would likely vary depending on the size of the catalog, but The MLC need only pay the invoice of these companies which would be included in the Administrative Assessment. Obviously, the entity performing such work should be independent of The MLC, the DLC or any of its members, or any of their respective vendors. This would, of course, introduce the concept of competition into the monopoly which may interest no one but might benefit everyone.
 See H. Rep. 115-651 (115th Cong. 2nd Sess. April 25, 2018) at 6 (hereafter “House Report”); S. Rep. 115-339 (115thCong. 2ndSess. Sept. 17, 2018) at 5 (together with identical language, hereafter “legislative history”) (“Although there is no guarantee of a continued designation by the collective, the Committee believes that continuity in the collective would be beneficial to copyright owners so long as the entity previously chosen to be the collective has regularly demonstrated its efficient and fair administration of the collective in a manner that respects varying interests and concerns. In contrast, evidence of fraud, waste, or abuse, including the failure to follow the relevant regulations adopted by the Copyright Office, over the prior five years should raise serious concerns within the Copyright Office as to whether that same entity has the administrative capabilities necessary to perform the required functions of the collective.”)
 17 U.S.C. § 115 (d)(3)(B)(ii)(A)(II).
 It seems that if an incumbent MLC that was not redesignated and continued to operate, it would almost unavoidably compete with the newly designated MLC but with a substantial leg up. I realize there have been some statements made about The MLC taking on work beyond the blanket license, such as voluntary licenses. That additional work might require additional investment, or a sharing of the total collective costs by third parties. I have not addressed that allocation as I for one would like to see The MLC stick to their knitting and succeed at the job they are obligated to do, and, frankly, paid to do, before worrying about expanding into profitable roles for the non-profit corporation. It does seem that if The MLC is not redesignated, there would not be much for them to do once they transfer the public’s assets to the new MLC.
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