Music Modernization Act Implementing Regulations for the Blanket License for Digital Uses and Mechanical Licensing Collective, 49966-49974 [2019-20318]
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Federal Register / Vol. 84, No. 185 / Tuesday, September 24, 2019 / Proposed Rules
National Energy Savings for GSILs and
GSIL alternatives; 30 Years of
Shipments (2023–2052)’’ with ‘‘Table
V.5—Cumulative National Energy
Savings for GSILs and GSIL alternatives;
30 Years of Shipments (2023–2052)’’;
6. On page 46853, in the 3rd column,
correct the 3rd sentence in the 1st
paragraph to read:
‘‘Table V.5 presents DOE’s projections
of the NES for each TSL considered for
GSILs, as well as considered GSIL
alternatives.’’;
7. On page 46853, in the 3rd column,
correct the 5th sentence in the 1st
paragraph to read:
‘‘In addition to GSIL energy savings,
Table V.5 illustrates the increased
energy consumption of consumers who
transition to out-of-scope lamps,
including CFL, LED, and incandescent
alternatives, because more consumers
purchase these lamps at TSL 1 relative
to the no-standards case.’’;
8. On page 46854, in the 3rd column,
correct the 1st sentence in the 1st
paragraph to read:
‘‘The NES sensitivity analysis results
based on a 9-year analytical period are
presented in Table V.6.’’;
9. On page 46854, in Table V.7—
Cumulative Net Present Value of
Quantifiable Consumer Benefits for
GSILs and GSIL Alternatives; 30 Years
of Shipments (2023–2052), replace the
values ‘‘5.436’’ and ‘‘4.173’’ in the
column headed ‘‘TSL 1’’ with ‘‘5.434’’
and ‘‘4.171’’ respectively;
10. On page 46855, in the 3rd column,
correct the 1st sentence in the 3rd
paragraph to read:
‘‘Table V.9 and Table V.10 present the
results of the industry cash flow
analysis for GSIL manufacturers under
the preservation of gross margin and the
technology specific markup scenarios.’’;
11. On page 46855, in Table V.9—
Manufacturer Impact Analysis for
GSILs—Preservation of Gross Margin
Markup Scenario, replace the values
‘‘(5.0)’’ and ‘‘(1.6)’’ in the column
headed ‘‘TSL 1’’ with ‘‘(5.3)’’ and
‘‘(1.7)’’ respectively;
12. On page 46856, in Table V.10—
Manufacturer Impact Analysis for
GSILs—Technology Specific Markup
Scenario, replace the value ‘‘(3.7)’’ in
the column headed ‘‘TSL 1’’ with
‘‘(3.9)’’;
13. On page 46856 in the 1st column,
correct the 1st sentence of the 1st
paragraph to read:
‘‘At TSL 1, DOE estimates that
impacts on INPV will range from ¥$5.3
million to ¥$3.9 million, or a change in
INPV of ¥1.7 to ¥1.2 percent.’’;
14. On page 46858, in the 1st column,
correct the 1st sentence in the 5th
paragraph to read:
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‘‘Under the consumer choice analysis,
the NPV of consumer benefits at TSL 1
would be $2.241 billion using a
discount rate of 7 percent, and $4.171
billion using a discount rate of 3
percent.’’; and
15. On page 46858 in the 2nd column,
correct the 4th sentence of the 1st
paragraph to read:
‘‘At TSL 1, DOE estimates that INPV
will decrease between $5.3 million to
$3.9 million, or a decrease in INPV of
1.7 to 1.2 percent.’’
Procedural Issues and Regulatory
Review
DOE has concluded that the initial
determinations made pursuant to the
various procedural requirements
applicable to the September 2019 NOPD
remain unchanged for this NOPD
technical correction. These initial
determinations are set forth in the
September 2019 NOPD. 84 FR 46830,
46858–46860.
Signed in Washington, DC, on September
10, 2019.
Alexander N. Fitzsimmons,
Acting Deputy Assistant Secretary For Energy
Efficiency, Energy Efficiency and Renewable
Energy.
[FR Doc. 2019–20399 Filed 9–23–19; 8:45 am]
BILLING CODE 6450–01–P
LIBRARY OF CONGRESS
U.S. Copyright Office
37 CFR Part 210
[Docket No. 2019–5]
Music Modernization Act Implementing
Regulations for the Blanket License for
Digital Uses and Mechanical Licensing
Collective
U.S. Copyright Office, Library
of Congress.
ACTION: Notification of inquiry.
AGENCY:
The U.S. Copyright Office is
issuing a notification of inquiry
regarding the Musical Works
Modernization Act, title I of the Orrin G.
Hatch–Bob Goodlatte Music
Modernization Act. Title I establishes a
blanket compulsory license, which
digital music providers may obtain to
make and deliver digital phonorecords
of musical works. The blanket license,
which will be administered by a
mechanical licensing collective, will
become available on January 1, 2021.
The MMA specifically directs the
Copyright Office to adopt a number of
regulations to govern the new blanket
licensing regime, including regulations
SUMMARY:
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regarding notices of license, notices of
nonblanket activity, usage reports and
adjustments, information to be included
in the mechanical licensing collective’s
database, database usability,
interoperability, and usage restrictions,
and the handling of confidential
information. The statute also vests the
Office with general authority to adopt
such regulations as may be necessary or
appropriate to effectuate this new
blanket licensing structure. To
promulgate these regulations, the Office
seeks public comment regarding the
subjects of inquiry discussed in this
notification.
Initial written comments must be
received no later than 11:59 p.m.
Eastern Time on November 8, 2019.
Written reply comments must be
received no later than 11:59 p.m.
Eastern Time on December 9, 2019.
ADDRESSES: For reasons of government
efficiency, the Copyright Office is using
the regulations.gov system for the
submission and posting of public
comments in this proceeding. All
comments are therefore to be submitted
electronically through regulations.gov.
Specific instructions for submitting
comments are available on the
Copyright Office’s website at https://
www.copyright.gov/rulemaking/mmaimplementation/. If electronic
submission of comments is not feasible
due to lack of access to a computer and/
or the internet, please contact the Office
using the contact information below for
special instructions.
FOR FURTHER INFORMATION CONTACT:
Regan A. Smith, General Counsel and
Associate Register of Copyrights, by
email at regans@copyright.gov, Anna
Chauvet, Associate General Counsel, by
email at achau@copyright.gov, or Jason
E. Sloan, Assistant General Counsel, by
email at jslo@copyright.gov. Each can be
contacted by telephone by calling (202)
707–8350.
SUPPLEMENTARY INFORMATION:
DATES:
I. Background
A. The Music Modernization Act and
the Copyright Office’s Regulatory
Authority
On October 11, 2018, the president
signed into law the Orrin G. Hatch–Bob
Goodlatte Music Modernization Act
(‘‘MMA’’).1 Title I of the MMA, the
Musical Works Modernization Act,
substantially modifies the compulsory
‘‘mechanical’’ license for making and
distributing phonorecords of
nondramatic musical works under 17
1 Public
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Law 115–264, 132 Stat. 3676 (2018).
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U.S.C. 115.2 Prior to the MMA, licensees
obtained a section 115 compulsory
license on a per-work, song-by-song
basis, by serving a notice of intention to
obtain a compulsory license (‘‘NOI’’) on
the relevant copyright owner (or filing it
with the Copyright Office if the Office’s
public records did not identify the
copyright owner) and then paying
applicable royalties accompanied by
accounting statements.3
The MMA amends this regime most
significantly by establishing a new
blanket compulsory license that digital
music providers may obtain to make
digital phonorecord deliveries (‘‘DPDs’’)
of musical works, including in the form
of permanent downloads, limited
downloads, or interactive streams
(referred to in the statute as ‘‘covered
activity,’’ where such activity qualifies
for a compulsory license).4 Instead of
licensing one song at a time by serving
NOIs on individual copyright owners,
the blanket license will cover all
musical works available for compulsory
licensing and will be centrally
administered by a mechanical licensing
collective (‘‘MLC’’), which has recently
been designated by the Register of
Copyrights.5 The blanket licensing
structure is designed to reduce the
transaction costs associated with songby-song licensing by commercial
services striving to offer ‘‘as much
music as possible,’’ while ‘‘ensuring fair
and timely payment to all creators’’ of
the musical works used on these digital
services.6 Under the MMA, the statutory
licensing of phonorecords that are not
DPDs (e.g., CDs, vinyl, tapes, and other
types of physical phonorecords)
continues to operate on a per-work,
song-by-song basis, the same as before.7
2 See S. Rep. No. 115–339, at 1–2 (2018); 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), https://
www.copyright.gov/legislation/mma_conference_
report.pdf (‘‘Conf. Rep.’’); see also H.R. Rep. No.
115–651, at 2 (2018) (detailing the House Judiciary
Committee’s efforts to review music copyright
laws).
3 See 17 U.S.C. 115(b)(1), (c)(5) (2017); U.S.
Copyright Office, Copyright and the Music
Marketplace 28–31 (2015), https://
www.copyright.gov/policy/musiclicensingstudy/
copyright-and-the-music-marketplace.pdf
(describing operation of prior section 115 license).
4 17 U.S.C. 115(d)(1), (e)(7); see H.R. Rep. No.
115–651, at 4–6 (describing operation of the blanket
license and the mechanical licensing collective); S.
Rep. No. 115–339, at 3–6 (same).
5 17 U.S.C. 115(d)(1), (3); 84 FR 32274 (July 8,
2019).
6 S. Rep. No. 115–339, at 4, 8.
7 17 U.S.C. 115(b)(1); see H.R. Rep. No. 115–651,
at 3 (noting ‘‘[t]his is the historical method by
which record labels have obtained compulsory
licenses’’); S. Rep. No. 115–339, at 3 (same); see also
U.S. Copyright Office, Orrin G. Hatch–Bob
Goodlatte Music Modernization Act, https://
www.copyright.gov/music-modernization/.
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The new blanket license will become
available upon the statutory license
availability date (i.e., January 1, 2021).8
Before then, the MMA ‘‘creates a
transition period in order to move from
the current work-by-work license to the
new blanket license.’’ 9 On and after the
license availability date, a compulsory
license to make and distribute DPDs
will generally only be available through
the new blanket license, apart from a
limited exception for record companies
to continue using the song-by-song
licensing process to make and distribute
permanent downloads embodying a
specific individual musical work (called
an ‘‘individual download license’’).10
As previously detailed by the Office,11
the MLC, through its board of directors
and task-specific committees,12 is
responsible for a variety of duties under
the blanket license, including receiving
usage reports from digital music
providers, collecting and distributing
royalties associated with those uses,
identifying musical works embodied in
particular sound recordings,
administering a process by which
copyright owners can claim ownership
of musical works (and shares of such
works), and establishing a musical
works database relevant to these
activities.13 By statute, digital music
providers will bear the reasonable costs
of establishing and operating the MLC
through an administrative assessment,
8 17
U.S.C. 115(d)(2)(B), (e)(15).
Rep. No. 115–651, at 10; S. Rep. No. 115–
339, at 10; see 17 U.S.C. 115(b)(2)(A), (d)(9), (d)(10).
The Copyright Office has separately issued
regulatory updates related to digital music
providers’ obligations during this transition period
before the blanket license is available. See 84 FR
10685 (Mar. 22, 2019); 83 FR 63061 (Dec. 7, 2018).
10 17 U.S.C. 115(b)(2)(B), (b)(3), (e)(12); see H.R.
Rep. No. 115–651, at 4; S. Rep. No. 115–339, at 3–
4. As the legislative history notes, the MMA
‘‘maintains the ‘pass-through’ license for record
labels to obtain and pass through mechanical
license rights for individual permanent
downloads,’’ but eliminates the pass-through
license for digital music providers ‘‘to engage in
activities related to interactive streams or limited
downloads.’’ H.R. Rep. No. 115–651, at 4; S. Rep.
No. 115–339, at 4.
11 See generally 84 FR 32274; 83 FR 65747 (Dec.
21, 2018).
12 By statute, the MLC board must establish three
committees. First, an operations advisory
committee will make recommendations concerning
the operations of the MLC, ‘‘including the efficient
investment in and deployment of information
technology and data resources.’’ 17 U.S.C.
115(d)(3)(D)(iv). Second, an unclaimed royalties
oversight committee will establish policies and
procedures necessary to undertake a fair
distribution of unclaimed royalties. Id. at
115(d)(3)(D)(v), (d)(3)(J)(ii). Third, a dispute
resolution committee will establish policies and
procedures for copyright owners to address
disputes relating to ownership interests in musical
works, including a mechanism to hold disputed
funds pending the resolution of the dispute. Id. at
115(d)(3)(D)(vi), (d)(3)(H)(ii), (d)(3)(K).
13 Id. at 115(d)(3)(C).
9 H.R.
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49967
to be determined, if necessary, by the
Copyright Royalty Judges (‘‘CRJs’’).14
The MMA also permits the Register to
designate a digital licensee coordinator
(‘‘DLC’’) to represent licensees in the
assessment proceeding, to serve as a
non-voting member of the MLC, and to
carry out other functions.15
Effective July 8, 2019, following a
comprehensive public process, the
Register, with the approval of the
Librarian of Congress, selected and
designated entities and their individual
board members as the MLC and DLC,
respectively.16 The Office also adopted
technical amendments to its relevant
pre-MMA regulations, including those
pertaining to NOIs and statements of
account, to harmonize them with the
MMA’s requirements.17 Those
amendments were generally directed at
the present transition period before the
blanket license becomes available. They
did not speak to compulsory licensing
of DPDs under the new blanket license,
which is addressed through this
notification of inquiry.
The MMA enumerates several
regulations that the Copyright Office is
specifically directed to promulgate to
govern the new blanket licensing
regime, including with respect to
notices of license, notices of nonblanket
activity, reports of usage, database
information, database usability,
interoperability, and usage restrictions,
and the handling of confidential
information. Additionally, Congress
invested the Copyright Office with
‘‘broad regulatory authority’’ 18 to
‘‘conduct such proceedings and adopt
such regulations as may be necessary or
appropriate to effectuate the provisions
of [the MMA pertaining to the blanket
license].’’ 19 The legislative history
contemplates that the Office will
‘‘thoroughly review[ ]’’ policies and
procedures established by the MLC and
its three committees, and promulgate
regulations that ‘‘balance[ ] the need to
protect the public’s interest with the
need to let the new collective operate
without over-regulation.’’ 20 It further
14 Id.
at 115(d)(7)(D).
at 115(d)(5)(B); see also id. at
115(d)(3)(D)(i)(IV), (d)(5)(C).
16 84 FR at 32295.
17 84 FR 10685; 83 FR 63061.
18 H.R. Rep. No. 115–651, at 5–6; S. Rep. No. 115–
339, at 5; Conf. Rep. at 4.
19 17 U.S.C. 115(d)(12)(A).
20 H.R. Rep. No. 115–651, at 5–6, 14; S. Rep. No.
115–339, at 5, 15; Conf. Rep. at 4, 12. The
Conference Report further contemplates that the
Office’s review will be important because the MLC
must operate in a manner that can gain the trust of
the entire music community, but can only be held
liable under a standard of gross negligence when
carrying out certain of the policies and procedures
adopted by its board. Conf. Rep. at 4.
15 Id.
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states that ‘‘[t]he Copyright Office has
the knowledge and expertise regarding
music licensing through its past
rulemakings and recent assistance to the
Committee[s] during the drafting of this
legislation.’’ 21 Together, the statute and
legislative history make clear that
Congress intended for the Office to
oversee and regulate the MLC as
necessary and appropriate,22 as well as
periodically review that designation.23
Indeed, Congress acknowledged that
‘‘[a]lthough the legislation provides
specific criteria for the collective to
operate, it is to be expected that
situations will arise that were not
contemplated by the legislation,’’ and
that ‘‘[t]he Office is expected to use its
best judgement in determining the
appropriate steps in those situations.’’ 24
The Office has recently addressed
adjacent matters in two proceedings,
concerning updating of the relevant
section 115 regulations to account for
the current interim period and the
Register’s designation of the MLC and
DLC.25 The designation of the MLC
received multiple public comments,
some with respect to issues such as the
MLC’s prospective governance practices
and performance of its duty to
eventually distribute unclaimed accrued
royalties following a proscribed holding
period, that the Office noted at the time
were also able to be addressed in
additional ways by the statute,
including this delegation of regulatory
authority.26 Taking seriously Congress’s
instructions to exercise its regulatory
authority ‘‘to ensure the fair treatment of
interested parties’’ by the MLC,27 in
designating the MLC and DLC, the
Office stated that it ‘‘intends to conduct
its oversight role in a fair and impartial
manner; songwriters are encouraged to
participate in these future
rulemakings.’’ 28
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B. Overview of the Rulemaking Process
To establish necessary and
appropriate regulations to govern the
new blanket licensing system, the Office
now seeks public comment on the
subjects discussed below. The Copyright
Office is issuing this notification of
inquiry as the first step in promulgating
21 H.R. Rep. No. 115–651, at 14; S. Rep. No. 115–
339, at 15; Conf. Rep. at 12.
22 The Office notes that in the MLC designation
proceeding many commenters supported the Office
performing a meaningful oversight role to the extent
permissible under the statute. 84 FR at 32280 n.120.
23 17 U.S.C. 115(d)(3)(B)(ii).
24 H.R. Rep. No. 115–651, at 14; S. Rep. No. 115–
339, at 15; Conf. Rep. at 12.
25 See 84 FR 32274; 84 FR 10685; 83 FR 63061.
26 84 FR at 32283.
27 H.R. Rep. No. 115–651, at 6; S. Rep. No. 115–
339, at 5; Conf. Rep. at 4.
28 84 FR at 32283.
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the regulations required by the MMA to
govern the blanket license regime. After
reviewing the comments received in
response, the Office plans to publish
multiple notices of proposed
rulemaking, each focusing on one or
more of the regulatory categories
discussed below. The Office has
concluded that this phasing is the best
way for it to efficiently and thoughtfully
conduct the relevant regulatory
proceedings in light of the upcoming
license availability date and the Office’s
available resources. To aid the Office’s
review, it is requested that where a
submission responds to more than one
of the below categories, it be divided
into discrete sections that have clear
headings to indicate the category being
discussed in each section. Comments
addressing a single category should also
have a clear heading to indicate which
category it discusses.
In responding to this notification,
commenters are encouraged to indicate
whether any of the below categories
should be prioritized over others with
respect to the order in which the Office
addresses them. For example, it may be
beneficial to establish rules governing
the musical works database and reports
of usage early on to aid the MLC in
building its database infrastructure and
developing related IT systems. As
another example, establishing
confidentiality rules sooner rather than
later may help the MLC and DLC share
information as effectively and efficiently
as possible as they both get ready for the
license availability date.
On the other hand, for example, while
any relevant regulatory activity
regarding the MLC’s obligation to
distribute unclaimed accrued royalties
(e.g., engaging in good-faith efforts to
publicize notice relating to pending
distributions at least ninety days in
advance 29) would relate to important,
core responsibilities of the MLC, it
appears logical to prioritize other
regulatory provisions directed at more
imminent MLC functions. Unlike most
of the other subjects discussed below,
which must be addressed before the
January 1, 2021 license availability date,
no unclaimed accrued royalties may be
distributed until January 1, 2023, at the
earliest.30 Further, the Office is
separately required by the MMA to
undertake a study, to be concluded by
July 2021, that recommends best
practices for the MLC to identify and
locate copyright owners with unclaimed
royalties, encourage copyright owners to
29 See
17 U.S.C. 115(d)(3)(J)(iii)(II)(dd).
at 115(d)(3)(H)(i), (J)(i)(I); see 84 FR at 32291
(noting the Office’s and the designated MLC’s
agreement on this issue).
30 Id.
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claim their royalties, and reduce the
incidence of unclaimed royalties.31 The
Office plans to commence that study
this winter and looks forward to having
broad industry participation, including
by interested songwriters, regarding this
important issue.
The Office welcomes parties to file
joint comments on issues of common
agreement and consensus.32 The Office
will also consider how to utilize
informal meetings to gather additional
information on discrete issues prior to
publishing notices of proposed
rulemaking by establishing guidelines
for ex parte communications. Relevant
guidelines will be issued at a later date
on https://www.copyright.gov/
rulemaking/mma-implementation/, and
will be similar to those imposed in other
proceedings.33 Any such
communications will be on the record to
ensure the greatest possible
transparency, but would only
supplement, not substitute for, the
written record.
While all public comments are
welcome, as applicable, the Office
encourages parties to provide specific
proposed regulatory language for the
Office to consider and for others to
comment upon. Similarly, commenters
replying to proposed language may want
to offer alternate language for
consideration.
Commenters are reminded that while
the Office’s regulatory authority is
relatively broad,34 it is obviously
constrained by the law Congress
enacted; the Office can fill statutory
gaps, but will not entertain proposals
that conflict with the statute.35
31 Public Law 115–264, sec. 102(f), 132 Stat. 3676,
3722–23.
32 See, e.g., Joint Comments of Nat’l Music
Publishers’ Ass’n & Dig. Media Ass’n Submitted in
Response to Copyright Royalty Board’s November 5,
2018, Notification of Inquiry (Dec. 10, 2018)
(regarding regulations relating to enactment of the
MMA); Joint Comments of Dig. Media Ass’n, Nat’l
Music Publishers’ Ass’n, Recording Indus. Ass’n of
Am., Harry Fox Agency, Inc., & Music Reports, Inc.
Submitted in Response to U.S. Copyright Office’s
July 27, 2012, Notice of Proposed Rulemaking (Oct.
25, 2012) (regarding section 115 statement of
account regulations).
33 See, e.g., 83 FR at 65753–54 (identifying
guidelines for ex parte communications in MLC and
DLC designation proceeding); 82 FR 49550, 49563
(Oct. 26, 2017) (identifying guidelines for ex parte
communications in section 1201 rulemaking); 82 FR
58153, 58154 (Dec. 11, 2017) (identifying guidelines
for ex parte communications in rulemaking
regarding cable, satellite, and DART license
reporting practices).
34 See Conf. Rep. at 4, 12 (stating that the Office
has ‘‘broad regulatory authority’’ to promulgate
regulations that ‘‘balance[ ] the need to protect the
public’s interest with the need to let the new
collective operate without over-regulation’’).
35 See, e.g., Nat’l Cable & Telecomms. Ass’n v.
Brand X internet Servs., 545 U.S. 967, 980 (2005)
(‘‘[A]mbiguities in statutes within an agency’s
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Federal Register / Vol. 84, No. 185 / Tuesday, September 24, 2019 / Proposed Rules
II. Subjects of Inquiry
A. Notices of License and Nonblanket
Activity
The MMA requires entities engaging
in covered activities to file notice with
the MLC regarding such activities; the
notice will vary depending upon
whether or not the entity is seeking a
blanket license with respect to this
activity. The Copyright Office must
proscribe regulations regarding the form
and content for both notices of license
and notices of nonblanket activity.
1. Notices of License
To obtain a blanket license, a digital
music provider must submit a notice of
license (‘‘NOL’’) to the MLC ‘‘that
specifies the particular covered
activities in which the digital music
provider seeks to engage.’’ 36 The MLC
is to ‘‘receive, review, and confirm or
reject notices of license from digital
music providers,’’ and is required to
‘‘maintain a current, publicly accessible
list of blanket licenses that includes
contact information for the licensees
and the effective dates of such
licenses.’’ 37 The statute requires that
NOLs ‘‘comply in form and substance
with requirements that the Register of
Copyrights shall establish by
regulation.’’ 38 The Office seeks public
input on any issues that should be
considered relating to the form and
substance of NOLs, including but not
limited to the necessary level of detail
(e.g., whether NOLs should generally be
similar in scope to the Office’s current
notice of use form under sections 112
and 114,39 and more specifically,
whether a digital music provider should
be required or encouraged to describe its
interactive streaming service in
additional detail, such as by providing
the specific types of offerings
comprising that service).
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2. Notices of Nonblanket Activity
Under the MMA, certain entities
engaging in covered activities pursuant
to voluntary licenses or individual
download licenses that meet certain
criteria must comply with various
jurisdiction to administer are delegations of
authority to the agency to fill the statutory gap in
reasonable fashion.’’) (citing Chevron, U.S.A., Inc. v.
Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984));
see also Conf. Rep. at 12 (acknowledging that ‘‘it is
to be expected that situations will arise that were
not contemplated by the legislation,’’ and that
‘‘[t]he Office is expected to use its best judgement
in determining the appropriate steps in those
situations’’).
36 17 U.S.C. 115(d)(2)(A), (e)(22).
37 Id. at 115(d)(3)(F)(i); see also id. at (d)(2)(A)(ii)–
(iv) (discussing rejection and cure of NOLs).
38 Id. at 115(d)(2)(A)(i).
39 The notice of use form is available at https://
www.copyright.gov/forms/form112-114nou.pdf.
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obligations related to the blanket
compulsory license even though they do
not operate under a blanket license.40
These significant nonblanket licensees
(‘‘SNBLs’’) must submit to the MLC
notices of nonblanket activity
(‘‘NNBAs’’), reports of usage, and any
required payments of the administrative
assessment.41 According to the
legislative history, SNBLs are required
to make these filings and contribute to
the administrative assessment ‘‘because
they are presumed to benefit from’’ the
new musical works database that the
MLC is tasked with maintaining and ‘‘as
a way to avoid parties attempting to
avoid funding of the mechanical
licensing collective by engaging in
direct deals outside the blanket
license.’’ 42
Specifically, the statute requires
SNBLs to submit NNBAs to the MLC no
later than forty-five days after the
license availability date, or forty-five
days after the end of the first full month
in which an entity initially qualifies as
a SNBL, whichever occurs later.43
NNBAs are provided ‘‘for purposes of
notifying the mechanical licensing
collective that the licensee has been
engaging in covered activities.’’ 44 The
MLC will ‘‘receive notices of nonblanket
activity from significant nonblanket
licensees,’’ and is required to ‘‘maintain
a current, publicly accessible list of
notices of nonblanket activity that
includes contact information for
significant nonblanket licensees and the
dates of receipt of such notices.’’ 45 The
statute also requires that NNBAs
‘‘comply in form and substance with
requirements that the Register of
Copyrights shall establish by
regulation.’’ 46 The Office seeks public
input on any issues that should be
considered relating to the form and
substance of NNBAs, including, for
example, whether an NNBA should be
required to be updated or renewed, and
the level of description of activity it
should contain.
B. Data Collection and Delivery Efforts
While the MLC is ultimately tasked
with the core project of matching
musical works to sound recordings
embodying those works, and identifying
and locating the copyright owners of
those works (and shares thereof), the
MMA also outlines roles for certain
40 17
U.S.C. 115(d)(1)(C)(ii), (d)(6), (e)(31).
at 115(d)(6)(A).
42 H.R. Rep. No. 115–651, at 12; S. Rep. No. 115–
339, at 12; Conf. Rep. at 10.
43 17 U.S.C. 115(d)(6)(A)(i).
44 Id. at 115(e)(23); see also id. at 115(d)(6)(A)(i)
(requiring a copy to be made available to the DLC).
45 Id. at 115(d)(3)(F)(ii).
46 Id. at 115(d)(6)(A)(i).
41 Id.
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digital music providers and copyright
owners to facilitate this task by
collecting and providing related data to
the MLC.
1. Collection Efforts by Digital Music
Providers
Digital music providers using the
blanket license must ‘‘engage in goodfaith, commercially reasonable efforts to
obtain from sound recording copyright
owners and other licensors of sound
recordings made available through the
service of such digital music provider
information concerning’’: (1) Sound
recording copyright owners, producers,
International Standard Recording Codes
(‘‘ISRCs’’), and other information
commonly used in the industry to
identify sound recordings and match
them to the musical works the sound
recordings embody; and (2) the
authorship and ownership of musical
works, including songwriters, publisher
names, ownership shares, and
International Standard Musical Work
Codes (‘‘ISWCs’’).47
This obligation is directly connected
to the reports of usage discussed below,
for which much of the statutorily
enumerated information is only
required ‘‘to the extent acquired by the
digital music provider in connection
with its use of sound recordings of
musical works to engage in covered
activities, including pursuant to [this
obligation].’’ 48 Thus, it is important that
digital music providers genuinely
engage in appropriate efforts to obtain
this information both from record labels
and other licensors of sound recordings
(e.g., other distributors of sound
recordings such as TuneCore, CD Baby,
or DistroKid). The Office seeks public
input as to whether it is necessary and
appropriate for the Office to promulgate
any regulations concerning this
provision, including but not limited to
what constitutes ‘‘good-faith,
commercially reasonable efforts.’’
2. Collection Efforts by Copyright
Owners
Relatedly, the MMA also obligates
musical work copyright owners with
works that are listed in the MLC’s
database to ‘‘engage in commercially
reasonable efforts’’ to provide to the
MLC for the database, if not already
listed, ‘‘information regarding the names
of the sound recordings in which that
copyright owner’s musical works (or
shares thereof) are embodied, to the
extent practicable.’’ 49 The Office seeks
47 Id.
at 115(d)(4)(B).
at 115(d)(4)(A)(ii).
49 Id. at 115(d)(3)(E)(iv).
48 Id.
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public input as to whether it is
necessary and appropriate for the Office
to promulgate any regulations
concerning this provision, including but
not limited to what types of efforts
would be ‘‘commercially reasonable
efforts.’’
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C. Usage and Reporting Requirements
As noted, following the filing of a
notice of license, a digital music
provider making use of the blanket
license must engage in efforts to collect
information to assist in matching
copyright owners to musical works
made available through its service, and
report usage of such works to the MLC.
The digital music provider must also
pay appropriate royalties to the MLC
under the blanket license. Because the
usage reports will convey a large
quantity of data central to the MLC’s
core administrative duties of matching
musical works to sound recordings, and
copyright owners to musical works, as
well as collecting and distributing
accrued royalties for uses of these works
under the blanket license, these usage
reports may play a key role in the
MMA’s overall legal framework to
provide for the matching of songs
played on digital music services to
copyright owners, locating the owners,
and ensuring they are paid their earned
royalties.
1. Reports of Usage and Payment—
Digital Music Providers
Among other things, the blanket
compulsory license is conditioned upon
the digital music provider reporting and
paying royalties to the MLC on a
monthly basis, due forty-five calendar
days after the end of the monthly
reporting period.50 The MMA requires
that reporting and payment be done in
accordance with both sections
115(c)(2)(I) and 115(d)(4)(A)(ii), which
are discussed below.51
First, section 115(c)(2)(I) is the
generally applicable reporting and
payment provision for the compulsory
license, augmented by section
115(d)(4)(A) with respect to the blanket
compulsory license specifically. The
former section predates the MMA and
applies to both blanket and non-blanket
compulsory licenses, except that
statements are due within twenty days
for non-blanket compulsory licenses
rather than forty-five days.52 ‘‘Each
monthly payment shall be made under
oath and shall comply with
requirements that the Register of
Copyrights shall prescribe by
50 Id.
at 115(d)(4)(A)(i).
at 115(d)(4)(A)(i).
52 See id. at 115(c)(2)(I), (d)(4)(A)(i).
51 Id.
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regulation.’’ 53 In addition, the Office
must also ‘‘prescribe regulations under
which detailed cumulative annual
statements of account, certified by a
certified public accountant, shall be
filed for every compulsory license.’’ 54
Section 115(c)(2)(I) further provides that
‘‘[t]he regulations covering both the
monthly and the annual statements of
account shall prescribe the form,
content, and manner of certification
with respect to the number of records
made and the number of records
distributed.’’ 55
The Office’s current statement of
account regulations promulgated under
section 115(c)(2)(I) are located in 37
CFR part 210, subpart B. After passage
of the MMA, the Office made technical
amendments to those regulations to
conform them to the MMA with respect
to non-blanket compulsory licenses.56
The amendments made clear that those
regulations will not apply to the blanket
license.57 While the Office plans to now
establish separate regulations governing
the blanket license, there may be
existing provisions in the current
regulations in part 210 that would also
be relevant to the blanket license that
commenters may wish to evaluate and
identify for the Office to consider
carrying over.
Second, section 115(d)(4)(A)(ii)
addresses submissions made to the MLC
by digital music providers under the
blanket license, calling them ‘‘reports of
usage’’ rather than ‘‘statements of
account.’’ This provision contains
additional requirements not listed in
section 115(c)(2)(I). Reports of usage
‘‘shall provide usage data for musical
works used under the blanket license
and usage data for musical works used
in covered activities under voluntary
licenses and individual download
licenses.’’ 58 Reports must contain the
following information: (1) Identifying
information for the sound recording
embodying a musical work, including
sound recording name, featured artist,
and, to the extent acquired by the digital
music provider in connection with its
engagement in covered activities, sound
recording copyright owner, producer,
ISRC, and other information commonly
used to identify sound recordings and
match them to musical works; (2) to the
extent acquired by the digital music
provider in the metadata provided by
licensors of sound recordings in
connection with its engagement in
covered activities, information
concerning authorship and ownership
of the applicable rights in the musical
work embodied in the sound recording
(including each songwriter, publisher
name, and respective ownership share)
and the ISWC; and (3) the number of
DPDs of the sound recording, including
limited downloads and interactive
streams.59 Legislative history
contemplates that reports ‘‘should be
consistent with then-current industry
practices regarding how such limited
downloads and interactive streams are
tracked and reported.’’ 60 In addition,
reports of usage must also identify and
provide contact information for all
musical work copyright owners for
works embodied in sound recordings as
to which a voluntary, rather than a
blanket, license is in effect with respect
to the uses being reported.61
In addition to the statutorilyprescribed categories, reports of usage
must also contain ‘‘such other
information as the Register of
Copyrights shall require by
regulation.’’ 62 These reports of usage
must be ‘‘in a machine-readable format
that is compatible with the information
technology systems of the mechanical
licensing collective and meets the
requirements of regulations adopted by
the Register of Copyrights.’’ 63
The new blanket licensing framework
was adopted against the widespread
practice of voluntary or ‘‘direct’’
licensing of mechanical rights through
an intermediary agency such as Harry
Fox Agency or by the music publisher
directly.64 In responding to this
notification, the Office welcomes
information regarding how industry
customs regarding voluntary licensing
practices that vary from the prior
compulsory licensing regulations may
be relevant to establishing future rules
for reports of usage, including
suggestions regarding any additional
data, beyond the statutorily required
data discussed above, the Office should
proscribe to be included in usage
reports.65
Finally, the Office shall also adopt
regulations ‘‘regarding adjustments to
reports of usage by digital music
59 Id.
at 115(d)(4)(A)(ii)(I).
Rep. No. 115–651, at 12; S. Rep. No. 115–
339, at 13; Conf. Rep. at 10.
61 17 U.S.C. 115(d)(4)(A)(ii)(II).
62 Id. at 115(d)(4)(A)(ii)(III).
63 Id. at 115(d)(4)(A)(iii).
64 U.S. Copyright Office, Copyright and the Music
Marketplace 30–31.
65 See, e.g., id. (noting common practice for direct
licenses to be reported on a quarterly rather than
monthly basis).
60 H.R.
53 Id.
at 115(c)(2)(I).
54 Id.
55 Id.
56 84
FR 10685; 83 FR 63061.
CFR 210.11 (‘‘[T]his subpart shall not apply
where a digital music provider reports and pays
royalties under a blanket license under 17 U.S.C.
115(d)(4)(A)(i).’’).
58 17 U.S.C. 115(d)(4)(A)(ii).
57 37
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providers, including mechanisms to
account for overpayment and
underpayment of royalties in prior
periods.’’ 66
The Office seeks public input on any
issues that should be considered
relating to reports of usage and payment
to be provided to the MLC by digital
music providers under the blanket
license, including specifically
adjustments to these reports. These
issues include specific information
technology requirements for these
reports, as well as any additional
requirements relating to cumulative
annual statements of account.67
2. Reports of Usage—SNBLs
SNBLs are also required to ‘‘provide
monthly reports of usage’’ to the MLC
within forty-five days after the end of
the month being reported, ‘‘contain[ing]
the information described in [section
115(d)](4)(A)(ii)’’ and ‘‘accompanied by
any required payment of the
administrative assessment.’’ 68 The
Office seeks public input on any issues
that should be considered relating to
reports of usage to be provided to the
MLC by SNBLs, including but not
limited to how such reports may differ
from the reports filed by digital music
providers under the blanket license.
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3. Records of Use Maintenance and
Access
Relatedly, the MMA directs the
Copyright Office to adopt regulations
‘‘setting forth requirements under which
records of use shall be maintained and
made available to the mechanical
licensing collective by digital music
providers engaged in covered activities
under a blanket license.’’ 69 The Office
seeks public input on any issues that
should be considered relating to the
maintenance and access of such records
of use, which presumably could be used
to substantiate and interpret the data
included on usage reports.
D. Transfer and Reporting of Unclaimed
Accrued Royalties to the MLC at the End
of the Transition Period
A related topic concerns the historical
reporting that digital music providers
will provide to the MLC when
transferring and reporting to the MLC
any unclaimed accrued royalties
remaining with digital music providers
at the end of the transition period. As
noted above, the Office previously
66 17
U.S.C. 115(d)(4)(A)(iv)(II).
S. Rep. No. 115–339, at 24–25 (‘‘The
Register shall specify information technology
requirements of such reports along with the
maintenance of the records of use.’’).
68 17 U.S.C. 115(d)(6)(A)(ii).
69 Id. at 115(d)(4)(A)(iii), (iv)(I).
67 See
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engaged in a rulemaking to address the
current transition period before the
blanket license becomes available.70
The MMA requires that within forty-five
days after the license availability date,
a digital music provider seeking to avail
itself of the MMA’s limitation on
liability must transfer all accrued
royalties for any unmatched musical
works (or shares) to the MLC
‘‘accompanied by a cumulative
statement of account that includes all of
the information that would have been
provided to the copyright owner had the
digital music provider been serving
monthly statements of account on the
copyright owner from initial use of the
work in accordance with [section 115]
and applicable regulations.’’ 71 The
Office adopted regulations that follow
the statute, specifying that digital music
providers must pay royalties and
provide cumulative statements of
account to the MLC in compliance with
the Office’s preexisting monthly
statement of account regulations in 37
CFR 210.16.72 The Office further
required that these statements include
‘‘a clear identification of the total period
covered by the cumulative statement
and the total royalty payable for the
period.’’ 73
While the Office enacted the rule
pursuant to a public process, the Office
did not receive any comments.74
Throughout the transition period,
including during the MLC designation
proceeding, there has been persistent
concern about the ‘‘black box’’ of
unclaimed royalties, including its
amount and treatment by digital music
providers and the MLC. Consequently,
the Office is providing another
opportunity for the public to comment
on whether there should be any
adjustment to the current regulations
governing the cumulative statements of
account required by the statute to
accompany unclaimed royalties that are
to be transferred from digital music
providers to the MLC within forty-five
days of the license availability date. The
Office seeks public input on any issues
that should be considered relating to the
transfer and reporting of unclaimed
royalties by digital music providers to
the MLC.
E. Musical Works Database Information
A core aspect of the MLC’s
responsibilities includes identifying
musical works and copyright owners,
matching them to sound recordings (and
addressing disputes), and ensuring that
songwriters and other copyright owners
get paid the royalties they are due. To
that end, the MLC will establish and
maintain a free public database of
musical work ownership information
that also identifies the sound recordings
in which the musical works are
embodied.75 As the legislative history
explains:
For far too long, it has been difficult to
identify the copyright owner of most
copyrighted works, especially in the music
industry where works are routinely
commercialized before all of the rights have
been cleared and documented. This has led
to significant challenges in ensuring fair and
timely payment to all creators even when the
licensee can identify the proper individuals
to pay. With millions of songs now available
to subscribers worldwide, technology also
has a role to play through digital
fingerprinting of a sound recording.
However, there is no reliable, public database
to link sound recordings with their
underlying musical works. Unmatched works
routinely occur as a result of different
spellings of artist names and song titles. Even
differing punctuation in the name of a work
has been enough to create unmatched works.
. . . Music metadata has more often been
seen as a competitive advantage for the party
that controls the database, rather than as a
resource for building an industry on. . . .
This situation 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.76
With respect to musical works that
have been matched to copyright
owners,77 by statute, the MLC’s database
must include: (1) The title of the
musical work; (2) the copyright owner
of the work (or share thereof), and the
ownership percentage of that owner; (3)
contact information for such copyright
owner; and (4) to the extent reasonably
available to the MLC, (a) the ISWC for
the work, and (b) identifying
information for sound recordings in
which the musical work is embodied,
including the name of the sound
recording, featured artist, sound
recording copyright owner, producer,
ISRC, and other information commonly
used to assist in associating sound
recordings with musical works.78
With respect to unmatched musical
works,79 by statute, the database must
include, to the extent reasonably
available to the MLC: (1) The title of the
musical work; (2) the ownership
percentage for which an owner has not
been identified; (3) if a copyright owner
75 17
70 84
FR 10685; 83 FR 63061.
71 17 U.S.C. 115(d)(10)(B)(iv)(III)(aa).
72 37 CFR 210.20(b)(3)(i).
73 Id.
74 See 84 FR 10685; 83 FR 63061.
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U.S.C. 115(d)(3)(E), (e)(20).
Rep. No. 115–339, at 8; Conf. Rep. at 6; see
also H.R. Rep. No. 115–651, at 7–8.
77 See 17 U.S.C. 115(e)(17).
78 Id. at 115(d)(3)(E)(ii).
79 See id. at 115(e)(35).
76 S.
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has been identified but not located, the
identity of such owner and the
ownership percentage of that owner; (4)
identifying information for sound
recordings in which the work is
embodied, including sound recording
name, featured artist, sound recording
copyright owner, producer, ISRC, and
other information commonly used to
assist in associating sound recordings
with musical works; and (5) any
additional information reported to the
MLC that may assist in identifying the
work.80
For both categories (matched and
unmatched works), the MLC’s database
must also include ‘‘such other
information’’ ‘‘as the Register of
Copyrights may prescribe by
regulation.’’ 81 The legislative history
provides that the Office ‘‘shall use its
judgement to determine what is an
appropriate expansion of the required
fields, but shall not adopt new fields
that have not become reasonably
accessible and used within the industry
unless there is widespread support for
the inclusion of such fields.’’ 82 The
legislative history also notes specifically
that the Office ‘‘may at some point wish
to consider . . . whether standardized
identifiers for individuals would be
appropriate, or even audio
fingerprints.’’ 83
Issues related to the information in
the musical works database are closely
connected, and equally important, to
questions regarding the data collection
efforts and reporting by digital music
providers that will help populate the
database. Much of the required data will
likely come from, or at least be able to
cohere with, the reports of usage
submitted to the MLC by digital music
providers, and so similar issues may be
addressed in the promulgation of these
related regulations, such as those
concerning what information is
considered standard or reasonably
available. The Office seeks public input
on any issues that should be considered
relating to information to be included in
the MLC’s musical works database,
including what, if any, specific
additional categories of information
might be appropriate to proscribe under
these standards, keeping in mind the
interrelationship between this
information and the above-discussed
data collection efforts and usage
reporting.
80 Id.
at 115(d)(3)(E)(iii).
at 115(d)(3)(E)(ii)(V), (iii)(II).
82 H.R. Rep. No. 115–651, at 8; S. Rep. No. 115–
339, at 8; Conf. Rep. at 7.
83 H.R. Rep. No. 115–651, at 8; S. Rep. No. 115–
339, at 8; Conf. Rep. at 7.
81 Id.
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F. Musical Works Database Usability,
Interoperability, and Usage Restrictions
The MMA also directs the Copyright
Office to ‘‘establish requirements by
regulations to ensure the usability,
interoperability, and usage restrictions
of the [MLC’s] musical works
database.’’ 84 The statute provides that
the database must ‘‘be made available to
members of the public in a searchable,
online format, free of charge.’’ 85 The
MLC must make the data available ‘‘in
a bulk, machine-readable format,
through a widely available software
application,’’ to digital music providers
operating under valid NOLs, compliant
SNBLs, authorized vendors of such
digital music providers or SNBLs, and
the Copyright Office, free of charge, and
to ‘‘[a]ny other person or entity for a fee
not to exceed the marginal cost to the
mechanical licensing collective of
providing the database to such person or
entity.’’ 86 The legislative history adds
that ‘‘[i]ndividual lookups of works
shall be free although the collective may
implement reasonable steps to block
efforts to bypass the marginal cost
recovery for bulk access if it appears
that one or more entities are attempting
to download the database in bulk
through repeated queries.’’ 87 The
legislative history also states that ‘‘there
shall be no requirement that a database
user must register or otherwise turn over
personal information in order to obtain
the free access required by the
legislation.’’ 88
During the MLC designation
proceeding, Mechanical Licensing
Collective, Inc. (‘‘MLCI’’), the entity
designated as the MLC, noted the
importance of compatibility with
existing music industry standards,
including communicating information
in accordance with the Common Works
Registration (‘‘CWR’’) format and DDEX
standards, and a willingness to explore
other relevant existing or emerging
standards or open protocols.89 MLCI
stated that it ‘‘strongly support[s] the
adoption of standards, formats, and
frameworks that allow information to be
easily and accurately shared throughout
the industry,’’ and that ‘‘good systems
functioning and architectural practices
instruct that components should have
84 17
U.S.C. 115(d)(3)(E)(vi).
at 115(d)(3)(E)(v).
86 Id. at 115(d)(3)(E)(v).
87 H.R. Rep. No. 115–651, at 8; S. Rep. No. 115–
339, at 8–9; Conf. Rep. at 7.
88 H.R. Rep. No. 115–651, at 8; S. Rep. No. 115–
339, at 9; Conf. Rep. at 7.
89 84 FR at 32287 (citing Proposal of Mechanical
Licensing Collective, Inc. Submitted in Response to
U.S. Copyright Office’s December 21, 2018, Notice
of Inquiry, at 35, 38, 57–58 (Mar. 21, 2019) (‘‘MLCI
Proposal’’).
85 Id.
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proper APIs.’’ 90 MLCI also committed
to establishing an information security
management system that is certified
with ISO/IEC 27001 and meets the EU
General Data Protection Regulation
requirements, and other applicable
laws.91
The Office seeks public input on any
issues that should be considered
relating to the usability, interoperability,
and usage restrictions of the MLC’s
musical works database, including but
not limited to any technical or other
specific language that might be helpful
to consider in promulgating these
regulations, discussion of the pros and
cons of applicable standards, and
whether historical snapshots of the
database should be maintained to track
ownership changes over time.
G. MLC Payments and Statements of
Account
Next, the Office seeks comment
regarding the MLC’s payment and
reporting obligations with respect to
royalties that have been matched to
copyright owners, both for works that
are matched at the time the MLC
receives payment from digital music
providers and works that are matched
later during the statutorily prescribed
holding period for unmatched works.
Historically, under the song-by-song
statutory license, copyright owners or
their authorized agents received royalty
payments accompanied by statements of
account from the licensee.92 Under the
MMA, digital music providers with
blanket licenses will instead report and
pay royalties to the MLC. The statute
provides that ‘‘[u]pon receiving reports
of usage and payments of royalties from
digital music providers for covered
activities, the mechanical licensing
collective shall’’ ‘‘distribute royalties to
copyright owners in accordance with
the usage and other information
contained in such reports, as well as the
ownership and other information
contained in the records of the
collective.’’ 93 When a copyright owner
who is owed unmatched royalties
becomes identified and located, the
MLC must pay applicable accrued
royalties to the copyright owner,
‘‘accompanied by a cumulative
statement of account reflecting usage of
such work and accrued royalties based
on information provided by digital
90 MLCI
Proposal at 46–47.
FR at 32290 (citing MLCI Proposal at 50).
92 See 37 CFR 210.16(g)(1), 210.17(g)(1) (2017); 17
U.S.C. 115(c)(6) (2017) (‘‘If the copyright owner
does not receive the monthly payment and the
monthly and annual statements of account when
due . . . .’’) (emphasis added).
93 17 U.S.C. 115(d)(3)(G)(i)(II).
91 84
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music providers to the mechanical
licensing collective.’’ 94
The Office seeks public input as to
potential regulations regarding what
reporting should be required of the MLC
when distributing royalties to matched
copyright owners in the ordinary course
under section 115(d)(3)(G)(i)(II), as well
as input concerning the timing of such
regular distributions. The Office also
welcomes input on any issues that
should be considered relating to the
cumulative statements of account to be
provided under section 115(d)(3)(I)(ii),
relating to payments due to copyright
owners of a previously unmatched work
(or share thereof) who is later identified
and located by the MLC, including what
additional material, if any, may be
required in these statements as
compared to routine periodic
distributions for already matched works.
H. Treatment of Confidential and Other
Sensitive Information
The MMA broadly directs the
Copyright Office to ‘‘adopt regulations
to provide for the appropriate
procedures to ensure that confidential,
private, proprietary, or privileged
information contained in the records of
the mechanical licensing collective and
digital licensee coordinator is not
improperly disclosed or used, including
through any disclosure or use by the
board of directors or personnel of either
entity, and specifically including the
unclaimed royalties oversight
committee and the dispute resolution
committee of the mechanical licensing
collective.’’ 95
The MMA additionally makes several
explicit references to the Office’s
regulations governing the treatment of
confidential and other sensitive
information in various circumstances,
including with respect to: (1) ‘‘all
material records of the operations of the
mechanical licensing collective’’; 96 (2)
steps the MLC must take to ‘‘safeguard
the confidentiality and security of
usage, financial, and other sensitive data
94 Id.
at 115(d)(3)(I)(ii).
at 115(d)(12)(C).
96 Id. at 115(d)(3)(M)(i) (‘‘The mechanical
licensing collective shall ensure that all material
records of the operations of the mechanical
licensing collective, including those relating to
notices of license, the administration of the claims
process of the mechanical licensing collective,
reports of usage, royalty payments, receipt and
maintenance of accrued royalties, royalty
distribution processes, and legal matters, are
preserved and maintained in a secure and reliable
manner, with appropriate commercially reasonable
safeguards against unauthorized access, copying,
and disclosure, and subject to the confidentiality
requirements prescribed by the Register of
Copyrights under paragraph (12)(C) for a period of
not less than 7 years after the date of creation or
receipt, whichever occurs later.’’).
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95 Id.
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used to compute market shares’’ when
distributing unclaimed accrued
royalties; 97 (3) steps the MLC and DLC
must take to ‘‘safeguard the
confidentiality and security of financial
and other sensitive data shared’’ by the
MLC to the DLC about SNBLs; 98 (4)
voluntary licenses administered by the
MLC; 99 (5) examination of the MLC’s
‘‘books, records, and data’’ pursuant to
audits by copyright owners; 100 and (6)
examination of digital music providers’
‘‘books, records, and data’’ pursuant to
audits by the MLC.101
The Office seeks public input on any
issues that should be considered
relating to the treatment of confidential
and other sensitive information as it
relates to the blanket license regime,
including but not limited to the
interplay between the Office’s
regulations and the use of nondisclosure
agreements, confidential information
relating to SNBLs, disclosure of
information through the MLC’s
unclaimed royalties oversight
committee and dispute resolution
committee, and what information can be
shared by and among board and
committee members or with the general
public.
I. Additional MLC Oversight
As discussed above, the statute and
legislative history make plain that
Congress expects the Copyright Office to
oversee and regulate the MLC as
necessary and appropriate. For example,
the legislative history contemplates that
the Office will exercise its authority to
both ‘‘thoroughly review[ ]’’ policies and
procedures established by the MLC and
promulgate regulations that ‘‘balance[ ]
the need to protect the public’s interest
with the need to let the new collective
operate without over-regulation.’’ 102
Moreover, the statute requires the MLC
to ‘‘ensure that [its] policies and
practices . . . are transparent and
accountable.’’ 103
In the MLC designation proceeding,
some concerns raised by commenters
with respect to oversight related to
conflicts of interest, representation, and
diversity. The Office observed that the
designated MLC has ‘‘pledged to operate
under bylaws that will address conflicts
97 Id. at 115(d)(3)(J)(i)(II)(bb); see H.R. Rep. No.
115–651, at 27 (‘‘Unclaimed royalties are to be
distributed based upon market share data that is
confidentially provided to the collective by
copyright owners.’’); S. Rep. No. 115–339, at 24
(same); Conf. Rep. at 20 (same).
98 17 U.S.C. 115(d)(6)(B)(ii).
99 Id. at 115(d)(11)(C)(iii).
100 Id. at 115(d)(3)(L)(i)(II).
101 Id. at 115(d)(4)(D)(i)(II).
102 H.R. Rep. No. 115–651, at 5–6, 14; S. Rep. No.
115–339, at 5, 15; Conf. Rep. at 4, 12.
103 17 U.S.C. 115(d)(3)(D)(ix)(I)(aa).
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Sfmt 4702
49973
of interest and appropriate disclosures
in accordance with applicable state laws
and professional duties of care.’’ 104 The
Office stated that it ‘‘expects ongoing
regulatory and other implementation
efforts to . . . extenuate the risk of selfinterest,’’ and that ‘‘the Register intends
to exercise her oversight role as it
pertains to matters of governance.’’ 105
Additionally, the Office stated that it
‘‘intends to work with the MLC to help
it achieve the[ ] goals’’ of ‘‘engagement
with a broad spectrum of musical work
copyright owners, including from those
communities’’ and musical genres that
some commenters in the designation
proceeding asserted are
underrepresented.106
The Office seeks public input on any
issues that should be considered
relating to the oversight of the MLC,
including but not limited to conflicts of
interest, representation of the entire
musical works community, ensuring
that board and committee member
service complies with all relevant legal
requirements, and the appropriate scope
and manner for the Office’s review of
MLC policies and procedures (including
its bylaws) and any subsequent
modifications to such policies and
procedures.
J. Public Notice and Distribution of
Unclaimed Accrued Royalties
As discussed above, the Office is
specifically required by the MMA to
undertake a separate study and to
provide a report by July 2021
recommending best practices for the
MLC to identify and locate copyright
owners with unclaimed royalties,
encourage copyright owners to claim
their royalties, and reduce the incidence
of unclaimed royalties.107 The Office
plans to commence that study this
winter and looks forward to having
broad industry participation, including
by interested songwriters, regarding this
important issue. Unlike most of the
other subjects discussed above, which
must be addressed before the January 1,
2021 license availability date, no
unclaimed accrued royalties may be
distributed until January 1, 2023, at the
earliest.108
Accordingly, while the Office will
accept information regarding whether
and how to promulgate regulations
regarding the MLC’s obligation to
distribute unclaimed accrued royalties
(e.g., rules pertaining to the requirement
104 84
FR at 32280.
105 Id.
106 Id.
at 32279.
L. 115–264, sec. 102(f), 132 Stat. 3676,
3722–23.
108 84 FR at 32291 (citing 17 U.S.C.
115(d)(3)(H)(i), (J)(i)(I)).
107 Pub.
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Federal Register / Vol. 84, No. 185 / Tuesday, September 24, 2019 / Proposed Rules
that the MLC engage in good-faith
efforts to publicize notice relating to
pending distributions at least ninety
days in advance),109 commenters should
be aware that the Office is tentatively
inclined to wait until after the policy
study is underway to finalize rules with
respect to this important duty of the
MLC. The Office anticipates that those
seeking to comment on this issue will
have ample opportunity to do so
through the study and other future
activities.
K. Other Subjects
The Copyright Office invites public
comment on any other issues relevant to
the blanket compulsory license regime
that commenters believe are within and
appropriate for the Office’s regulatory
authority.
Dated: September 16, 2019.
Regan A. Smith,
General Counsel and Associate Register of
Copyrights.
[FR Doc. 2019–20318 Filed 9–23–19; 8:45 am]
BILLING CODE 1410–30–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 9, 12, 13, 43, and 52
[FAR Case 2018–021; Docket FAR–2019–
0031; Sequence 1]
I. Background
RIN 9000–AN79
Federal Acquisition Regulation:
Reserve Officer Training Corps and
Military Recruiting on Campus
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
AGENCY:
DoD, GSA, and NASA are
proposing to amend the Federal
Acquisition Regulation (FAR) to
implement the United States Code
section that prohibits the award of
certain Federal contracts to institutions
of higher education that prohibit
Reserve Officer Training Corps units or
military recruiting on campus.
DATES: Interested parties should submit
written comments to the Regulatory
Secretariat at one of the addresses
shown below on or before November 25,
khammond on DSKJM1Z7X2PROD with PROPOSALS
SUMMARY:
109 17
U.S.C. 115(d)(3)(J).
VerDate Sep<11>2014
15:54 Sep 23, 2019
2019 to be considered in the formation
of the final rule.
ADDRESSES: Submit comments in
response to FAR Case 2018–021 by any
of the following methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
entering ‘‘FAR Case 2018–021’’ under
the heading ‘‘Enter Keyword or ID’’ and
selecting ‘‘Search’’. Select the link
‘‘Submit a Comment’’ that corresponds
with ‘‘FAR Case 2018–021’’. Follow the
instructions provided at the ‘‘Submit a
Comment’’ screen. Please include your
name, company name (if any), and
‘‘FAR Case 2018–021’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
(MVCB), ATTN: Ms. Lois Mandell, 1800
F Street NW, 2nd Floor, Washington, DC
20405–0001.
Instructions: Please submit comments
only and cite ‘‘FAR Case 2018–021’’ in
all correspondence related to this case.
All comments received will be posted
without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided.
FOR FURTHER INFORMATION CONTACT: Ms.
Cecelia L. Davis, Procurement Analyst,
at 202–219–0202 or at cecelia.davis@
gsa.gov for clarification of content. For
information pertaining to status or
publication schedules, contact the
Regulatory Secretariat at 202–501–4755.
Please cite FAR Case 2018–021.
SUPPLEMENTARY INFORMATION:
Jkt 247001
DoD, GSA, and NASA are proposing
to amend the FAR to implement 10
U.S.C. 983, which prohibits the award
of certain Federal contracts to
institutions of higher education that
prohibit Reserve Officer Training Corps
(ROTC) units or military recruiting on
campus.
Both DoD and Department of
Homeland Security (DHS) have
previously implemented agency-specific
clauses that prohibit the award of
certain Federal contracts to institutions
of higher education that prohibit ROTC
units or military recruiting on campus.
DoD published an interim rule in the
Defense Federal Acquisition Regulation
Supplement (DFARS) on Institutions of
Higher Education, 65 FR 2056, on
January 13, 2000, to implement section
549 of the National Defense
Authorization Act (NDAA) for Fiscal
Year 2000. Section 549 amends 10
U.S.C. 983 to prohibit DoD from
providing funds by contract or grant to
an institution of higher education
PO 00000
Frm 00012
Fmt 4702
Sfmt 4702
(including any subelement of that
institution) if the Secretary of Defense
determines that the institution (or any
subelement of the institution) has a
policy or practice that prohibits, or in
effect prevents, Senior ROTC units or
military recruiting on campus.
DoD then published a final rule on
Military Recruiting and Reserve Officer
Training Corps Program Access to
Institutions of Higher Education, 73 FR
16525, on March 28, 2008, at 32 CFR
part 216. The rule implemented 10
U.S.C. 983, as amended by the Ronald
W. Reagan NDAA for Fiscal Year 2005
(Pub. L. 108–375, October 28, 2004).
The DoD rule clarified access to
campuses, access to students and access
to directory information on students for
the purposes of military recruiting, and
that access to campuses and students on
campuses shall be provided in a manner
that is at least equal in quality and
scope to that provided to any other
employer. DoD later published a DFARS
final rule in the Federal Register, 77 FR
19128, on March 30, 2012, to separate
provisions and clauses that were
previously combined in order to comply
with DFARS drafting conventions. This
final rule removed the representation
from 252.209–7005, Reserve Officer
Training Corps and Military Recruiting
on Campus, and added a new provision
at 252.209–7003, Reserve Officer
Training Corps and Military Recruiting
on Campus—Representation.
Similar to DoD, DHS published a rule
on December 4, 2003, 68 FR 67868 at
67891 to add a new clause in its
supplement at Homeland Security
Acquisition Regulation (HSAR)
3052.209–71, Reserve Officer Training
Corps and Military Recruiting on
Campus, to implement these
requirements.
This proposed rule would implement
10 U.S.C. 983, which prohibits the
award of certain Federal contracts with
covered funds to institutions of higher
education that prohibit ROTC units or
military recruiting on campus. ‘‘Covered
funds’’ is defined in 10 U.S.C. 983 to be
any funds made available for DoD,
Department of Transportation, DHS, or
National Nuclear Security
Administration of the Department of
Energy, the Central Intelligence Agency,
or for any department or agency in
which regular appropriations are made
in the Departments of Labor, Health and
Human Services, Education, and
Related Agencies Appropriations Act.
None of these covered funds may be
provided by contract or grant to an
institution of higher education
(including any subelement of such
institution) that has a policy or practice
(regardless of when implemented) that
E:\FR\FM\24SEP1.SGM
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]]>Agencies
- Library of Congress
- U.S. Copyright Office
[Federal Register Volume 84, Number 185 (Tuesday, September 24, 2019)]
[Proposed Rules]
[Pages 49966-49974]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20318]
=======================================================================
-----------------------------------------------------------------------
LIBRARY OF CONGRESS
U.S. Copyright Office
37 CFR Part 210
[Docket No. 2019-5]
Music Modernization Act Implementing Regulations for the Blanket
License for Digital Uses and Mechanical Licensing Collective
AGENCY: U.S. Copyright Office, Library of Congress.
ACTION: Notification of inquiry.
-----------------------------------------------------------------------
SUMMARY: The U.S. Copyright Office is issuing a notification of inquiry
regarding the Musical Works Modernization Act, title I of the Orrin G.
Hatch-Bob Goodlatte Music Modernization Act. Title I establishes a
blanket compulsory license, which digital music providers may obtain to
make and deliver digital phonorecords of musical works. The blanket
license, which will be administered by a mechanical licensing
collective, will become available on January 1, 2021. The MMA
specifically directs the Copyright Office to adopt a number of
regulations to govern the new blanket licensing regime, including
regulations regarding notices of license, notices of nonblanket
activity, usage reports and adjustments, information to be included in
the mechanical licensing collective's database, database usability,
interoperability, and usage restrictions, and the handling of
confidential information. The statute also vests the Office with
general authority to adopt such regulations as may be necessary or
appropriate to effectuate this new blanket licensing structure. To
promulgate these regulations, the Office seeks public comment regarding
the subjects of inquiry discussed in this notification.
DATES: Initial written comments must be received no later than 11:59
p.m. Eastern Time on November 8, 2019. Written reply comments must be
received no later than 11:59 p.m. Eastern Time on December 9, 2019.
ADDRESSES: For reasons of government efficiency, the Copyright Office
is using the regulations.gov system for the submission and posting of
public comments in this proceeding. All comments are therefore to be
submitted electronically through regulations.gov. Specific instructions
for submitting comments are available on the Copyright Office's website
at https://www.copyright.gov/rulemaking/mma-implementation/. If
electronic submission of comments is not feasible due to lack of access
to a computer and/or the internet, please contact the Office using the
contact information below for special instructions.
FOR FURTHER INFORMATION CONTACT: Regan A. Smith, General Counsel and
Associate Register of Copyrights, by email at [email protected],
Anna Chauvet, Associate General Counsel, by email at
[email protected], or Jason E. Sloan, Assistant General Counsel, by
email at [email protected]. Each can be contacted by telephone by
calling (202) 707-8350.
SUPPLEMENTARY INFORMATION:
I. Background
A. The Music Modernization Act and the Copyright Office's Regulatory
Authority
On October 11, 2018, the president signed into law the Orrin G.
Hatch-Bob Goodlatte Music Modernization Act (``MMA'').\1\ Title I of
the MMA, the Musical Works Modernization Act, substantially modifies
the compulsory ``mechanical'' license for making and distributing
phonorecords of nondramatic musical works under 17
[[Page 49967]]
U.S.C. 115.\2\ Prior to the MMA, licensees obtained a section 115
compulsory license on a per-work, song-by-song basis, by serving a
notice of intention to obtain a compulsory license (``NOI'') on the
relevant copyright owner (or filing it with the Copyright Office if the
Office's public records did not identify the copyright owner) and then
paying applicable royalties accompanied by accounting statements.\3\
---------------------------------------------------------------------------
\1\ Public Law 115-264, 132 Stat. 3676 (2018).
\2\ See S. Rep. No. 115-339, at 1-2 (2018); 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), https://www.copyright.gov/legislation/mma_conference_report.pdf (``Conf.
Rep.''); see also H.R. Rep. No. 115-651, at 2 (2018) (detailing the
House Judiciary Committee's efforts to review music copyright laws).
\3\ See 17 U.S.C. 115(b)(1), (c)(5) (2017); U.S. Copyright
Office, Copyright and the Music Marketplace 28-31 (2015), https://www.copyright.gov/policy/musiclicensingstudy/copyright-and-the-music-marketplace.pdf (describing operation of prior section 115
license).
---------------------------------------------------------------------------
The MMA amends this regime most significantly by establishing a new
blanket compulsory license that digital music providers may obtain to
make digital phonorecord deliveries (``DPDs'') of musical works,
including in the form of permanent downloads, limited downloads, or
interactive streams (referred to in the statute as ``covered
activity,'' where such activity qualifies for a compulsory license).\4\
Instead of licensing one song at a time by serving NOIs on individual
copyright owners, the blanket license will cover all musical works
available for compulsory licensing and will be centrally administered
by a mechanical licensing collective (``MLC''), which has recently been
designated by the Register of Copyrights.\5\ The blanket licensing
structure is designed to reduce the transaction costs associated with
song-by-song licensing by commercial services striving to offer ``as
much music as possible,'' while ``ensuring fair and timely payment to
all creators'' of the musical works used on these digital services.\6\
Under the MMA, the statutory licensing of phonorecords that are not
DPDs (e.g., CDs, vinyl, tapes, and other types of physical
phonorecords) continues to operate on a per-work, song-by-song basis,
the same as before.\7\
---------------------------------------------------------------------------
\4\ 17 U.S.C. 115(d)(1), (e)(7); see H.R. Rep. No. 115-651, at
4-6 (describing operation of the blanket license and the mechanical
licensing collective); S. Rep. No. 115-339, at 3-6 (same).
\5\ 17 U.S.C. 115(d)(1), (3); 84 FR 32274 (July 8, 2019).
\6\ S. Rep. No. 115-339, at 4, 8.
\7\ 17 U.S.C. 115(b)(1); see H.R. Rep. No. 115-651, at 3 (noting
``[t]his is the historical method by which record labels have
obtained compulsory licenses''); S. Rep. No. 115-339, at 3 (same);
see also U.S. Copyright Office, Orrin G. Hatch-Bob Goodlatte Music
Modernization Act, https://www.copyright.gov/music-modernization/.
---------------------------------------------------------------------------
The new blanket license will become available upon the statutory
license availability date (i.e., January 1, 2021).\8\ Before then, the
MMA ``creates a transition period in order to move from the current
work-by-work license to the new blanket license.'' \9\ On and after the
license availability date, a compulsory license to make and distribute
DPDs will generally only be available through the new blanket license,
apart from a limited exception for record companies to continue using
the song-by-song licensing process to make and distribute permanent
downloads embodying a specific individual musical work (called an
``individual download license'').\10\
---------------------------------------------------------------------------
\8\ 17 U.S.C. 115(d)(2)(B), (e)(15).
\9\ H.R. Rep. No. 115-651, at 10; S. Rep. No. 115-339, at 10;
see 17 U.S.C. 115(b)(2)(A), (d)(9), (d)(10). The Copyright Office
has separately issued regulatory updates related to digital music
providers' obligations during this transition period before the
blanket license is available. See 84 FR 10685 (Mar. 22, 2019); 83 FR
63061 (Dec. 7, 2018).
\10\ 17 U.S.C. 115(b)(2)(B), (b)(3), (e)(12); see H.R. Rep. No.
115-651, at 4; S. Rep. No. 115-339, at 3-4. As the legislative
history notes, the MMA ``maintains the `pass-through' license for
record labels to obtain and pass through mechanical license rights
for individual permanent downloads,'' but eliminates the pass-
through license for digital music providers ``to engage in
activities related to interactive streams or limited downloads.''
H.R. Rep. No. 115-651, at 4; S. Rep. No. 115-339, at 4.
---------------------------------------------------------------------------
As previously detailed by the Office,\11\ the MLC, through its
board of directors and task-specific committees,\12\ is responsible for
a variety of duties under the blanket license, including receiving
usage reports from digital music providers, collecting and distributing
royalties associated with those uses, identifying musical works
embodied in particular sound recordings, administering a process by
which copyright owners can claim ownership of musical works (and shares
of such works), and establishing a musical works database relevant to
these activities.\13\ By statute, digital music providers will bear the
reasonable costs of establishing and operating the MLC through an
administrative assessment, to be determined, if necessary, by the
Copyright Royalty Judges (``CRJs'').\14\ The MMA also permits the
Register to designate a digital licensee coordinator (``DLC'') to
represent licensees in the assessment proceeding, to serve as a non-
voting member of the MLC, and to carry out other functions.\15\
---------------------------------------------------------------------------
\11\ See generally 84 FR 32274; 83 FR 65747 (Dec. 21, 2018).
\12\ By statute, the MLC board must establish three committees.
First, an operations advisory committee will make recommendations
concerning the operations of the MLC, ``including the efficient
investment in and deployment of information technology and data
resources.'' 17 U.S.C. 115(d)(3)(D)(iv). Second, an unclaimed
royalties oversight committee will establish policies and procedures
necessary to undertake a fair distribution of unclaimed royalties.
Id. at 115(d)(3)(D)(v), (d)(3)(J)(ii). Third, a dispute resolution
committee will establish policies and procedures for copyright
owners to address disputes relating to ownership interests in
musical works, including a mechanism to hold disputed funds pending
the resolution of the dispute. Id. at 115(d)(3)(D)(vi),
(d)(3)(H)(ii), (d)(3)(K).
\13\ Id. at 115(d)(3)(C).
\14\ Id. at 115(d)(7)(D).
\15\ Id. at 115(d)(5)(B); see also id. at 115(d)(3)(D)(i)(IV),
(d)(5)(C).
---------------------------------------------------------------------------
Effective July 8, 2019, following a comprehensive public process,
the Register, with the approval of the Librarian of Congress, selected
and designated entities and their individual board members as the MLC
and DLC, respectively.\16\ The Office also adopted technical amendments
to its relevant pre-MMA regulations, including those pertaining to NOIs
and statements of account, to harmonize them with the MMA's
requirements.\17\ Those amendments were generally directed at the
present transition period before the blanket license becomes available.
They did not speak to compulsory licensing of DPDs under the new
blanket license, which is addressed through this notification of
inquiry.
---------------------------------------------------------------------------
\16\ 84 FR at 32295.
\17\ 84 FR 10685; 83 FR 63061.
---------------------------------------------------------------------------
The MMA enumerates several regulations that the Copyright Office is
specifically directed to promulgate to govern the new blanket licensing
regime, including with respect to notices of license, notices of
nonblanket activity, reports of usage, database information, database
usability, interoperability, and usage restrictions, and the handling
of confidential information. Additionally, Congress invested the
Copyright Office with ``broad regulatory authority'' \18\ to ``conduct
such proceedings and adopt such regulations as may be necessary or
appropriate to effectuate the provisions of [the MMA pertaining to the
blanket license].'' \19\ The legislative history contemplates that the
Office will ``thoroughly review[ ]'' policies and procedures
established by the MLC and its three committees, and promulgate
regulations that ``balance[ ] the need to protect the public's interest
with the need to let the new collective operate without over-
regulation.'' \20\ It further
[[Page 49968]]
states that ``[t]he Copyright Office has the knowledge and expertise
regarding music licensing through its past rulemakings and recent
assistance to the Committee[s] during the drafting of this
legislation.'' \21\ Together, the statute and legislative history make
clear that Congress intended for the Office to oversee and regulate the
MLC as necessary and appropriate,\22\ as well as periodically review
that designation.\23\ Indeed, Congress acknowledged that ``[a]lthough
the legislation provides specific criteria for the collective to
operate, it is to be expected that situations will arise that were not
contemplated by the legislation,'' and that ``[t]he Office is expected
to use its best judgement in determining the appropriate steps in those
situations.'' \24\
---------------------------------------------------------------------------
\18\ H.R. Rep. No. 115-651, at 5-6; S. Rep. No. 115-339, at 5;
Conf. Rep. at 4.
\19\ 17 U.S.C. 115(d)(12)(A).
\20\ H.R. Rep. No. 115-651, at 5-6, 14; S. Rep. No. 115-339, at
5, 15; Conf. Rep. at 4, 12. The Conference Report further
contemplates that the Office's review will be important because the
MLC must operate in a manner that can gain the trust of the entire
music community, but can only be held liable under a standard of
gross negligence when carrying out certain of the policies and
procedures adopted by its board. Conf. Rep. at 4.
\21\ H.R. Rep. No. 115-651, at 14; S. Rep. No. 115-339, at 15;
Conf. Rep. at 12.
\22\ The Office notes that in the MLC designation proceeding
many commenters supported the Office performing a meaningful
oversight role to the extent permissible under the statute. 84 FR at
32280 n.120.
\23\ 17 U.S.C. 115(d)(3)(B)(ii).
\24\ H.R. Rep. No. 115-651, at 14; S. Rep. No. 115-339, at 15;
Conf. Rep. at 12.
---------------------------------------------------------------------------
The Office has recently addressed adjacent matters in two
proceedings, concerning updating of the relevant section 115
regulations to account for the current interim period and the
Register's designation of the MLC and DLC.\25\ The designation of the
MLC received multiple public comments, some with respect to issues such
as the MLC's prospective governance practices and performance of its
duty to eventually distribute unclaimed accrued royalties following a
proscribed holding period, that the Office noted at the time were also
able to be addressed in additional ways by the statute, including this
delegation of regulatory authority.\26\ Taking seriously Congress's
instructions to exercise its regulatory authority ``to ensure the fair
treatment of interested parties'' by the MLC,\27\ in designating the
MLC and DLC, the Office stated that it ``intends to conduct its
oversight role in a fair and impartial manner; songwriters are
encouraged to participate in these future rulemakings.'' \28\
---------------------------------------------------------------------------
\25\ See 84 FR 32274; 84 FR 10685; 83 FR 63061.
\26\ 84 FR at 32283.
\27\ H.R. Rep. No. 115-651, at 6; S. Rep. No. 115-339, at 5;
Conf. Rep. at 4.
\28\ 84 FR at 32283.
---------------------------------------------------------------------------
B. Overview of the Rulemaking Process
To establish necessary and appropriate regulations to govern the
new blanket licensing system, the Office now seeks public comment on
the subjects discussed below. The Copyright Office is issuing this
notification of inquiry as the first step in promulgating the
regulations required by the MMA to govern the blanket license regime.
After reviewing the comments received in response, the Office plans to
publish multiple notices of proposed rulemaking, each focusing on one
or more of the regulatory categories discussed below. The Office has
concluded that this phasing is the best way for it to efficiently and
thoughtfully conduct the relevant regulatory proceedings in light of
the upcoming license availability date and the Office's available
resources. To aid the Office's review, it is requested that where a
submission responds to more than one of the below categories, it be
divided into discrete sections that have clear headings to indicate the
category being discussed in each section. Comments addressing a single
category should also have a clear heading to indicate which category it
discusses.
In responding to this notification, commenters are encouraged to
indicate whether any of the below categories should be prioritized over
others with respect to the order in which the Office addresses them.
For example, it may be beneficial to establish rules governing the
musical works database and reports of usage early on to aid the MLC in
building its database infrastructure and developing related IT systems.
As another example, establishing confidentiality rules sooner rather
than later may help the MLC and DLC share information as effectively
and efficiently as possible as they both get ready for the license
availability date.
On the other hand, for example, while any relevant regulatory
activity regarding the MLC's obligation to distribute unclaimed accrued
royalties (e.g., engaging in good-faith efforts to publicize notice
relating to pending distributions at least ninety days in advance \29\)
would relate to important, core responsibilities of the MLC, it appears
logical to prioritize other regulatory provisions directed at more
imminent MLC functions. Unlike most of the other subjects discussed
below, which must be addressed before the January 1, 2021 license
availability date, no unclaimed accrued royalties may be distributed
until January 1, 2023, at the earliest.\30\ Further, the Office is
separately required by the MMA to undertake a study, to be concluded by
July 2021, that recommends best practices for the MLC to identify and
locate copyright owners with unclaimed royalties, encourage copyright
owners to claim their royalties, and reduce the incidence of unclaimed
royalties.\31\ The Office plans to commence that study this winter and
looks forward to having broad industry participation, including by
interested songwriters, regarding this important issue.
---------------------------------------------------------------------------
\29\ See 17 U.S.C. 115(d)(3)(J)(iii)(II)(dd).
\30\ Id. at 115(d)(3)(H)(i), (J)(i)(I); see 84 FR at 32291
(noting the Office's and the designated MLC's agreement on this
issue).
\31\ Public Law 115-264, sec. 102(f), 132 Stat. 3676, 3722-23.
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The Office welcomes parties to file joint comments on issues of
common agreement and consensus.\32\ The Office will also consider how
to utilize informal meetings to gather additional information on
discrete issues prior to publishing notices of proposed rulemaking by
establishing guidelines for ex parte communications. Relevant
guidelines will be issued at a later date on https://www.copyright.gov/rulemaking/mma-implementation/, and will be similar to those imposed in
other proceedings.\33\ Any such communications will be on the record to
ensure the greatest possible transparency, but would only supplement,
not substitute for, the written record.
---------------------------------------------------------------------------
\32\ See, e.g., Joint Comments of Nat'l Music Publishers' Ass'n
& Dig. Media Ass'n Submitted in Response to Copyright Royalty
Board's November 5, 2018, Notification of Inquiry (Dec. 10, 2018)
(regarding regulations relating to enactment of the MMA); Joint
Comments of Dig. Media Ass'n, Nat'l Music Publishers' Ass'n,
Recording Indus. Ass'n of Am., Harry Fox Agency, Inc., & Music
Reports, Inc. Submitted in Response to U.S. Copyright Office's July
27, 2012, Notice of Proposed Rulemaking (Oct. 25, 2012) (regarding
section 115 statement of account regulations).
\33\ See, e.g., 83 FR at 65753-54 (identifying guidelines for ex
parte communications in MLC and DLC designation proceeding); 82 FR
49550, 49563 (Oct. 26, 2017) (identifying guidelines for ex parte
communications in section 1201 rulemaking); 82 FR 58153, 58154 (Dec.
11, 2017) (identifying guidelines for ex parte communications in
rulemaking regarding cable, satellite, and DART license reporting
practices).
---------------------------------------------------------------------------
While all public comments are welcome, as applicable, the Office
encourages parties to provide specific proposed regulatory language for
the Office to consider and for others to comment upon. Similarly,
commenters replying to proposed language may want to offer alternate
language for consideration.
Commenters are reminded that while the Office's regulatory
authority is relatively broad,\34\ it is obviously constrained by the
law Congress enacted; the Office can fill statutory gaps, but will not
entertain proposals that conflict with the statute.\35\
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\34\ See Conf. Rep. at 4, 12 (stating that the Office has
``broad regulatory authority'' to promulgate regulations that
``balance[ ] the need to protect the public's interest with the need
to let the new collective operate without over-regulation'').
\35\ See, e.g., Nat'l Cable & Telecomms. Ass'n v. Brand X
internet Servs., 545 U.S. 967, 980 (2005) (``[A]mbiguities in
statutes within an agency's jurisdiction to administer are
delegations of authority to the agency to fill the statutory gap in
reasonable fashion.'') (citing Chevron, U.S.A., Inc. v. Nat. Res.
Def. Council, Inc., 467 U.S. 837 (1984)); see also Conf. Rep. at 12
(acknowledging that ``it is to be expected that situations will
arise that were not contemplated by the legislation,'' and that
``[t]he Office is expected to use its best judgement in determining
the appropriate steps in those situations'').
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[[Page 49969]]
II. Subjects of Inquiry
A. Notices of License and Nonblanket Activity
The MMA requires entities engaging in covered activities to file
notice with the MLC regarding such activities; the notice will vary
depending upon whether or not the entity is seeking a blanket license
with respect to this activity. The Copyright Office must proscribe
regulations regarding the form and content for both notices of license
and notices of nonblanket activity.
1. Notices of License
To obtain a blanket license, a digital music provider must submit a
notice of license (``NOL'') to the MLC ``that specifies the particular
covered activities in which the digital music provider seeks to
engage.'' \36\ The MLC is to ``receive, review, and confirm or reject
notices of license from digital music providers,'' and is required to
``maintain a current, publicly accessible list of blanket licenses that
includes contact information for the licensees and the effective dates
of such licenses.'' \37\ The statute requires that NOLs ``comply in
form and substance with requirements that the Register of Copyrights
shall establish by regulation.'' \38\ The Office seeks public input on
any issues that should be considered relating to the form and substance
of NOLs, including but not limited to the necessary level of detail
(e.g., whether NOLs should generally be similar in scope to the
Office's current notice of use form under sections 112 and 114,\39\ and
more specifically, whether a digital music provider should be required
or encouraged to describe its interactive streaming service in
additional detail, such as by providing the specific types of offerings
comprising that service).
---------------------------------------------------------------------------
\36\ 17 U.S.C. 115(d)(2)(A), (e)(22).
\37\ Id. at 115(d)(3)(F)(i); see also id. at (d)(2)(A)(ii)-(iv)
(discussing rejection and cure of NOLs).
\38\ Id. at 115(d)(2)(A)(i).
\39\ The notice of use form is available at https://www.copyright.gov/forms/form112-114nou.pdf.
---------------------------------------------------------------------------
2. Notices of Nonblanket Activity
Under the MMA, certain entities engaging in covered activities
pursuant to voluntary licenses or individual download licenses that
meet certain criteria must comply with various obligations related to
the blanket compulsory license even though they do not operate under a
blanket license.\40\ These significant nonblanket licensees (``SNBLs'')
must submit to the MLC notices of nonblanket activity (``NNBAs''),
reports of usage, and any required payments of the administrative
assessment.\41\ According to the legislative history, SNBLs are
required to make these filings and contribute to the administrative
assessment ``because they are presumed to benefit from'' the new
musical works database that the MLC is tasked with maintaining and ``as
a way to avoid parties attempting to avoid funding of the mechanical
licensing collective by engaging in direct deals outside the blanket
license.'' \42\
---------------------------------------------------------------------------
\40\ 17 U.S.C. 115(d)(1)(C)(ii), (d)(6), (e)(31).
\41\ Id. at 115(d)(6)(A).
\42\ H.R. Rep. No. 115-651, at 12; S. Rep. No. 115-339, at 12;
Conf. Rep. at 10.
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Specifically, the statute requires SNBLs to submit NNBAs to the MLC
no later than forty-five days after the license availability date, or
forty-five days after the end of the first full month in which an
entity initially qualifies as a SNBL, whichever occurs later.\43\ NNBAs
are provided ``for purposes of notifying the mechanical licensing
collective that the licensee has been engaging in covered activities.''
\44\ The MLC will ``receive notices of nonblanket activity from
significant nonblanket licensees,'' and is required to ``maintain a
current, publicly accessible list of notices of nonblanket activity
that includes contact information for significant nonblanket licensees
and the dates of receipt of such notices.'' \45\ The statute also
requires that NNBAs ``comply in form and substance with requirements
that the Register of Copyrights shall establish by regulation.'' \46\
The Office seeks public input on any issues that should be considered
relating to the form and substance of NNBAs, including, for example,
whether an NNBA should be required to be updated or renewed, and the
level of description of activity it should contain.
---------------------------------------------------------------------------
\43\ 17 U.S.C. 115(d)(6)(A)(i).
\44\ Id. at 115(e)(23); see also id. at 115(d)(6)(A)(i)
(requiring a copy to be made available to the DLC).
\45\ Id. at 115(d)(3)(F)(ii).
\46\ Id. at 115(d)(6)(A)(i).
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B. Data Collection and Delivery Efforts
While the MLC is ultimately tasked with the core project of
matching musical works to sound recordings embodying those works, and
identifying and locating the copyright owners of those works (and
shares thereof), the MMA also outlines roles for certain digital music
providers and copyright owners to facilitate this task by collecting
and providing related data to the MLC.
1. Collection Efforts by Digital Music Providers
Digital music providers using the blanket license must ``engage in
good-faith, commercially reasonable efforts to obtain from sound
recording copyright owners and other licensors of sound recordings made
available through the service of such digital music provider
information concerning'': (1) Sound recording copyright owners,
producers, International Standard Recording Codes (``ISRCs''), and
other information commonly used in the industry to identify sound
recordings and match them to the musical works the sound recordings
embody; and (2) the authorship and ownership of musical works,
including songwriters, publisher names, ownership shares, and
International Standard Musical Work Codes (``ISWCs'').\47\
---------------------------------------------------------------------------
\47\ Id. at 115(d)(4)(B).
---------------------------------------------------------------------------
This obligation is directly connected to the reports of usage
discussed below, for which much of the statutorily enumerated
information is only required ``to the extent acquired by the digital
music provider in connection with its use of sound recordings of
musical works to engage in covered activities, including pursuant to
[this obligation].'' \48\ Thus, it is important that digital music
providers genuinely engage in appropriate efforts to obtain this
information both from record labels and other licensors of sound
recordings (e.g., other distributors of sound recordings such as
TuneCore, CD Baby, or DistroKid). The Office seeks public input as to
whether it is necessary and appropriate for the Office to promulgate
any regulations concerning this provision, including but not limited to
what constitutes ``good-faith, commercially reasonable efforts.''
---------------------------------------------------------------------------
\48\ Id. at 115(d)(4)(A)(ii).
---------------------------------------------------------------------------
2. Collection Efforts by Copyright Owners
Relatedly, the MMA also obligates musical work copyright owners
with works that are listed in the MLC's database to ``engage in
commercially reasonable efforts'' to provide to the MLC for the
database, if not already listed, ``information regarding the names of
the sound recordings in which that copyright owner's musical works (or
shares thereof) are embodied, to the extent practicable.'' \49\ The
Office seeks
[[Page 49970]]
public input as to whether it is necessary and appropriate for the
Office to promulgate any regulations concerning this provision,
including but not limited to what types of efforts would be
``commercially reasonable efforts.''
---------------------------------------------------------------------------
\49\ Id. at 115(d)(3)(E)(iv).
---------------------------------------------------------------------------
C. Usage and Reporting Requirements
As noted, following the filing of a notice of license, a digital
music provider making use of the blanket license must engage in efforts
to collect information to assist in matching copyright owners to
musical works made available through its service, and report usage of
such works to the MLC. The digital music provider must also pay
appropriate royalties to the MLC under the blanket license. Because the
usage reports will convey a large quantity of data central to the MLC's
core administrative duties of matching musical works to sound
recordings, and copyright owners to musical works, as well as
collecting and distributing accrued royalties for uses of these works
under the blanket license, these usage reports may play a key role in
the MMA's overall legal framework to provide for the matching of songs
played on digital music services to copyright owners, locating the
owners, and ensuring they are paid their earned royalties.
1. Reports of Usage and Payment--Digital Music Providers
Among other things, the blanket compulsory license is conditioned
upon the digital music provider reporting and paying royalties to the
MLC on a monthly basis, due forty-five calendar days after the end of
the monthly reporting period.\50\ The MMA requires that reporting and
payment be done in accordance with both sections 115(c)(2)(I) and
115(d)(4)(A)(ii), which are discussed below.\51\
---------------------------------------------------------------------------
\50\ Id. at 115(d)(4)(A)(i).
\51\ Id. at 115(d)(4)(A)(i).
---------------------------------------------------------------------------
First, section 115(c)(2)(I) is the generally applicable reporting
and payment provision for the compulsory license, augmented by section
115(d)(4)(A) with respect to the blanket compulsory license
specifically. The former section predates the MMA and applies to both
blanket and non-blanket compulsory licenses, except that statements are
due within twenty days for non-blanket compulsory licenses rather than
forty-five days.\52\ ``Each monthly payment shall be made under oath
and shall comply with requirements that the Register of Copyrights
shall prescribe by regulation.'' \53\ In addition, the Office must also
``prescribe regulations under which detailed cumulative annual
statements of account, certified by a certified public accountant,
shall be filed for every compulsory license.'' \54\ Section
115(c)(2)(I) further provides that ``[t]he regulations covering both
the monthly and the annual statements of account shall prescribe the
form, content, and manner of certification with respect to the number
of records made and the number of records distributed.'' \55\
---------------------------------------------------------------------------
\52\ See id. at 115(c)(2)(I), (d)(4)(A)(i).
\53\ Id. at 115(c)(2)(I).
\54\ Id.
\55\ Id.
---------------------------------------------------------------------------
The Office's current statement of account regulations promulgated
under section 115(c)(2)(I) are located in 37 CFR part 210, subpart B.
After passage of the MMA, the Office made technical amendments to those
regulations to conform them to the MMA with respect to non-blanket
compulsory licenses.\56\ The amendments made clear that those
regulations will not apply to the blanket license.\57\ While the Office
plans to now establish separate regulations governing the blanket
license, there may be existing provisions in the current regulations in
part 210 that would also be relevant to the blanket license that
commenters may wish to evaluate and identify for the Office to consider
carrying over.
---------------------------------------------------------------------------
\56\ 84 FR 10685; 83 FR 63061.
\57\ 37 CFR 210.11 (``[T]his subpart shall not apply where a
digital music provider reports and pays royalties under a blanket
license under 17 U.S.C. 115(d)(4)(A)(i).'').
---------------------------------------------------------------------------
Second, section 115(d)(4)(A)(ii) addresses submissions made to the
MLC by digital music providers under the blanket license, calling them
``reports of usage'' rather than ``statements of account.'' This
provision contains additional requirements not listed in section
115(c)(2)(I). Reports of usage ``shall provide usage data for musical
works used under the blanket license and usage data for musical works
used in covered activities under voluntary licenses and individual
download licenses.'' \58\ Reports must contain the following
information: (1) Identifying information for the sound recording
embodying a musical work, including sound recording name, featured
artist, and, to the extent acquired by the digital music provider in
connection with its engagement in covered activities, sound recording
copyright owner, producer, ISRC, and other information commonly used to
identify sound recordings and match them to musical works; (2) to the
extent acquired by the digital music provider in the metadata provided
by licensors of sound recordings in connection with its engagement in
covered activities, information concerning authorship and ownership of
the applicable rights in the musical work embodied in the sound
recording (including each songwriter, publisher name, and respective
ownership share) and the ISWC; and (3) the number of DPDs of the sound
recording, including limited downloads and interactive streams.\59\
Legislative history contemplates that reports ``should be consistent
with then-current industry practices regarding how such limited
downloads and interactive streams are tracked and reported.'' \60\ In
addition, reports of usage must also identify and provide contact
information for all musical work copyright owners for works embodied in
sound recordings as to which a voluntary, rather than a blanket,
license is in effect with respect to the uses being reported.\61\
---------------------------------------------------------------------------
\58\ 17 U.S.C. 115(d)(4)(A)(ii).
\59\ Id. at 115(d)(4)(A)(ii)(I).
\60\ H.R. Rep. No. 115-651, at 12; S. Rep. No. 115-339, at 13;
Conf. Rep. at 10.
\61\ 17 U.S.C. 115(d)(4)(A)(ii)(II).
---------------------------------------------------------------------------
In addition to the statutorily-prescribed categories, reports of
usage must also contain ``such other information as the Register of
Copyrights shall require by regulation.'' \62\ These reports of usage
must be ``in a machine-readable format that is compatible with the
information technology systems of the mechanical licensing collective
and meets the requirements of regulations adopted by the Register of
Copyrights.'' \63\
---------------------------------------------------------------------------
\62\ Id. at 115(d)(4)(A)(ii)(III).
\63\ Id. at 115(d)(4)(A)(iii).
---------------------------------------------------------------------------
The new blanket licensing framework was adopted against the
widespread practice of voluntary or ``direct'' licensing of mechanical
rights through an intermediary agency such as Harry Fox Agency or by
the music publisher directly.\64\ In responding to this notification,
the Office welcomes information regarding how industry customs
regarding voluntary licensing practices that vary from the prior
compulsory licensing regulations may be relevant to establishing future
rules for reports of usage, including suggestions regarding any
additional data, beyond the statutorily required data discussed above,
the Office should proscribe to be included in usage reports.\65\
---------------------------------------------------------------------------
\64\ U.S. Copyright Office, Copyright and the Music Marketplace
30-31.
\65\ See, e.g., id. (noting common practice for direct licenses
to be reported on a quarterly rather than monthly basis).
---------------------------------------------------------------------------
Finally, the Office shall also adopt regulations ``regarding
adjustments to reports of usage by digital music
[[Page 49971]]
providers, including mechanisms to account for overpayment and
underpayment of royalties in prior periods.'' \66\
---------------------------------------------------------------------------
\66\ 17 U.S.C. 115(d)(4)(A)(iv)(II).
---------------------------------------------------------------------------
The Office seeks public input on any issues that should be
considered relating to reports of usage and payment to be provided to
the MLC by digital music providers under the blanket license, including
specifically adjustments to these reports. These issues include
specific information technology requirements for these reports, as well
as any additional requirements relating to cumulative annual statements
of account.\67\
---------------------------------------------------------------------------
\67\ See S. Rep. No. 115-339, at 24-25 (``The Register shall
specify information technology requirements of such reports along
with the maintenance of the records of use.'').
---------------------------------------------------------------------------
2. Reports of Usage--SNBLs
SNBLs are also required to ``provide monthly reports of usage'' to
the MLC within forty-five days after the end of the month being
reported, ``contain[ing] the information described in [section
115(d)](4)(A)(ii)'' and ``accompanied by any required payment of the
administrative assessment.'' \68\ The Office seeks public input on any
issues that should be considered relating to reports of usage to be
provided to the MLC by SNBLs, including but not limited to how such
reports may differ from the reports filed by digital music providers
under the blanket license.
---------------------------------------------------------------------------
\68\ 17 U.S.C. 115(d)(6)(A)(ii).
---------------------------------------------------------------------------
3. Records of Use Maintenance and Access
Relatedly, the MMA directs the Copyright Office to adopt
regulations ``setting forth requirements under which records of use
shall be maintained and made available to the mechanical licensing
collective by digital music providers engaged in covered activities
under a blanket license.'' \69\ The Office seeks public input on any
issues that should be considered relating to the maintenance and access
of such records of use, which presumably could be used to substantiate
and interpret the data included on usage reports.
---------------------------------------------------------------------------
\69\ Id. at 115(d)(4)(A)(iii), (iv)(I).
---------------------------------------------------------------------------
D. Transfer and Reporting of Unclaimed Accrued Royalties to the MLC at
the End of the Transition Period
A related topic concerns the historical reporting that digital
music providers will provide to the MLC when transferring and reporting
to the MLC any unclaimed accrued royalties remaining with digital music
providers at the end of the transition period. As noted above, the
Office previously engaged in a rulemaking to address the current
transition period before the blanket license becomes available.\70\ The
MMA requires that within forty-five days after the license availability
date, a digital music provider seeking to avail itself of the MMA's
limitation on liability must transfer all accrued royalties for any
unmatched musical works (or shares) to the MLC ``accompanied by a
cumulative statement of account that includes all of the information
that would have been provided to the copyright owner had the digital
music provider been serving monthly statements of account on the
copyright owner from initial use of the work in accordance with
[section 115] and applicable regulations.'' \71\ The Office adopted
regulations that follow the statute, specifying that digital music
providers must pay royalties and provide cumulative statements of
account to the MLC in compliance with the Office's preexisting monthly
statement of account regulations in 37 CFR 210.16.\72\ The Office
further required that these statements include ``a clear identification
of the total period covered by the cumulative statement and the total
royalty payable for the period.'' \73\
---------------------------------------------------------------------------
\70\ 84 FR 10685; 83 FR 63061.
\71\ 17 U.S.C. 115(d)(10)(B)(iv)(III)(aa).
\72\ 37 CFR 210.20(b)(3)(i).
\73\ Id.
---------------------------------------------------------------------------
While the Office enacted the rule pursuant to a public process, the
Office did not receive any comments.\74\ Throughout the transition
period, including during the MLC designation proceeding, there has been
persistent concern about the ``black box'' of unclaimed royalties,
including its amount and treatment by digital music providers and the
MLC. Consequently, the Office is providing another opportunity for the
public to comment on whether there should be any adjustment to the
current regulations governing the cumulative statements of account
required by the statute to accompany unclaimed royalties that are to be
transferred from digital music providers to the MLC within forty-five
days of the license availability date. The Office seeks public input on
any issues that should be considered relating to the transfer and
reporting of unclaimed royalties by digital music providers to the MLC.
---------------------------------------------------------------------------
\74\ See 84 FR 10685; 83 FR 63061.
---------------------------------------------------------------------------
E. Musical Works Database Information
A core aspect of the MLC's responsibilities includes identifying
musical works and copyright owners, matching them to sound recordings
(and addressing disputes), and ensuring that songwriters and other
copyright owners get paid the royalties they are due. To that end, the
MLC will establish and maintain a free public database of musical work
ownership information that also identifies the sound recordings in
which the musical works are embodied.\75\ As the legislative history
explains:
---------------------------------------------------------------------------
\75\ 17 U.S.C. 115(d)(3)(E), (e)(20).
For far too long, it has been difficult to identify the
copyright owner of most copyrighted works, especially in the music
industry where works are routinely commercialized before all of the
rights have been cleared and documented. This has led to significant
challenges in ensuring fair and timely payment to all creators even
when the licensee can identify the proper individuals to pay. With
millions of songs now available to subscribers worldwide, technology
also has a role to play through digital fingerprinting of a sound
recording. However, there is no reliable, public database to link
sound recordings with their underlying musical works. Unmatched
works routinely occur as a result of different spellings of artist
names and song titles. Even differing punctuation in the name of a
work has been enough to create unmatched works. . . . Music metadata
has more often been seen as a competitive advantage for the party
that controls the database, rather than as a resource for building
an industry on. . . . This situation 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.\76\
---------------------------------------------------------------------------
\76\ S. Rep. No. 115-339, at 8; Conf. Rep. at 6; see also H.R.
Rep. No. 115-651, at 7-8.
With respect to musical works that have been matched to copyright
owners,\77\ by statute, the MLC's database must include: (1) The title
of the musical work; (2) the copyright owner of the work (or share
thereof), and the ownership percentage of that owner; (3) contact
information for such copyright owner; and (4) to the extent reasonably
available to the MLC, (a) the ISWC for the work, and (b) identifying
information for sound recordings in which the musical work is embodied,
including the name of the sound recording, featured artist, sound
recording copyright owner, producer, ISRC, and other information
commonly used to assist in associating sound recordings with musical
works.\78\
---------------------------------------------------------------------------
\77\ See 17 U.S.C. 115(e)(17).
\78\ Id. at 115(d)(3)(E)(ii).
---------------------------------------------------------------------------
With respect to unmatched musical works,\79\ by statute, the
database must include, to the extent reasonably available to the MLC:
(1) The title of the musical work; (2) the ownership percentage for
which an owner has not been identified; (3) if a copyright owner
[[Page 49972]]
has been identified but not located, the identity of such owner and the
ownership percentage of that owner; (4) identifying information for
sound recordings in which the work is embodied, including sound
recording name, featured artist, sound recording copyright owner,
producer, ISRC, and other information commonly used to assist in
associating sound recordings with musical works; and (5) any additional
information reported to the MLC that may assist in identifying the
work.\80\
---------------------------------------------------------------------------
\79\ See id. at 115(e)(35).
\80\ Id. at 115(d)(3)(E)(iii).
---------------------------------------------------------------------------
For both categories (matched and unmatched works), the MLC's
database must also include ``such other information'' ``as the Register
of Copyrights may prescribe by regulation.'' \81\ The legislative
history provides that the Office ``shall use its judgement to determine
what is an appropriate expansion of the required fields, but shall not
adopt new fields that have not become reasonably accessible and used
within the industry unless there is widespread support for the
inclusion of such fields.'' \82\ The legislative history also notes
specifically that the Office ``may at some point wish to consider . . .
whether standardized identifiers for individuals would be appropriate,
or even audio fingerprints.'' \83\
---------------------------------------------------------------------------
\81\ Id. at 115(d)(3)(E)(ii)(V), (iii)(II).
\82\ H.R. Rep. No. 115-651, at 8; S. Rep. No. 115-339, at 8;
Conf. Rep. at 7.
\83\ H.R. Rep. No. 115-651, at 8; S. Rep. No. 115-339, at 8;
Conf. Rep. at 7.
---------------------------------------------------------------------------
Issues related to the information in the musical works database are
closely connected, and equally important, to questions regarding the
data collection efforts and reporting by digital music providers that
will help populate the database. Much of the required data will likely
come from, or at least be able to cohere with, the reports of usage
submitted to the MLC by digital music providers, and so similar issues
may be addressed in the promulgation of these related regulations, such
as those concerning what information is considered standard or
reasonably available. The Office seeks public input on any issues that
should be considered relating to information to be included in the
MLC's musical works database, including what, if any, specific
additional categories of information might be appropriate to proscribe
under these standards, keeping in mind the interrelationship between
this information and the above-discussed data collection efforts and
usage reporting.
F. Musical Works Database Usability, Interoperability, and Usage
Restrictions
The MMA also directs the Copyright Office to ``establish
requirements by regulations to ensure the usability, interoperability,
and usage restrictions of the [MLC's] musical works database.'' \84\
The statute provides that the database must ``be made available to
members of the public in a searchable, online format, free of charge.''
\85\ The MLC must make the data available ``in a bulk, machine-readable
format, through a widely available software application,'' to digital
music providers operating under valid NOLs, compliant SNBLs, authorized
vendors of such digital music providers or SNBLs, and the Copyright
Office, free of charge, and to ``[a]ny other person or entity for a fee
not to exceed the marginal cost to the mechanical licensing collective
of providing the database to such person or entity.'' \86\ The
legislative history adds that ``[i]ndividual lookups of works shall be
free although the collective may implement reasonable steps to block
efforts to bypass the marginal cost recovery for bulk access if it
appears that one or more entities are attempting to download the
database in bulk through repeated queries.'' \87\ The legislative
history also states that ``there shall be no requirement that a
database user must register or otherwise turn over personal information
in order to obtain the free access required by the legislation.'' \88\
---------------------------------------------------------------------------
\84\ 17 U.S.C. 115(d)(3)(E)(vi).
\85\ Id. at 115(d)(3)(E)(v).
\86\ Id. at 115(d)(3)(E)(v).
\87\ H.R. Rep. No. 115-651, at 8; S. Rep. No. 115-339, at 8-9;
Conf. Rep. at 7.
\88\ H.R. Rep. No. 115-651, at 8; S. Rep. No. 115-339, at 9;
Conf. Rep. at 7.
---------------------------------------------------------------------------
During the MLC designation proceeding, Mechanical Licensing
Collective, Inc. (``MLCI''), the entity designated as the MLC, noted
the importance of compatibility with existing music industry standards,
including communicating information in accordance with the Common Works
Registration (``CWR'') format and DDEX standards, and a willingness to
explore other relevant existing or emerging standards or open
protocols.\89\ MLCI stated that it ``strongly support[s] the adoption
of standards, formats, and frameworks that allow information to be
easily and accurately shared throughout the industry,'' and that ``good
systems functioning and architectural practices instruct that
components should have proper APIs.'' \90\ MLCI also committed to
establishing an information security management system that is
certified with ISO/IEC 27001 and meets the EU General Data Protection
Regulation requirements, and other applicable laws.\91\
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\89\ 84 FR at 32287 (citing Proposal of Mechanical Licensing
Collective, Inc. Submitted in Response to U.S. Copyright Office's
December 21, 2018, Notice of Inquiry, at 35, 38, 57-58 (Mar. 21,
2019) (``MLCI Proposal'').
\90\ MLCI Proposal at 46-47.
\91\ 84 FR at 32290 (citing MLCI Proposal at 50).
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The Office seeks public input on any issues that should be
considered relating to the usability, interoperability, and usage
restrictions of the MLC's musical works database, including but not
limited to any technical or other specific language that might be
helpful to consider in promulgating these regulations, discussion of
the pros and cons of applicable standards, and whether historical
snapshots of the database should be maintained to track ownership
changes over time.
G. MLC Payments and Statements of Account
Next, the Office seeks comment regarding the MLC's payment and
reporting obligations with respect to royalties that have been matched
to copyright owners, both for works that are matched at the time the
MLC receives payment from digital music providers and works that are
matched later during the statutorily prescribed holding period for
unmatched works. Historically, under the song-by-song statutory
license, copyright owners or their authorized agents received royalty
payments accompanied by statements of account from the licensee.\92\
Under the MMA, digital music providers with blanket licenses will
instead report and pay royalties to the MLC. The statute provides that
``[u]pon receiving reports of usage and payments of royalties from
digital music providers for covered activities, the mechanical
licensing collective shall'' ``distribute royalties to copyright owners
in accordance with the usage and other information contained in such
reports, as well as the ownership and other information contained in
the records of the collective.'' \93\ When a copyright owner who is
owed unmatched royalties becomes identified and located, the MLC must
pay applicable accrued royalties to the copyright owner, ``accompanied
by a cumulative statement of account reflecting usage of such work and
accrued royalties based on information provided by digital
[[Page 49973]]
music providers to the mechanical licensing collective.'' \94\
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\92\ See 37 CFR 210.16(g)(1), 210.17(g)(1) (2017); 17 U.S.C.
115(c)(6) (2017) (``If the copyright owner does not receive the
monthly payment and the monthly and annual statements of account
when due . . . .'') (emphasis added).
\93\ 17 U.S.C. 115(d)(3)(G)(i)(II).
\94\ Id. at 115(d)(3)(I)(ii).
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The Office seeks public input as to potential regulations regarding
what reporting should be required of the MLC when distributing
royalties to matched copyright owners in the ordinary course under
section 115(d)(3)(G)(i)(II), as well as input concerning the timing of
such regular distributions. The Office also welcomes input on any
issues that should be considered relating to the cumulative statements
of account to be provided under section 115(d)(3)(I)(ii), relating to
payments due to copyright owners of a previously unmatched work (or
share thereof) who is later identified and located by the MLC,
including what additional material, if any, may be required in these
statements as compared to routine periodic distributions for already
matched works.
H. Treatment of Confidential and Other Sensitive Information
The MMA broadly directs the Copyright Office to ``adopt regulations
to provide for the appropriate procedures to ensure that confidential,
private, proprietary, or privileged information contained in the
records of the mechanical licensing collective and digital licensee
coordinator is not improperly disclosed or used, including through any
disclosure or use by the board of directors or personnel of either
entity, and specifically including the unclaimed royalties oversight
committee and the dispute resolution committee of the mechanical
licensing collective.'' \95\
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\95\ Id. at 115(d)(12)(C).
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The MMA additionally makes several explicit references to the
Office's regulations governing the treatment of confidential and other
sensitive information in various circumstances, including with respect
to: (1) ``all material records of the operations of the mechanical
licensing collective''; \96\ (2) steps the MLC must take to ``safeguard
the confidentiality and security of usage, financial, and other
sensitive data used to compute market shares'' when distributing
unclaimed accrued royalties; \97\ (3) steps the MLC and DLC must take
to ``safeguard the confidentiality and security of financial and other
sensitive data shared'' by the MLC to the DLC about SNBLs; \98\ (4)
voluntary licenses administered by the MLC; \99\ (5) examination of the
MLC's ``books, records, and data'' pursuant to audits by copyright
owners; \100\ and (6) examination of digital music providers' ``books,
records, and data'' pursuant to audits by the MLC.\101\
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\96\ Id. at 115(d)(3)(M)(i) (``The mechanical licensing
collective shall ensure that all material records of the operations
of the mechanical licensing collective, including those relating to
notices of license, the administration of the claims process of the
mechanical licensing collective, reports of usage, royalty payments,
receipt and maintenance of accrued royalties, royalty distribution
processes, and legal matters, are preserved and maintained in a
secure and reliable manner, with appropriate commercially reasonable
safeguards against unauthorized access, copying, and disclosure, and
subject to the confidentiality requirements prescribed by the
Register of Copyrights under paragraph (12)(C) for a period of not
less than 7 years after the date of creation or receipt, whichever
occurs later.'').
\97\ Id. at 115(d)(3)(J)(i)(II)(bb); see H.R. Rep. No. 115-651,
at 27 (``Unclaimed royalties are to be distributed based upon market
share data that is confidentially provided to the collective by
copyright owners.''); S. Rep. No. 115-339, at 24 (same); Conf. Rep.
at 20 (same).
\98\ 17 U.S.C. 115(d)(6)(B)(ii).
\99\ Id. at 115(d)(11)(C)(iii).
\100\ Id. at 115(d)(3)(L)(i)(II).
\101\ Id. at 115(d)(4)(D)(i)(II).
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The Office seeks public input on any issues that should be
considered relating to the treatment of confidential and other
sensitive information as it relates to the blanket license regime,
including but not limited to the interplay between the Office's
regulations and the use of nondisclosure agreements, confidential
information relating to SNBLs, disclosure of information through the
MLC's unclaimed royalties oversight committee and dispute resolution
committee, and what information can be shared by and among board and
committee members or with the general public.
I. Additional MLC Oversight
As discussed above, the statute and legislative history make plain
that Congress expects the Copyright Office to oversee and regulate the
MLC as necessary and appropriate. For example, the legislative history
contemplates that the Office will exercise its authority to both
``thoroughly review[ ]'' policies and procedures established by the MLC
and promulgate regulations that ``balance[ ] the need to protect the
public's interest with the need to let the new collective operate
without over-regulation.'' \102\ Moreover, the statute requires the MLC
to ``ensure that [its] policies and practices . . . are transparent and
accountable.'' \103\
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\102\ H.R. Rep. No. 115-651, at 5-6, 14; S. Rep. No. 115-339, at
5, 15; Conf. Rep. at 4, 12.
\103\ 17 U.S.C. 115(d)(3)(D)(ix)(I)(aa).
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In the MLC designation proceeding, some concerns raised by
commenters with respect to oversight related to conflicts of interest,
representation, and diversity. The Office observed that the designated
MLC has ``pledged to operate under bylaws that will address conflicts
of interest and appropriate disclosures in accordance with applicable
state laws and professional duties of care.'' \104\ The Office stated
that it ``expects ongoing regulatory and other implementation efforts
to . . . extenuate the risk of self-interest,'' and that ``the Register
intends to exercise her oversight role as it pertains to matters of
governance.'' \105\ Additionally, the Office stated that it ``intends
to work with the MLC to help it achieve the[ ] goals'' of ``engagement
with a broad spectrum of musical work copyright owners, including from
those communities'' and musical genres that some commenters in the
designation proceeding asserted are underrepresented.\106\
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\104\ 84 FR at 32280.
\105\ Id.
\106\ Id. at 32279.
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The Office seeks public input on any issues that should be
considered relating to the oversight of the MLC, including but not
limited to conflicts of interest, representation of the entire musical
works community, ensuring that board and committee member service
complies with all relevant legal requirements, and the appropriate
scope and manner for the Office's review of MLC policies and procedures
(including its bylaws) and any subsequent modifications to such
policies and procedures.
J. Public Notice and Distribution of Unclaimed Accrued Royalties
As discussed above, the Office is specifically required by the MMA
to undertake a separate study and to provide a report by July 2021
recommending best practices for the MLC to identify and locate
copyright owners with unclaimed royalties, encourage copyright owners
to claim their royalties, and reduce the incidence of unclaimed
royalties.\107\ The Office plans to commence that study this winter and
looks forward to having broad industry participation, including by
interested songwriters, regarding this important issue. Unlike most of
the other subjects discussed above, which must be addressed before the
January 1, 2021 license availability date, no unclaimed accrued
royalties may be distributed until January 1, 2023, at the
earliest.\108\
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\107\ Pub. L. 115-264, sec. 102(f), 132 Stat. 3676, 3722-23.
\108\ 84 FR at 32291 (citing 17 U.S.C. 115(d)(3)(H)(i),
(J)(i)(I)).
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Accordingly, while the Office will accept information regarding
whether and how to promulgate regulations regarding the MLC's
obligation to distribute unclaimed accrued royalties (e.g., rules
pertaining to the requirement
[[Page 49974]]
that the MLC engage in good-faith efforts to publicize notice relating
to pending distributions at least ninety days in advance),\109\
commenters should be aware that the Office is tentatively inclined to
wait until after the policy study is underway to finalize rules with
respect to this important duty of the MLC. The Office anticipates that
those seeking to comment on this issue will have ample opportunity to
do so through the study and other future activities.
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\109\ 17 U.S.C. 115(d)(3)(J).
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K. Other Subjects
The Copyright Office invites public comment on any other issues
relevant to the blanket compulsory license regime that commenters
believe are within and appropriate for the Office's regulatory
authority.
Dated: September 16, 2019.
Regan A. Smith,
General Counsel and Associate Register of Copyrights.
[FR Doc. 2019-20318 Filed 9-23-19; 8:45 am]
BILLING CODE 1410-30-P
