The Public Musical Works Database and Transparency of the Mechanical Licensing Collective, 58170-58190 [2020-20078]

Download as PDF 58170 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules Associate Register of Copyrights, by email at regans@copyright.gov or Anna B. Chauvet, Associate General Counsel, by email at achau@copyright.gov. Each can be contacted by telephone by calling (202) 707–8350. SUPPLEMENTARY INFORMATION: LIBRARY OF CONGRESS Copyright Office 37 CFR Part 210 [Docket No. 2020–8] The Public Musical Works Database and Transparency of the Mechanical Licensing Collective U.S. Copyright Office, Library of Congress. ACTION: Notice of proposed rulemaking. AGENCY: The U.S. Copyright Office is issuing a notice of proposed rulemaking 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 law establishes a new blanket license to become available on the January 1, 2021 license availability date that will be administered by a mechanical licensing collective, which will make available a public musical works database as part of its statutory duties. Having solicited public comments through previous notifications of inquiry, through this notice the Office is proposing regulations concerning the new blanket licensing regime, including prescribing categories of information to be included in the public musical works database, as well as rules related to the usability, interoperability, and usage restrictions of the database. The Office is also proposing regulations in connection with its general regulatory authority related to ensuring appropriate transparency of the mechanical licensing collective itself. DATES: Written comments must be received no later than 11:59 Eastern Time on October 19, 2020. 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 website at https:// copyright.gov/rulemaking/mmatransparency. 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 jbell on DSKJLSW7X2PROD with PROPOSALS2 SUMMARY: VerDate Sep<11>2014 18:46 Sep 16, 2020 Jkt 250001 I. Background On October 11, 2018, the president signed into law the Orrin G. Hatch-Bob Goodlatte Music Modernization Act, H.R. 1551 (‘‘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 U.S.C. 115.2 It does so by switching from a song-by-song licensing system to a blanket licensing regime that will become available on January 1, 2021 (the ‘‘license availability date’’), and be administered by a mechanical licensing collective (‘‘MLC’’) designated by the Copyright Office.3 Among other things, the MLC is responsible for ‘‘[c]ollect[ing] and distribut[ing] royalties’’ for covered activities, ‘‘[e]ngag[ing] in efforts to identify musical works (and shares of such works) embodied in particular sound recordings and to identify and locate the copyright owners of such musical works (and shares of such works),’’ and ‘‘[a]dminister[ing] a process by which copyright owners can claim ownership of musical works (and shares of such works).’’ 4 It also must ‘‘maintain the musical works database and other information relevant to the administration of licensing activities under [section 115].’’ 5 A. Regulatory Authority Granted to the Copyright Office The MMA enumerates several regulations that the Copyright Office is specifically directed to promulgate to govern the new blanket licensing regime, and Congress invested the 1 Public Law 115–264, 132 Stat. 3676 (2018). 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 As permitted under the MMA, the Office designated a digital licensee coordinator (‘‘DLC’’) to represent licensees in proceedings before the Copyright Royalty Judges (‘‘CRJs’’) and the Copyright Office, to serve as a non-voting member of the MLC, and to carry out other functions. 17 U.S.C. 115(d)(5)(B); 84 FR 32274 (July 8, 2019); see also 17 U.S.C. 115(d)(3)(D)(i)(IV), (d)(5)(C). 4 17 U.S.C. at 115(d)(3)(C)(i)(V). 5 Id. at 115(d)(3)(C)(i)(IV). 2 See PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 Copyright Office with ‘‘broad regulatory authority’’ 6 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].’’ 7 The MMA specifically directs the Copyright Office to promulgate regulations related to the MLC’s creation of a free database to publicly disclose musical work ownership information and identify the sound recordings in which the musical works are embodied.8 As discussed more below, the statute requires the public database to include various types of information, depending upon whether a musical work has been matched to a copyright owner.9 For both matched and unmatched works, the database must also include ‘‘such other information’’ ‘‘as the Register of Copyrights may prescribe by regulation.’’ 10 The database must ‘‘be made available to members of the public in a searchable, online format, free of charge,’’ 11 as well as ‘‘in a bulk, machine-readable format, through a widely available software application,’’ to certain parties, including blanket licensees 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.’’ 12 In addition, the legislative history contemplates that the Office will ‘‘thoroughly review[ ]’’ 13 policies and procedures established by the MLC and its three committees, of which the MLC is statutorily bound to ensure are ‘‘transparent and accountable,’’ 14 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.’’ 15 6 H.R. Rep. No. 115–651, at 5–6; S. Rep. No. 115– 339, at 5; Conf. Rep. at 4. 7 17 U.S.C. 115(d)(12)(A). 8 See id. at 115(d)(3)(E), (e)(20). 9 Id. at 115(d)(3)(E)(ii), (iii). 10 Id. at 115(d)(3)(E)(ii)(V), (iii)(II). 11 Id. at 115(d)(3)(E)(v). 12 Id. 13 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. 14 17 U.S.C. 115(d)(3)(D)(ix)(I)(aa). 15 H.R. Rep. No. 115–651, at 5–6, 14; S. Rep. No. 115–339, at 5, 15; Conf. Rep. at 4, 12. See also SoundExchange Initial September NOI Comment at 15; Future of Music Coalition (‘‘FMC’’) Reply September NOI Comment at 3 (appreciating ‘‘SoundExchange’s warning against too-detailed regulatory language,’’ but ‘‘urg[ing] the Office to balance this concern for pragmatism and flexibility E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules 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.’’ 16 Legislative history further 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.’’ 17 Accordingly, in designating the MLC, 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.’’ 18 Finally, as detailed in the Office’s prior notification, while the MMA envisions the Office reasonably and prudently exercising regulatory authority to facilitate appropriate transparency of the collective and the public musical works database, the statutory language as well as the collective’s structure separately include aspects to promote disclosure absent additional regulation.19 jbell on DSKJLSW7X2PROD with PROPOSALS2 B. Rulemaking Background Against that backdrop, on September 24, 2019, the Office issued a notification of inquiry (‘‘September NOI’’) seeking public input on a variety of aspects related to implementation of title I of the MMA, including issues that should be considered regarding information to be included in the public musical works database (e.g., which specific additional categories of information might be appropriate to include by regulation), as well as the usability, interoperability, and usage restrictions of the database (e.g., technical or other specific against the need to provide as much clear guidance and oversight as possible to encourage trust’’). 16 H.R. Rep. No. 115–651, at 14; S. Rep. No. 115– 339, at 15; Conf. Rep. at 12. 17 H.R. Rep. No. 115–651, at 14; S. Rep. No. 115– 339, at 15; Conf. Rep. at 12. 18 84 FR at 32280. 19 See 85 FR 22568, 22570–71 (Apr. 22, 2020) (detailing various ways the statute promotes transparency of the mechanical licensing collective, such as by requiring the collective to publish an annual report, make its bylaws publicly available and its policies and practices ‘‘transparent and accountable,’’ identify a point of contact for publisher inquiries and complaints with timely redress, establish an anti-comingling policy for funds collected and those not collected under section 115, and submit itself to a public audit every five years; the statute also permits copyright owners to audit the collective to verify the accuracy of royalty payments, and establishes a five-year designation process for the Office to periodically review the mechanical licensing collective’s performance). VerDate Sep<11>2014 18:46 Sep 16, 2020 Jkt 250001 language that might be helpful to consider in promulgating 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).20 In addition, the September NOI sought public comment on any issues that should be considered relating to the general oversight of the MLC.21 In response, many commenters emphasized the importance of transparency of the public database and the MLC’s operations,22 and urged the Office to exercise ‘‘expansive’’ 23 and 20 84 FR 49966, 49972 (Sept. 24, 2019). at 49973. All rulemaking activity, including public comments, as well as educational material regarding the Music Modernization Act, can currently be accessed via navigation from https:// www.copyright.gov/music-modernization/. Specifically, comments received in response to the September 2019 notification of inquiry are available at https://www.regulations.gov/docketBrowser? rpp=25&po=0&dct=PS&D=COLC-20190002&refD=COLC-2019-0002-0001, and comments received in response to the April 2020 notification of inquiry are available at https:// www.regulations.gov/docketBrowser?rpp=25&so= DESC&sb=commentDueDate&po=0&dct=PS &D=COLC-2020-0006. Guidelines for ex parte communications, along with records of such communications, are available at https:// www.copyright.gov/rulemaking/mmaimplementation/ex-parte-communications.html. The Office encourages, although does not require, parties to refrain from requesting ex parte meetings on this notice of proposed rulemaking until they have submitted written comments. As stated in the guidelines, ex parte meetings with the Office are intended to provide an opportunity for participants to clarify evidence and/or arguments made in prior written submissions, and to respond to questions from the Office on those matters. References to these comments are by party name (abbreviated where appropriate), followed by ‘‘Initial September NOI Comment,’’ ‘‘Reply September NOI Comment,’’ ‘‘April NOI Comment,’’ ‘‘Letter,’’ or ‘‘Ex Parte Letter,’’ as appropriate. 22 See Music Artists Coalition (‘‘MAC’’) Initial September NOI Comment at 2 (indicating ‘‘the need for more transparency’’ regarding the MLC’s structure); Music Innovation Consumers (‘‘MIC’’) Coalition Initial September NOI Comment at 3 (‘‘All stakeholders in the music marketplace benefit when current and accurate information about copyright ownership is easily accessible.’’); Screen Composers Guild of Canada (‘‘SCGC’’) Reply Comment at 2, U.S. Copyright Office Dkt. No. 2018–11, available at https://www.regulations.gov/docketBrowser? rpp=25&po=0&dct=PS&D=COLC-2018-0011 &refD=COLC-2018-0011-0001 (‘‘We urge you to make the choice that gives us transparency in the administration and oversight of our creative works, and a fair chance at proper compensation for those works, now and in the future.’’); Iconic Artists LLC Initial Comment at 2, U.S. Copyright Office Dkt. No. 2018–11, available at https://www.regulations.gov/ docketBrowser?rpp=25&po=0&dct=PS&D=COLC2018-0011&refD=COLC-2018-0011-0001 (‘‘In the current paradigm there is a need for greater transparency and accuracy in reporting.’’); DLC Reply September NOI Comment at 28 (noting that ‘‘transparency will be critical to ensuring that the MLC fulfills its duties in a fair and efficient manner’’). 23 Songwriters Guild of America, Inc. (‘‘SGA’’) Initial September NOI Comment at 6. 21 Id. PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 58171 ‘‘robust’’ 24 oversight. Given these comments, on April 22, 2020, the Office issued a second notification of inquiry seeking further comment on information to be included in the public musical works database, usability, interoperability, and usage restrictions of the database, and transparency and general oversight of the MLC (‘‘April NOI’’).25 Having reviewed and considered all relevant comments received in response to both notifications of inquiry, and having engaged in ex parte communications with commenters, the Office issues a proposed rule regarding the categories of information to be included in the public musical works database, as well as the usability, interoperability, and usage restrictions of the database. The Office is also proposing regulations concerning its general regulatory authority related to ensuring appropriate transparency of the mechanical licensing collective itself. Commenters are reminded that while the Office’s regulatory authority is relatively broad, it is obviously constrained by the law Congress enacted.26 As previously noted, given the start-up nature of the collective, after reviewing the comments received in response to this proposed rule the Office will consider whether fashioning an interim rule, rather than a final rule, may be best-suited to ensure a sufficiently responsive and flexible regulatory structure.27 Where appropriate, the proposed rule is intended to grant the MLC flexibility in various ways instead of adopting certain oversight suggestions that may prove overly burdensome as it prepares for the license availability date. For example, and as discussed below, the proposed rule grants the MLC flexibility in the following ways: • Flexibility to label fields in the public database, as long as the labeling 24 FMC Reply September NOI Comment at 2. See also Recording Academy Initial September NOI Comment at 4; Lowery Reply September NOI Comment at 2. 25 85 FR at 22568. The Office disagreed with the MLC that regulations regarding issues related to transparency ‘‘may be premature’’ because the MLC’s ‘‘policies and procedures are still being developed’’—including because the statute directs the Office to promulgate regulations concerning contents of the public database. Id. at 22570; 17 U.S.C. 115(d)(3)(E)(ii)(V), (iii)(II); MLC Initial September NOI Comment at 30–31. 26 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 4, 12. 27 85 FR at 22571. E:\FR\FM\17SEP2.SGM 17SEP2 jbell on DSKJLSW7X2PROD with PROPOSALS2 58172 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules considers industry practice and reduces the likelihood of user confusion. • Flexibility not to include information regarding terminations, performing rights organization (‘‘PRO’’) affiliation, and DDEX Party Identifier (DPID) in the public database. • Flexibility to allow songwriters, or their representatives, to have songwriter information listed anonymously or pseudonymously. • Flexibility as to the most appropriate method for archiving and maintaining historical data to track ownership and other information changes in the public database. • Flexibility as to the most appropriate method for displaying data provenance information in the public database. • Flexibility on the precise disclaimer language used in the public database to alert users that the database is not an authoritative source for sound recording information. • Flexibility to include information in the public database that is not specifically identified by the statute but the MLC finds useful (but would not have serious privacy or identity theft risks to individuals or entities). • Flexibility to develop reasonable terms of use for the public database, including restrictions on use. • Flexibility to block third parties from bulk access to the public database after attempts to bypass marginal cost recovery or where persons have engaged in other unlawful activity with respect to the database. • Flexibility regarding the initial format in which the MLC provides bulk access to the public database. 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. The Office welcomes parties to file joint comments on issues of common agreement and consensus. While all public comments are welcome, should parties disagree with aspects of the proposed rule, the Office encourages parties to provide specific proposed changes to regulatory language for the Office to consider. II. Proposed Rule A. Categories of Information in the Public Musical Works Database As noted above, the MLC must establish and maintain a free public database of musical work ownership VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 information that also identifies the sound recordings in which the musical works are embodied,28 a function expected to provide transparency across the music industry.29 While the mechanical licensing collective must ‘‘establish and maintain a database containing information relating to musical works,’’ 30 the statute and legislative history emphasize that the database is meant to benefit the music industry overall and is not ‘‘owned’’ by the collective itself.31 Under the statute, if the Copyright Office designates a new entity to be the mechanical licensing collective, the Office must ‘‘adopt regulations to govern the transfer of licenses, funds, records, data, and administrative responsibilities from the existing mechanical licensing collective to the new entity.’’ 32 The legislative history highlights the intent of the public database—providing access to musical works ownership information and promoting transparency across the music industry 33—and distinguishes it from past attempts to control and/or own industry data.34 Accordingly, the MLC ‘‘agrees that the data in the public MLC musical works database is not owned by the MLC or its vendor,’’ and that ‘‘data in this database will be accessible to the public at no cost, and bulk machine-readable copies of the data in the database will be available to 28 17 U.S.C. 115(d)(3)(E), (e)(20). The MLC, Transparency, https:// themlc.com/faqs/categories/transparency (last visited Sept. 1, 2020) (noting that the MLC will ‘‘promote transparency’’ by ‘‘[p]roviding unprecedented access to musical works ownership information through a public database’’). 30 17 U.S.C. 115(d)(3)(E)(i). 31 See Castle April NOI Comment at 1 (‘‘The musical works database does not belong to the MLC or The MLC and if there is any confusion about that, it should be cleared up right away.’’). Any use by the Office referring to the public database as ‘‘the MLC’s database’’ or ‘‘its database’’ was meant to refer to the creation and maintenance of the database, not ownership. 32 17 U.S.C. 115(d)(3)(B)(ii)(II) (emphasis added). 33 See 164 Cong. Rec. S6292, 6293 (daily ed. Sept. 25, 2018) (statement of Sen. Hatch) (‘‘I need to thank Chairman Grassley, who shepherded this bill through the committee and made important contributions to the bill’s oversight and transparency provisions.’’); 164 Cong. Rec. S 501, 504 (daily ed. Jan. 24, 2018) (statement of Sen. Coons) (‘‘This important piece of legislation will bring much-needed transparency and efficiency to the music marketplace.’’); 164 Cong. Rec. H3522, 3541 (daily ed. Apr. 25, 2018) (statement of Rep. Steve Chabot); 164 Cong. Rec. H3522 at 3542 (daily ed. Apr. 25, 2018) (statement of Rep. Norma Torres). 34 Conf. Rep. at 6 (‘‘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.’’); id. (noting that the Global Repertoire Database project, an EUinitiated attempt to create a comprehensive and authoritative database for ownership and administration of musical works, ‘‘ended without success due to cost and data ownership issues’’). 29 See PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 the public, either for free or at marginal cost, pursuant to the MMA.’’ 35 For musical works that have been matched (i.e., the copyright owner of such work (or share thereof) has been identified and located), the statute requires the public database to include: 1. The title of the musical work; 2. The copyright owner of the musical 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,36 sound recording copyright owner, producer, ISRC, and other information commonly used to assist in associating sound recordings with musical works.37 For unmatched musical works, the statute requires the database to 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 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.38 For both matched and unmatched works, the public database must also include ‘‘such other information’’ ‘‘as the Register of Copyrights may prescribe by regulation.’’ 39 The ‘‘Register shall use its judgement to determine what is 35 MLC Ex Parte Letter Aug. 21, 2020 (‘‘MLC Ex Parte Letter #7’’) at 2. The MLC also confirmed that ‘‘the musical work and sound recording data used by the MLC to allocate royalties to copyright owners will be the same musical work and sound recording data that is made available in the public database.’’ Id. at 3–4. See Music Reports April NOI Comment at 2. 36 The Alliance for Recorded Music (‘‘ARM’’) asks that ‘‘the MLC be required to label [the featured artist field] . . . using the phrase ‘primary artist,’ ’’ because ‘‘ ‘primary artist’ is the preferred term as ‘featured artist’ is easily confused with the term ‘featured’ on another artist’s recording, as in Artist X feat. Artist Y.’’ ARM April NOI Comment at 6. Because this is a statutory term and the Office wishes to afford the MLC some flexibility in labeling the public database, it tentatively declines this request. The proposed rule does, however, require the MLC to consider industry practices when labeling fields in the public database to reduce the likelihood of user confusion. 37 17 U.S.C. 115(d)(3)(E)(ii). 38 Id. at 115(d)(3)(E)(iii). 39 Id. at 115(d)(3)(E)(ii)(V), (iii)(II). E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules 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.’’ 40 As noted in the April NOI, in considering whether to prescribe the inclusion of additional fields beyond those statutorily required, the Office has focused on fields that advance the goal of the public database: Reducing the number of unmatched musical works by accurately identifying musical work copyright owners so they can be paid what they are owed by digital music providers (‘‘DMPs’’) operating under the section 115 statutory license.41 At the same time, the Office is mindful of the MLC’s corresponding duties to keep confidential business and personal information secure and inaccessible; for example, data related to computation of market share is contemplated by the statue as sensitive and confidential.42 Recognizing that a robust musical works database may contain many fields of information, the proposed rule may be most valuable in establishing a floor of required information that users can reliably expect to access in the public database, while providing the MLC with flexibility to include additional data fields that it finds helpful.43 Both notifications of inquiry asked which specific additional categories of information, if any, should be required for inclusion in the public database, and stakeholder comments, generally seeking inclusion of additional information, are discussed by category below.44 40 Conf. Rep. at 7. FR at 22573. See Conf. Rep. at 7 (noting that the ‘‘highest responsibility’’ of the MLC includes ‘‘efforts to identify the musical works embodied in particular sound recordings,’’ ‘‘identify[ing] and locat[ing] the copyright owners of such works so that [the MLC] can update the database as appropriate,’’ and ‘‘efficient and accurate collection and distribution of royalties’’). 42 17 U.S.C. 115(d)(3)(J)(i)(II)(bb). See MLC Initial September NOI Comment at 24 (contending that not all information contained in its database ‘‘would be appropriate for public disclosure,’’ and that it ‘‘should be permitted to exercise reasonable judgment in determining what information beyond what is statutorily required should be made available to the public’’). 43 See 85 FR 22549 (Apr. 22, 2020) (proposing a floor of categories of information to be required in periodic reporting to copyright owners, but noting that the MLC expects to include additional information); U.S. Copyright Office, Interim Rule, Royalty Reporting and Distribution Obligations of the Mechanical Licensing Collective, Dkt. No. 2020– 6, published elsewhere in this issue of the Federal Register. 44 84 FR at 49972; 85 FR at 22573. See, e.g., SoundExchange Initial September NOI Comment at 6 (‘‘[T]he data fields recited in the statute should be viewed as a minimal and vaguely described set of data for understanding rights with respect to a jbell on DSKJLSW7X2PROD with PROPOSALS2 41 85 VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 1. Songwriter or Composer Commenters overwhelmingly agreed with the Office’s tentative conclusion that the database should include songwriter and composer information,45 including the MLC.46 The proposed rule requires the MLC to include songwriter and composer information in the public database, to the extent reasonably available to the collective.47 In response to a concern raised about songwriters potentially wanting to mask their identity to avoid being associated with certain musical works, the proposed rule grants the MLC discretion to allow songwriters, or their representatives, the option of having songwriter information listed anonymously or pseudonymously.48 2. Studio Producer As the statute requires the public database to include ‘‘producer,’’ to the extent reasonably available to the MLC,49 so does the proposed rule. musical work in a crowded field where there are many millions of relevant works with similar titles in different languages and complicated ownership structures to understand and communicate.’’). 45 See SGA Initial September NOI Comment at 2 (‘‘While the names of copyright owners and administrators associated with a musical work may change on a constant basis, and other variables and data points are subject to frequent adjustment, the title and the names of the creators never vary from the date of a work’s creation forward.’’); The International Confederation of Societies of Authors and Composers (‘‘CISAC’’) & the International Organisation representing Mechanical Rights Societies (‘‘BIEM’’) April NOI Comment at 2; Songwriters of North America (‘‘SONA’’) April NOI Comment at 2; DLC April NOI Comment at 4 n.19; see also Barker Initial September NOI Comment at 2; FMC Reply September NOI Comment at 2; DLC Reply September NOI Comment at 26. 46 MLC April NOI Comment at 9 (agreeing with inclusion of songwriter information for musical works); MLC Reply September NOI Comment at 32 (same). 47 Because the statute’s definition of ‘‘songwriter’’ includes composers, the proposed rule uses the term ‘‘songwriter’’ to include both songwriters and composers. 17 U.S.C. 115(e)(32). To reduce the likelihood of confusion, the MLC may want to consider labeling this field ‘‘Songwriter or Composer’’ in the public database. Following the statutory language, the proposed rule requires the MLC to include the songwriter field in the public database, and the other fields discussed below, ‘‘to the extent reasonably available to the mechanical licensing collective.’’ See id. at 115(d)(3)(E)(ii)(IV), (iii)(I). See also U.S. Copyright Office, Interim Rule, Royalty Reporting and Distribution Obligations of the Mechanical Licensing Collective, Dkt. No. 2020– 6, published elsewhere in this issue of the Federal Register (requiring the MLC to report certain types of information to copyright owners ‘‘known to the MLC’’). 48 See Kernen NPRM Comment at 1, U.S. Copyright Office Dkt. No. 2020–7, available at https://beta.regulations.gov/document/COLC-20200004-0001. 49 17 U.S.C. 115(d)(3)(E)(ii)(IV), (iii)(I)(dd). See MLC April NOI Comment at 9 (stating that it ‘‘is willing to include producer information in the public database to the extent the Office requires it be reported from DMPs’’). The Office notes that the PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 58173 Initially, there appeared to be stakeholder disagreement about the meaning of the term ‘‘producer,’’ which has since been resolved to clarify that ‘‘producer’’ refers to the studio producer.50 Because the term ‘‘producer’’ relates not only to the public database, but also to information provided by digital music providers in reports of usage, the Office included an overarching definition of ‘‘producer’’ in its interim rule concerning reports of usage, notices of license, and data collection efforts, among other things, that applies throughout its section 115 regulations to define ‘‘producer’’ as the studio producer.51 3. Unique Identifiers As noted above, the statute requires the MLC to include ISRC and ISWC codes, when reasonably available.52 According to the legislative history, ‘‘[u]sing standardized metadata such as ISRC and ISWC codes, is a major step forward in reducing the number of unmatched works.’’ 53 In response to the September NOI, the DLC proposed including the Interested Parties Information (IPI) 54 or statute requires digital music providers to report ‘‘producer’’ to the mechanical licensing collective. 17 U.S.C. 115(d)(3)(E)(ii)(IV), (iii)(I)(dd). See also U.S. Copyright Office, Interim Rule, Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020–5, published elsewhere in this issue of the Federal Register. 50 See MLC Initial September NOI Comment at 13 n.6 (originally believing that ‘‘producer’’ referred to ‘‘the record label or individual or entity that commissioned the sound recording’’); Recording Academy Initial September NOI Comment at 3 (urging Office to ‘‘clarify that a producer is someone who was part of the creative process that created a sound recording’’); Recording Industry Association of America, Inc. (‘‘RIAA’’) Initial September NOI Comment at 11 (stating ‘‘producer’’ should be defined as ‘‘the primary person(s) contracted by and accountable to the content owner for the task of delivering the recording as a finished product’’); MLC Reply September NOI Comment at 35 (updating its understanding). 51 See U.S. Copyright Office, Interim Rule, Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020–5, published elsewhere in this issue of the Federal Register. 52 17 U.S.C. 115(d)(3)(E)(ii)–(iii). 53 Conf. Rep. at 7. The legislative history also notes that ‘‘the Register may at some point wish to consider after an appropriate rulemaking whether standardized identifiers for individuals would be appropriate, or even audio fingerprints.’’ Id. 54 IPI is ‘‘[a] unique identifier assigned to rights holders with an interest in an artistic work, including natural persons or legal entities, made known to the IPI Centre. The IPI System is an international registry used by CISAC and BIEM societies.’’ U.S. Copyright Office, Unclaimed Royalties Study Acronym Glossary, https:// www.copyright.gov/policy/unclaimed-royalties/ glossary.pdf. E:\FR\FM\17SEP2.SGM 17SEP2 58174 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules International Standard Name Identifier (‘‘ISNI’’),55 to the extent reasonably available to the MLC.56 SoundExchange asserted that the ‘‘CWR standard contemplates a much richer set of information about ‘interested parties’ linked to CISAC’s Interested Party Information (‘IPI’) system, including information about songwriters and publishers at various levels,’’ and so the database ‘‘should include and make available a full set of information about interested parties involved in the creation and administration of the musical work, including shares and identifiers.’’ 57 For its part, the MLC stated that it plans to include IPI and ISNI in the public database (but should not be required to do so through regulation),58 and create its own proprietary identifier for each musical work in the database.59 In the subsequent April NOI, the Office sought public input on issues relating to the inclusion of unique identifiers for musical works in the public database, including whether regulations should require including IPI or ISNI, the MLC’s own standard identifier, or any other specific additional standard identifiers reasonably available to the MLC.60 In response, multiple commenters agree that the public database should include IPI and/or ISNI.61 SONA also ‘‘strongly encourage[d]’’ the inclusion of Universal Product Code (‘‘UPC’’) because ‘‘these codes are sometimes the only reliable way to identify the particular product for which royalties are being paid and thus ensure that royalties are correctly allocated.’’ 62 The MLC reiterated its plan to include IPI and ISNI, as well as ‘‘other unique identifiers’’ and ‘‘any other third party jbell on DSKJLSW7X2PROD with PROPOSALS2 55 ISNI is ‘‘[a] unique identifier for identifying the public identities of contributors to creative works, regardless their legal or natural status, and those active in their distribution. These may include researchers, inventors, writers, artists, visual creators, performers, producers, publishers, aggregators, and more. A different ISNI is assigned for each name used.’’ U.S. Copyright Office, Unclaimed Royalties Study Acronym Glossary, https://www.copyright.gov/policy/unclaimedroyalties/glossary.pdf. 56 DLC Initial September NOI Comment at 21; DLC Reply September NOI Comment Add. at A–16. 57 SoundExchange Initial September NOI Comment at 8; see id. at 7–8 (‘‘Reflecting all applicable unique identifiers in the MLC Database will allow users of the MLC Database readily to match records in the database to other databases when ISWC is not included in one or the other of the databases.’’). 58 MLC Reply September NOI Comment at 33. 59 Id. at 34. 60 85 FR at 22574. 61 DLC April NOI Comment at 4 n.19; SONA April NOI Comment at 4; CISAC & BIEM April NOI Comment at 2. 62 SONA April NOI Comment at 5. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 proprietary identifiers . . . to the extent the MLC believes they will be helpful to copyright owners.’’ 63 As part of that effort, the MLC ‘‘intend[s] to make available unique identifiers reported by the DMPs in the public database.’’ 64 The MLC does not, however, intend to include the UPC field ‘‘in the initial versions of the portal or public database (which focus on providing the data needed for matching and claiming).’’ 65 The Office finds the comments regarding IPI and ISNI persuasive in light of the statute, and thus proposes to require the public database to include IPI and/or ISNI for each songwriter, publisher, and musical work copyright owner, as well as UPC,66 to the extent reasonably available to the MLC. The Office seeks public comment on whether IPIs and/or ISNIs for foreign collective management organizations (‘‘CMOs’’) should be required to be listed separately. Under the proposed rule, the public database must also include the MLC’s standard identifier for the musical work, and to the extent reasonably available to the MLC, unique identifier(s) assigned by the blanket licensee, if reported by the blanket licensee.67 4. Information Related to Ownership and Control of Musical Works By statute, the database must include information regarding the ownership of the musical work as well as the underlying sound recording, including ‘‘the copyright owner of the work (or share thereof), and the ownership percentage of that owner,’’ or, if unmatched, ‘‘the ownership percentage for which an owner has not been identified.’’ 68 The statute also requires 63 MLC 64 MLC April NOI Comment at 9. Ex Parte Letter #7 at 5. 65 Id. 66 The Office notes that the MLC supports including the UPC field in royalty reports to copyright owners, and in reports of usage provided by DMPs to the MLC. See MLC Initial September NOI Comment at App. G; MLC NPRM Comment at App. C, U.S. Copyright Office Dkt. No. 2020–5, available at https://beta.regulations.gov/document/ COLC-2020-0005-0001. In addition, the MLC has maintained it will use UPC in its matching efforts. See MLC Letter July 13, 2020 at 7 (stating ‘‘[a]ll of the metadata fields proposed in § 210.27(e)(1) will be used as part of the MLC’s matching efforts’’); see also 85 FR 22518, 22541 (Apr. 22, 2020) (UPC proposed in § 210.27(e)(1)). 67 See U.S. Copyright Office, Interim Rule, Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020–5, published elsewhere in this issue of the Federal Register; U.S. Copyright Office, Interim Rule, Royalty Reporting and Distribution Obligations of the Mechanical Licensing Collective, Dkt. No. 2020–6, published elsewhere in this issue of the Federal Register. 68 17 U.S.C. 115(d)(3)(C)(E)(ii)–(iii). CISAC & BIEM contend that creators’ percentage share PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 a field called ‘‘sound recording copyright owner,’’ the meaning of which is discussed further below. Although the MMA does not specifically call out music publishing administrators, that is, entities responsible for managing copyrights on behalf of songwriters, including administering, licensing, and collecting publishing royalties without receiving an ownership interest in such copyrights, a number of commenters urge inclusion of this information in the public musical works database.69 As one publisher suggests, because ‘‘[t]he copyright owner may not necessarily be the entity authorized to control, license, or collect royalties for the musical work,’’ the public database should include information identifying the administrators or authorized entities who license or collect on the behalf of musical work copyright owners.70 He also proposed that because ‘‘a copyright owner’s ‘ownership’ percentage may differ from that same owner’s ‘control’ percentage,’’ the public database should include separate fields for ‘‘control’’ versus ‘‘ownership’’ percentage.71 The MLC agrees with that approach,72 stating that ‘‘the database should include information identifying the administrators or authorized entities who license the relevant musical work and/or collect royalties for such work on behalf of the copyright owner.’’ 73 In addition, with respect to specific ownership percentages, which are required by statute to be made publicly should not be made publicly accessible in the database. CISAC & BIEM NPRM Comment at 2, U.S. Copyright Office Dkt. No. 2020–7, available at https://beta.regulations.gov/document/COLC-20200004-0001. The statute, however, specifically contemplates such information being made publicly available in the database. 17 U.S.C. 115(d)(3)(C)(E)(ii)–(iii). 69 DLC Reply September NOI Comment Add. at A–16 (urging inclusion of ‘‘all additional entities involved with the licensing or ownership of the musical work, including publishing administrators and aggregators, publishers and sub-publishers, and any entities designated to receive license notices, reporting, and/or royalty payment on the copyright owners’ behalf’’); ARM April NOI Comment at 2 (agreeing that ‘‘information related to all persons or entities that own or control the right to license and/ or collect royalties related to musical works in the United States should be included’’). See also FMC April NOI Comment at 2; SONA April NOI Comment at 5–6; SoundExchange Initial September NOI Comment at 8 (observing that ‘‘[c]ommercialization of musical works often involves chains of publishing, sub-publishing and administration agreements that determine who is entitled to be paid for use of a work,’’ and that the CWR standard contemplates gathering this information, such that the MLC database should also collect and make available this information). 70 Barker Initial September NOI Comment at 2. 71 Id. at 3. 72 MLC Reply September NOI Comment at 32 n.16. 73 MLC April NOI Comment at 9. E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS2 available, SoundExchange raises the question of how the database should best address ‘‘the frequent situation (particularly with new works) where the various co-authors and their publishers have, at a particular moment in time, collectively claimed more or less than 100% of a work.’’ 74 Noting that it may be difficult for the MLC to withhold information regarding the musical work until shares equal 100% (the practice of other systems), it suggests the MLC ‘‘make available information concerning the shares claimed even when they total more than 100% (frequently referred to as an ‘overclaim’) or less than 100% (frequently referred to as an ‘underclaim’).’’ 75 In response, the MLC stated that it ‘‘intends to mark overclaims as such and show the percentages and total of all shares claimed so that overclaims and underclaims will be transparent.’’ 76 Relatedly, CISAC & BIEM raise concerns about needing ‘‘to clarify the concept of ‘copyright owner,’ ’’ as ‘‘foreign collective management organizations (CMOs) . . . are also considered copyright owners or exclusively mandated organizations of the musical works administered by these entities,’’ and thus ‘‘CMOs represented by CISAC and BIEM should be able to register in the MLC database the claim percentages they represent.’’ 77 While the MMA does not reference foreign musical works specifically, nothing in the statute indicates that foreign copyright owners should be treated differently from U.S. copyright owners under the blanket licensing regime, or prevents the MLC from seeking or including data from foreign CMOs in building the public database.78 Where copyright ownership has been assigned or otherwise transferred to a foreign CMO or, conversely, a U.S. subpublisher, the statute does not specify that it should be treated differently from a similarly-situated U.S. entity that has been assigned or otherwise been transferred copyright ownership.79 The MLC has maintained that it will ‘‘engage in non-discriminatory treatment towards domestic and foreign copyright 74 SoundExchange Initial September NOI Comment at 8. 75 Id. at 9; see also id. at 15. 76 MLC Ex Parte Letter #7 at 5. 77 CISAC & BIEM April NOI Comment at 1. See also Japanese Society for Rights of Authors, Composers and Publishers (‘‘JASRAC’’) Initial September NOI Comment at 2 (‘‘[A]n effective and efficient claims process needs to be established for works that are not initially matched, which will allow foreign rights owners to claim works without significant burden.’’). 78 See 17 U.S.C. 115. 79 See id. at 101 (defining ‘‘copyright owner’’ and ‘‘transfer of copyright ownership’’); id. at 115. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 owners, CMOs and administrators,’’ 80 and that it ‘‘intends to operate on a nondiscriminatory basis, and all natural and legal persons or entities of any nationality are welcome to register their claims to works with the MLC.’’ 81 In addition, the MLC appears to be planning for data collection from foreign CMOs, as evidenced by the creation of its Data Quality Initiative (DQI), which ‘‘provide[s] a streamlined way for music publishers, administrators and foreign collective management organizations (CMOs) to compare large schedules of their musical works’ data against The MLC’s data . . . so that they can . . . improve the quality of The MLC’s data.’’ 82 According to the MLC, the DQI ‘‘does not act as a mechanism for delivering work registrations/works data,’’ but ‘‘[m]usic publishers, administrators and foreign CMOs may use [Common Works Registration] to deliver new and updated work registrations to The MLC.’’ 83 After considering the comments, the Office concludes that to the extent reasonably available to the MLC, it will be beneficial for the database to include information related to all persons or entities that own or control the right to license and collect royalties related to musical works in the United States, and that music publishing administrator and control information would be valuable additions. Accordingly, the proposed rule requires the public database to include administrator(s) or other authorized entity(ies) who license the musical work (or share thereof) and/or collect mechanical royalties for such musical work (or share thereof) in the United States. The proposed rule would not prevent the MLC from including additional information with respect to foreign CMOs. The Office solicits comments on the proposed language, including any specific suggestions for adjustment. With respect to the question SoundExchange raises regarding works that may reflect underclaiming and overclaiming of shares, the Office concludes that it may make sense for the MLC to retain flexibility to implement such a system as it apparently intends, and notes that the MLC’s dispute resolution committee may be an appropriate forum to consider this issue further, as part of the committee’s charge to establish policies and 80 MLC Ex Parte Letter #7 at 6. Reply September NOI Comment at 44. 82 The MLC, Play Your Part, https://themlc.com/ play-your-part (last visited Sept. 1, 2020). 83 The MLC, MLC Data Quality Initiative, https:// themlc.com/sites/default/files/2020-08/2020%20%20DQI%20One%20Pager%20Updated%208-1820.pdf (last visited Sept. 1, 2020). 81 MLC PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 58175 procedures related to resolution of disputes related to ownership interests in musical works.84 As noted above, the MLC ‘‘intends to mark overclaims as such and show the percentages and total of all shares claimed so that overclaims and underclaims will be transparent.’’ 85 5. Additional Information Related To Identifying Musical Works and Sound Recordings Commenters proposed that the public database include various other fields to identify the musical work at issue or the sound recording in which it is embodied. With respect to musical works, some commenters pointed to fields included in the existing Common Works Registration (‘‘CWR’’) format, and supported inclusion of information relating to alternate titles for musical works,86 whether the work utilizes samples and medleys of preexisting works,87 and opus and catalog numbers and instrumentation of classical compositions.88 With respect to sound recordings, commenters suggested inclusion of information relating to track duration, version, and release date of sound recording.89 The MLC acknowledged the merits of including these fields proposed by commenters, recognizing ‘‘CWR as the de facto industry standard used for registration of claims in musical works, and intends to use CWR as its primary mechanism for the bulk electronic 84 17 U.S.C. 115(d)(3)(K). Ex Parte Letter #7 at 5. 86 See RIAA Initial September NOI Comment at 8; MLC Reply September NOI Comment at 32; ARM April NOI Comment at 3; Recording Academy April NOI Comment at 3; see also SONA April NOI Comment at 5–6 (contending that data supplied to the MLC via the CWR format for musical works should be in the public database). 87 SoundExchange Initial September NOI Comment at 9; ARM April NOI Comment at 3. 88 SoundExchange Initial September NOI Comment at 7; ARM April NOI Comment at 3. 89 See MLC Reply September NOI Comment at 33, App. E (agreeing with inclusion of duration, version, and release year of the sound recording, to the extent available to the MLC); Recording Academy Initial September NOI Comment at 3 (noting such information would ‘‘help distinguish between songs that have been recorded and released under different titles or by different artists multiple times’’); RIAA Initial September NOI Comment at 6–7 (same); Recording Academy April NOI Comment at 3 (stating database should include version titles, track duration, and release date); SONA April NOI Comment at 6 (contending track duration, version, and release date should be included in the database). ARM agrees that track duration, version, and release year should be in the database, but only if such data is obtained from an authoritative source. ARM April NOI Comment at 3. RIAA recommends revising the ‘‘sound recording name’’ field to ‘‘sound recording track title,’’ or in the alternative, ‘‘sound recording name/sound recording track title.’’ RIAA Initial September NOI Comment at 10–11. 85 MLC E:\FR\FM\17SEP2.SGM 17SEP2 58176 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules registration of musical works data.’’ 90 The MLC reported plans to include alternative titles of the musical work, and for sound recordings, the track duration, version, and release date,91 as well as additional fields ‘‘reported to the mechanical licensing collective as may be useful for the identification of musical works that the mechanical licensing collective deems appropriate to publicly disclose.’’ 92 Regarding opus and catalog numbers for classical compositions, the MLC maintains that it ‘‘is working with DDEX to determine if it is possible or appropriate to add Opus Number and (Composer) Catalogue Number to the data specifications.’’ 93 Regarding whether the work utilizes samples and medleys of preexisting works, the MLC contends that ‘‘[b]ecause medleys and musical works that sample other musical works are unique derivative copyrighted works, each will be included in the database as a unique composition,’’ and that such an approach addresses SoundExchange’s concern because it will ‘‘treat[ ] each medley or work that incorporates a sample as a separate musical work, as to which ownership will be separately claimed and identified.’’ 94 Given the consensus of comments, the proposed rule requires the MLC to include the following fields in the public database, to the extent reasonably available to the MLC: Alternate titles for musical works, opus and catalog numbers of classical compositions, and track duration,95 version, and release date of sound recordings. The Office has issued an interim rule requiring digital music providers to report the actual playing time as measured from the sound recording file to the MLC,96 which the Office expects to be the value displayed in the public musical works database. Finally, the proposed rule mirrors the statute by requiring the public database to include, to the extent reasonably available to the mechanical licensing collective, other nonconfidential information commonly used to assist in associating sound recordings with musical works (for matched musical works), and for 90 MLC Reply September NOI Comment at 38. at App. E; MLC April NOI Comment at 10. 92 MLC Reply September NOI Comment at App. 91 Id. jbell on DSKJLSW7X2PROD with PROPOSALS2 E. 93 MLC Ex Parte Letter #7 at 5. 94 Id. 95 The proposed rule uses the term ‘‘playing time.’’ See U.S. Copyright Office, Interim Rule, Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020–5, published elsewhere in this issue of the Federal Register. 96 Id. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 unmatched musical works, other nonconfidential information commonly used to assist in associating sound recordings with musical works, and any additional non-confidential information reported to the mechanical licensing collective that may assist in identifying musical works.97 6. Performing Rights Organization Affiliation In response to the September NOI, a few commenters maintained that the public database should include performing rights organization (‘‘PRO’’) affiliation, with MIC Coalition asserting that ‘‘[a]ny data solution must not only encompass mechanical rights, but also provide information regarding public performance rights, including PRO affiliation and splits of performance rights.’’ 98 By contrast, the MLC and FMC raised concerns about including and maintaining PRO affiliation in the public database.99 The largest PROs, The American Society of Composers, Authors, and Publishers (‘‘ASCAP’’) and Broadcast Music, Inc. (‘‘BMI’’), similarly objected that because ‘‘music performing rights organizations such as BMI and ASCAP all have comprehensive databases on musical works ownership rights, and these databases are publicly available,’’ so ‘‘administration of data with respect to the licensing of public performing rights does not require government intervention.’’ 100 After evaluating these comments, in the April NOI the Office tentatively concluded against requiring PRO affiliation in the public database, noting that ‘‘[b]ecause the MMA explicitly restricts the MLC from licensing 97 17 U.S.C. 115(d)(3)(E)(ii)(IV)(bb), (iii)(I)(dd)– (ee). 98 MIC Coalition Initial September NOI Comment at 2. See DLC Initial September NOI Comment at 20 (suggesting that including PRO affiliation ‘‘will ensure that the [public] database is fully usable, including as a resource for direct licensing activities’’); see also Barker Initial September NOI Comment at 8–9. 99 See MLC Reply September NOI Comment at 36 (pointing out that its ‘‘primary responsibility is to engage in the administration of mechanical rights and to develop and maintain a mechanical rights database,’’ and that ‘‘gather[ing], maintain[ing], updat[ing] and includ[ing] . . . performance rights information—which rights it is not permitted to license—would require significant effort which could imperil [its] ability to meet its statutory obligations with respect to mechanical rights licensing and administration by the [license availability date]’’); FMC Reply September NOI Comment at 3 (‘‘[I]t’s difficult to see how including PRO information in the MLC database could work— as the MLC won’t be paying PROs, it’s hard to envision what would incentivize keeping this data accurate and authoritatively up to date.’’). 100 ASCAP & BMI Reply September NOI Comment at 2. PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 performance rights, it seems unlikely to be prudent or frugal to require the MLC to expend resources to maintain PRO affiliations for rights it is not permitted to license.’’ 101 In response, the DLC asked the Office to reconsider and include PRO affiliation in the public database.102 The MIC Coalition commented that ‘‘[i]ncorporating PRO information into the musical works database . . . will foster a wide range of innovations in music licensing,’’ 103 and that the Office should not view ‘‘the joint database proposed by ASCAP and BMI as a viable alternative to the one that’s currently being developed by the MLC.’’ 104 But CISAC &, BEIM agree ‘‘that there is no need for the MLC to include and maintain the PRO’s performing right information in the database,’’ 105 and FMC finds the ‘‘Office’s tentative conclusion against requiring the MLC to include PRO affiliation in its database is sound.’’ 106 For its part, the MLC contends that it ‘‘should be afforded the opportunity to focus on its main priority of a robust and fulsome mechanical rights database,’’ and not include PRO affiliation, but that ‘‘[i]f, at some time in the future, the MLC has the capacity and resources to also incorporate performance rights information, it may undertake this task . . .’’ 107 Having considered these comments, the statutory text, and legislative history, the Office concludes that the mechanical licensing collective should not be required to include PRO affiliation in the public database.108 As previously noted by the Office, this conclusion does not inhibit PRO access or use of the database for their own efforts, and explicitly permits bulk access for a fee that does not exceed the MLC’s marginal cost to provide such access; nor does it restrict the MLC from 101 85 FR at 22576; 17 U.S.C. 115(d)(3)(C)(iii) (limiting administration of voluntary licenses to ‘‘only [the] reproduction or distribution rights in musical works for covered activities’’). 102 DLC April NOI Comment at 3–4. 103 MIC Coalition April NOI Comment at 3. 104 Id. at 2. 105 CISAC & BIEM April NOI Comment at 3. 106 FMC April NOI Comment at 2. 107 MLC April NOI Comment at 10. 108 In a related rulemaking, the Office has declined to require musical work copyright owners to provide information related to performing rights organization affiliation in connection with the statutory obligation to undertake commercially reasonably efforts to deliver sound recording information to the MLC. U.S. Copyright Office, Interim Rule, Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020–5, published elsewhere in this issue of the Federal Register. See also 17 U.S.C. 115(d)(3)(E)(iv). E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules optionally including such information.109 jbell on DSKJLSW7X2PROD with PROPOSALS2 7. Historical Data In response to the September NOI, SoundExchange asserted that the public database should ‘‘maintain and make available historical interested party information so it is possible to know who is entitled to collect payments for shares of a work both currently and at any point in the past.’’ 110 The DLC also proposed that the public database include ‘‘information regarding each entity in the chain of copyright owners and their agents for a particular musical work’’ as well as ‘‘relational connections between each of these entities for a particular musical work.’’ 111 The MLC sought clarity about the DLC’s specific proposal, suggesting ‘‘[i]t is unclear whether the DLC . . . is referring to the entire historical chain of title for each musical work. If so, the MLC objects that ‘‘such information is voluminous, burdensome to provide and maintain, and in this context unnecessary and must not be required.’’ 112 The MLC stated, however, that it intends to maintain information in its database about ‘‘each and every entity that, at any given point in time, owns a share of the right to receive mechanical royalties for the use of a musical work in covered activities.’’ 113 After considering these comments, the Copyright Office tentatively agreed with the MLC’s approach to focus on current relationships, but welcomed further public input and noted that it did not envision language prohibiting the MLC from providing such historical information.114 In response to the April NOI, SoundExchange reiterated its request for the public database to include historical information, acknowledging that it ‘‘seems reasonable’’ for the MLC not to ‘‘go out of its way to collect information about entitlement to payment for times before the license availability date,’’ but discouraging an approach where ‘‘the MLC may discard or not make publicly available information about entitlement to payment that . . . applies to times after the license availability date, . . . 109 17 U.S.C. 115(d)(3)(E)(v); 85 FR at 22576. See Barker Initial September NOI Comment at 9; SONA April NOI Comment at 6 (‘‘While SONA does not believe this data should be mandatory, we also do not think that the rule should prohibit a songwriter from publicly listing PRO affiliation if he or she believes that it could be important identifying information.’’). 110 SoundExchange Initial September NOI Comment at 10. 111 DLC Initial September NOI Comment at 20. 112 MLC Reply September NOI Comment at 34. 113 Id. 114 85 FR at 22576. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 [because] in some cases (such as where a service provider makes a significantly late payment or distribution is delayed because the copyright owners have not agreed among themselves concerning ownership shares) the MLC may not be able to distribute royalties until long after the usage occurred.’’ 115 CISAC & BIEM, FMC, and SONA agree that historical ownership information should be in the public database, noting that ownership of musical works changes over time.116 For its part, the MLC reaffirmed its intention to ‘‘maintain information about each and every entity that, at any given point in time, owns a share of the right to receive mechanical royalties for the use of a musical work in covered activities,’’ and to ‘‘maintain at regular intervals historical records of the information contained in the database.’’ 117 The MLC also clarified that it ‘‘will maintain an archive of data provided to it after the license availability date (‘LAD’) and that has subsequently been updated or revised (e.g., where there is a post-LAD change in ownership of a share of a musical work), and the MLC will make this historic information available to the public.’’ 118 The MLC contends that ‘‘it should be permitted to determine, in consultation with its vendors, the best method for maintaining and archiving historical data to track ownership and other information changes in its database.’’ 119 Having carefully considered this issue, the Office proposes that the MLC shall maintain at regular intervals historical records of the information contained in the public musical works database, including a record of changes to such database information and changes to the source of information in database fields, in order to allow tracking of changes to the ownership of musical works in the database over time. The proposed rule adopts the MLC’s request for flexibility as to the most appropriate method for archiving and maintaining such historical data to track ownership and other information changes in the database. As previously noted by the Office, the MLC must maintain all material records of the operations of the mechanical licensing 115 SoundExchange April NOI Comment at 4 (emphasis added). See id. at 4–5 (‘‘To pay the proper payee for the time when usage occurred, the MLC will need to know who is entitled to receive royalty payments for all times after the license availability date.’’). 116 CISAC & BIEM April NOI Comment at 3; FMC April NOI Comment at 2; SONA April NOI Comment at 9. 117 MLC April NOI Comment at 12. 118 MLC Ex Parte Letter #7 at 4. 119 MLC April NOI Comment at 12. PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 58177 collective in a secure and reliable manner, and such information will also be subject to audit.120 8. Terminations Title 17 allows, under certain circumstances, authors or their heirs to terminate an agreement that previously granted one or more of the author’s exclusive rights to a third party.121 In response to the September NOI, one commenter suggested that to the extent terminations of musical work grants have occurred, the public database should include ‘‘separate iterations of musical works with their respective copyright owners and other related information, as well as the appropriately matched recording uses for each iteration of the musical work, and to make clear to the public and users of the database the appropriate version eligible for future licenses.’’ 122 Separately, as addressed in a parallel rulemaking, the MLC asked that the Office require digital music providers to include server fixation dates for sound recordings, contending that this information will be helpful to its determination whether particular usage of musical works is affected by the termination of grants under this statutory provision.123 The DLC objected to this request.124 In the April NOI, the Office sought public input on issues that should be considered relating to whether termination information should be included in the public database.125 The DLC, SGA, and SONA support including information concerning the termination of grants of rights by copyright creators in the public database.126 By contrast, the MLC contends that it ‘‘should not be required to include in the public database information regarding statutory termination of musical works per se.’’ 127 The Recording Academy, expressing concern that the Office’s parallel rulemaking involving server fixation dates for sound recordings ‘‘could have a substantive impact on the termination rights of songwriters,’’ 128 120 85 FR at 22576; 17 U.S.C. 115(d)(3)(M)(i); id. at 115(d)(3)(D)(ix)(II)(aa). 121 17 U.S.C. 203, 304(c), 304(d). 122 Barker Initial September NOI Comment at 4. 123 MLC Reply September NOI Comment at 19, App. at 10; see also 85 FR at 22532–33. 124 DLC Ex Parte Letter Feb. 14, 2020 (‘‘DLC Ex Parte Letter #1’’) at 3; DLC Ex Parte Letter #1 Presentation at 15; DLC Ex Parte Letter Feb. 24, 2020 at 4; DLC Ex Parte Letter Mar. 4, 2020 at 5. 125 85 FR at 22576. 126 DLC April NOI Comment at 4 n.19; SGA April NOI Comment at 8; SONA April NOI Comment at 2. 127 MLC April NOI Comment at 10. 128 Recording Academy April NOI Comment at 3. E:\FR\FM\17SEP2.SGM 17SEP2 58178 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules asks the Office to ‘‘set aside any issue related to termination rights and the MLC until it conducts a full and thorough examination of the implications . . . for songwriters and other authors, including an opportunity for public comment.’’ 129 Having considered these comments, the statutory text, and legislative history, the Office takes the position that the mechanical licensing collective should not be required to include termination information in the public database. This conclusion does not restrict the MLC from optionally including such information. In addition, the Office notes that the MLC has agreed to include information regarding administrators that license musical works and/or collect royalties for such works,130 as well as information regarding ‘‘each and every entity that, at any given point in time, owns a share of the right to receive mechanical royalties for the use of a musical work in covered activities,’’ 131 which presumably should include updated ownership information that may be relevant for works that are being exploited post-exercise of the termination right. 9. Data Provenance In response to the September NOI, the DLC maintained that if the public database includes third-party data, ‘‘it should be labeled as such.’’ 132 The DLC provided proposed language suggesting that for musical work copyright owner information, the database should indicate ‘‘whether the ownership information was received directly from the copyright owner or from a third party.’’ 133 SoundExchange agreed, stating that the public database ‘‘should identify the submitters of the information in it, because preserving that provenance will allow the MLC and users of the MLC to make judgments about how authoritative the information is.’’ 134 Others commenters noted that for sound recordings, first-hand data is more likely to be accurate.135 129 Id. 130 MLC April NOI Comment at 9. Reply September NOI Comment at 34. 132 DLC Initial September NOI Comment at 20. 133 DLC Reply September NOI Comment at Add. A–15–16. 134 SoundExchange Initial September NOI Comment at 10–11. 135 The American Association of Independent Music (‘‘A2IM’’) & RIAA Reply September NOI Comment at 2 (asserting MLC should be required to obtain its sound recording data from a single authoritative source); Jessop Initial September NOI Comment at 3 (‘‘The MLC should obtain sound recording information from as close to the source as possible. In practice this means from the record label or someone directly or indirectly authorized to manage this information for them.’’). jbell on DSKJLSW7X2PROD with PROPOSALS2 131 MLC VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 In the April NOI, the Office noted that while issues related to data sourcing, confidence in data quality, accurate copyright ownership information, and agency or licensing arrangements, are important, they can be nuanced, and so ‘‘the MLC may be better-suited to explore the best way to promote accuracy and transparency in issues related to data provenance without such regulatory language, including through the policies and practices adopted by its dispute resolution and operations committees, and by establishing digital accounts through which copyright owners can view, verify, or adjust information.’’ 136 The Office sought further public input on any issues that should be considered relating to the identification of data sourcing in the public database, including whether (and how) third-party data should be labeled.137 In response, the DLC asked the Office to reconsider and include data provenance information in database, stating that ‘‘users of the database should have the ability to consider whatever information the MLC can obtain from copyright owners, and make their own judgments as to its reliability based on the MLC’s identification of the information’s source.’’ 138 ARM, FMC, and CISAC & BIEM agree that the public database should include data provenance information,139 although CISAC & BIEM and SONA contend that regulations requiring such information are not necessary.140 For its part, the MLC ‘‘agrees with the Office’s tentative conclusion that the MLC and its committees are better suited to establish policies and practices . . . to meet the goal of improving data quality and accuracy,’’ 141 and that ‘‘[t]he MLC should be given sufficient flexibility to determine the best and most 136 85 FR at 22576. 137 Id. 138 DLC April NOI Comment at 4. April NOI Comment at 3 (contending that the public database should indicate ‘‘which data was provided to the MLC by the actual copyright owner or its designee, which was provided by a DMP and which was provided some other third party’’); FMC April NOI Comment at 2 (agreeing that public database ‘‘should include provenance information, not just because it helps allow for judgments about how authoritative that data is, but because it can help writers and publishers know where to go to correct any bad data they discover’’); CISAC & BIEM April NOI Comment at 3 (‘‘Submitters of information should be identified, and when the information is derived from copyright owners (creators, publishers, CMOs, etc.), it should be labelled, and it should prevail over other sources of information.’’). 140 CISAC & BIEM April NOI Comment at 3 (maintaining that ‘‘any issues should be resolved through the MLC’s dispute resolution policy’’); SONA April NOI Comment at 8. 141 MLC April NOI Comment at 11. 139 ARM PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 operationally effective way to ensure the accuracy and quality of the data in its database, rather than requiring it to identify the source of each piece of information contained therein.’’ 142 The MLC also stated that it ‘‘intends to show the provenance of each row of sound recording data, including both the name of and DPID for the DMP from which the MLC received the sound recording data concerned,’’ and that it ‘‘intends to put checks in place to ensure data quality and accuracy.’’ 143 For musical works information, the MLC maintains that it ‘‘will be sourced from copyright owners.’’ 144 After carefully reviewing these comments, the Office agrees that the MLC should be granted some discretion on how to display data provenance information in the public database. Because the commenters generally supported the MLC’s intent to source musical works information from copyright owners, data provenance issues appear to be especially relevant to sound recording information in the public database. This is particularly true given that the MLC intends to populate sound recording information in the public database from reports of usage, as opposed to using a single authoritative source (discussed below). Accordingly, the proposed rule states that the MLC must display data provenance information for sound recording information in the public database. The Office seeks public input on this aspect of the proposed rule. B. Sound Recording Information and Disclaimers or Disclosures in the Public Musical Works Database 1. ‘‘Sound Recording Copyright Owner’’ Information In response to the September NOI, RIAA and individual record labels expressed concern about which information will populate and be displayed to satisfy the statutory requirement to include ‘‘sound recording copyright owner’’ (SRCO) in the public musical works database.145 Specifically, RIAA explained that under current industry practice, digital music providers send royalties pursuant to information received from record companies or others releasing recordings to DMPs ‘‘via a specialized DDEX message known as the ERN (or Electronic Release Notification),’’ which is ‘‘typically populated with information about the party that is entitled to receive royalties (who may or 142 Id. at 12. Ex Parte Letter #7 at 4. 144 Id. at 2. 145 17 U.S.C. 115(d)(3)(E)(ii)(IV)(bb), (iii)(I)(dd). 143 MLC E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS2 may not be the actual legal copyright owner), because that is the information that is relevant to the business relationship between record labels and DMPs.’’ 146 In short, information in ‘‘the ERN message is not meant to be used to make legal determinations of ownership.’’ 147 RIAA noted the potential for confusion stemming from a field labelled ‘‘sound recording copyright owner’’ in the public database being populated by information taken from the labels’ ERN messages—for both the MLC (i.e., the MLC could ‘‘inadvertently misinterpret or misapply the SRCO data’’), and users of the free, public database (i.e., they could mistakenly assume that the so-called ‘‘sound recording copyright owner’’ information is authoritative with respect to ownership of the sound recording).148 Separate but relatedly, SoundExchange noted that it ‘‘devotes substantial resources’’ to tracking changes in sound recording rights ownership, suggesting that inclusion of a SRCO field ‘‘creates a potential trap for the unwary.’’ 149 A2IM & RIAA and Sony suggested that three fields—DDEX Party Identifier (DPID), LabelName, and PLine—may provide indicia relevant to determining sound recording copyright ownership.150 146 RIAA Initial September NOI Comment at 2. Although the RIAA’s initial September NOI comments suggested that the ERN feed included a field labeled sound recording copyright owner (SRCO), upon reply, it clarified that there is no such specific field. See A2IM & RIAA Reply September NOI Comment at 8 n.5. 147 RIAA Initial September NOI Comment at 2. 148 Id. at 3; see id. (‘‘If database users seek out and enter into sound recording licenses with the wrong parties and/or make payments to the wrong parties—because they misunderstand what the data in the SRCO column of the MLC database actually represents—that would negatively impact our member companies and the artists whose recordings they own and/or exclusively license.’’). Those concerns were echoed in ex parte meetings with individual record labels. Universal Music Group (‘‘UMG’’) explained that ‘‘actual copyright ownership is irrelevant’’ in the digital supply chain, as ‘‘DMPs only need to know who to pay and, maybe, who to call,’’ whereas record companies separately track copyright ownership information. UMG & RIAA Ex Parte Letter Dec. 9, 2019 at 2. UMG suggested that the MLC’s inclusion of a field labeled ‘‘sound recording copyright owner’’ might confuse relations between the actual copyright owner and the record label conveying information to the DMP, where the label is functioning as a noncopyright owner distributor through a licensing or press and distribution (P&D) arrangement. UMG & RIAA Ex Parte Letter at 2–3. Sony Music (‘‘Sony’’) expressed similar concerns, suggesting that the Office’s regulations specify how the ‘‘sound recording copyright owner’’ line in the public database should be labeled or defined to minimize confusion. Sony & RIAA Ex Parte Letter Dec. 9, 2019 at 1–2. 149 SoundExchange Initial September NOI Comment at 11–12. 150 Sony & RIAA Ex Parte Letter at 2 (noting that ‘‘DIY artists and aggregators serving that community’’ may be most likely to populate the VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 In the April NOI, the Copyright Office sought public comment regarding which data should be in the public database to satisfy the statutory requirement, including whether to require inclusion of multiple fields to lessen the perception that a single field contains definitive data regarding sound recording copyright ownership information.151 ARM states that it does not object ‘‘to a regulation that requires the MLC to include [DDEX Party Identifier (DPID), LabelName, and PLine] in the Database, provided the fields are each labeled in a way that minimizes confusion and/or misunderstanding,’’ as ‘‘this will lessen the perception that a single field contains definitive data regarding sound recording copyright ownership information.’’ 152 The MLC ‘‘has no issue with including LabelName and DPID field); A2IM & RIAA Reply September NOI Comment at 8–10 (identifying DPID, LabelName, and PLine fields in relation to sound recording copyright owner information). The LabelName represents the ‘‘brand under which a Release is issued and marketed. A Label is a marketing identity (like a MusicPublisher’s ‘Imprint’ in book publishing) and is not the same thing as the record company which controls it, even if it shares the same name. The control of a Label may move from one owner to another.’’ Digital Data Exchange (‘‘DDEX’’), DDEX Data Dictionary, http:// service.ddex.net/dd/ERN411/dd/ddex_Label.html (last visited Sept. 1, 2020). As noted by A2IM & RIAA, ‘‘PLine’’ is ‘‘[a] composite element that identifies the year of first release of the Resource or Release followed by the name of the entity that owns the phonographic rights in the Resource or Release. . . . In the case of recordings that are owned by the artist or the artist’s heirs but are licensed to one of [their] member companies, the PLine field typically lists those individuals’ names, even though they generally are not actively involved in commercializing those recordings.’’ A2IM & RIAA Reply September NOI Comment at 9 (citing Music Business Association and DDEX, DDEX Release Notification Standard Starter Guide for Implementation 28 (July 2016), https:// kb.ddex.net/download/attachments/327717/ MusicMetadata_DDEX_V1.pdf). DPID ‘‘is an alphanumeric identifier that identifies the party delivering the DDEX message,’’ and ‘‘is also generally the party to whom the DMP sends royalties for the relevant sound recording.’’ Id. at 8. 151 85 FR at 22577. 152 ARM April NOI Comment at 4. A2IM & RIAA initially stated that ‘‘[b]ecause the PLine party is, in many cases, an individual who would not want to be listed in a public database and is often not the party who commercializes the recording, the regulations should prohibit that party name from appearing in the public-facing database.’’ A2IM & RIAA Reply September NOI Comment at 9. The Office understands that ARM, of which A2IM and RIAA are members, does not object to PLine being displayed in the public musical works database. For DPID, the Office also understands that ARM does not object to including the DPID party’s name in the public database, but does ‘‘object to the numerical identifier being disclosed, as the list of assigned DPID numbers is not public and disclosing individual numbers (and/or the complete list of numbers) could have unintended consequences.’’ ARM NPRM Comment at 10, U.S. Copyright Office Dkt. No. 2020–5, available at https:// beta.regulations.gov/document/COLC-2020-00050001. PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 58179 PLine information in the public database to the extent the MLC receives that information from the DMPs,’’ but expressed concern about including DPID because it ‘‘does not identify sound recording copyright owner, but rather, the sender and/or recipient of a DDEX-formatted message.’’ 153 The DLC states that LabelName and Pline ‘‘are adequate on their own,’’ as DPID ‘‘is not a highly valuable data field,’’ and contends that the burden of converting DPID numerical codes into parties’ names (to address ARM’s concern about displaying the numerical identifier) outweighs any benefit of including DPID in the public database.154 The Recording Academy, although maintaining that ‘‘DDEX ERN information is an important source of reliable and authoritative data about a sound recording,’’ contends that ‘‘many of the fields serve a distinct purpose in the digital supply chain and do not satisfy the ‘sound recording copyright owner’ field required in the MLC database.’’ 155 Having considered all relevant comments on this issue, it seems that DPID does not have as strong a connection to the MLC’s matching efforts or the mechanical licensing of musical works as the other fields identified as relevant to the statutory requirement to list a sound recording copyright owner. In light of this, and the commenters’ concerns, the proposed rule would not require the MLC to include DPID in the public database. In case the MLC later decides to include DPID in the public database, given the confidentiality considerations raised, the proposed rule states that the DPID party’s name may be displayed, but not the numerical identifier. In addition, because industry practice has not included a single data field to provide definitive data regarding sound recording copyright ownership, to 153 MLC April NOI Comment at 13. See also Digital Data Exchange (‘‘DDEX’’) NPRM Comment at 1–2, U.S. Copyright Office Dkt. No. 2020–5, available at https://beta.regulations.gov/document/ COLC-2020-0005-0001 (‘‘[T]he DPID, although a unique identifier and in relevant instances an identifier of ‘‘record companies’’, does not identify sound recording copyright owners. It only identifies the sender and recipient of a DDEX formatted message and, in certain circumstances, the party that the message is being sent on behalf of.’’). 154 DLC Letter July 13, 2020 at 10 (stating that while converting the DPID numerical code into the party’s actual name of reporting purposes ‘‘is conceptually possible’’ for DMPs, ‘‘it would require at least a substantial effort for some services’’ (around one year of development), and ‘‘would be an impracticable burden for some others’’). 155 Recording Academy April NOI Comment at 3. Compare ARM April NOI Comment at 5 (stating ‘‘there is no single field in the ERN that can simultaneously tell the public who owns a work, who distributes the work and who controls the right to license the work’’). E:\FR\FM\17SEP2.SGM 17SEP2 58180 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules satisfy the statute’s requirement to include information regarding ‘‘sound recording copyright owner,’’ the proposed rule requires the MLC to include data for both LabelName and PLine in the public database, to the extent reasonably available.156 In light of numerous comments expressing similar views on this subject, the Office tentatively concludes that inclusion of these two fields would adequately satisfy the statutory requirement by establishing an avenue for the MLC to include relevant data that is transmitted through the existing digital supply chain, and thus reasonably available for inclusion in the public database. As for labeling these fields, the MLC contends that ‘‘the names or labels assigned to these fields in the public database is not ultimately the MLC’s decision,’’ claiming that ‘‘it is ultimately at DDEX’s discretion.’’ 157 The Office strongly disagrees with this notion. While DDEX ‘‘standardizes the formats in which information is represented in messages and the method by which the messages are exchanged’’ ‘‘along the digital music value chain’’ 158 (e.g., between digital music providers and the MLC), DDEX does not control the public database or how information is displayed and/or labeled in the public database. While the Office wishes to afford the MLC some flexibility in administering the public database, and thus tentatively declines to regulate the precise names of these fields,159 due to the comments noted above, the proposed rule precludes the MLC from labeling either the PLine or LabelName field ‘‘sound recording copyright owner,’’ and requires the MLC to consider industry practices when labeling fields in the public database to jbell on DSKJLSW7X2PROD with PROPOSALS2 156 As the MMA also requires ‘‘sound recording copyright owner’’ to be reported by DMPs to the mechanical licensing collective in monthly reports of usage, the Office has separately issued an interim rule regarding which information should be included in such reports to satisfy this requirement. Because industry practice has not included a single data field to provide definitive data regarding sound recording copyright ownership, that rule proposes DMPs can satisfy this obligation by reporting information in the following fields: LabelName and PLine. See also U.S. Copyright Office, Interim Rule, Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020–5, published elsewhere in this issue of the Federal Register. 157 MLC Ex Parte Letter #7 at 4. 158 DDEX NPRM Comment at 1, U.S. Copyright Office Dkt. No. 2020–5, available at https:// beta.regulations.gov/document/COLC-2020-00050001. 159 See ARM April NOI Comment at 5 (suggesting that ‘‘LabelName’’ be described as ‘‘U.S. Releasing Party (if available),’’ and that ‘‘PLine’’ be described as ‘‘Sound Recording Owner of Record (who may not be the party that commercializes the recording; note that this party may change over time)’’). VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 reduce the likelihood of user confusion.160 The Office appreciates the MLC’s intention to ‘‘make available in the database a glossary or key, which would include field descriptors.’’ 161 The Office specifically encourages the MLC to consider ARM’s labeling suggestions with respect to the PLine and LabelName fields. 2. Disclaimer Relatedly, the Office received persuasive comments requesting that the MLC be required to include a conspicuous disclaimer regarding sound recording copyright ownership information in its database. For example, in response to the September NOI, RIAA suggested that the MLC should be required to ‘‘include a clear and conspicuous disclaimer on the home screen’’ of the public database that it does not purport to provide authoritative information regarding sound recording copyright owner information.162 A2IM & RIAA, CISAC & BIEM, and SoundExchange agreed that the public database should display such a disclaimer.163 And the MLC itself agreed to display a disclaimer that its database should not be considered an authoritative source for sound recording information.164 Subsequent comments in response to the April NOI similarly pushed for such a disclaimer,165 and the MLC reiterated its intention to include a disclaimer that the public database is not an authoritative source for sound recording information.166 Both ARM and the Recording Academy further suggested that the disclaimer include a link to SoundExchange’s ISRC Search database (located at https:// isrc.soundexchange.com).167 160 The same limitation applies if the MLC elects to include DPID information. 161 MLC Ex Parte Letter #7 at 4. 162 RIAA Initial September NOI Comment at 10. 163 A2IM & RIAA Reply September NOI Comment at 9 (urging Office to require ‘‘a strong, prominent disclaimer’’ to ‘‘make[] it explicitly clear that the database does not purport to provide authoritative information about sound recording copyright ownership’’); CISAC & BIEM Reply September NOI Comment at 8 (‘‘CISAC and BIEM also encourage the use of appropriate disclaiming language in regard to the content of the database, where necessary.’’); SoundExchange Initial September NOI Comment at 12 (‘‘At a minimum, the MLC Database should at least include a disclaimer that the MLC Database is not an authoritative source of sound recording rights owner information.’’). 164 MLC Reply September NOI Comment at 36– 37. 165 ARM April NOI Comment at 6–7; Recording Academy April NOI Comment at 3–4. 166 MLC April NOI Comment at 13. 167 ARM April NOI Comment at 6–7; Recording Academy April NOI Comment at 3–4. The RIAA has designated SoundExchange as the authoritative source of ISRC data in the U.S. ARM Ex Parte Letter July 27, 2020 at 2; RIAA, RIAA Designates SoundExchange as Authoritative Source of ISRC PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 In light of the comments received urging a disclaimer, and the fact that no single field may indicate sound recording copyright ownership, the proposed rule requires the MLC to include in the public-facing version of the musical works database a conspicuous disclaimer that states that the database is not an authoritative source for sound recording information, and explains the labeling of information in the database related to sound recording copyright owner, including the ‘‘LabelName’’ and ‘‘PLine’’ fields.168 The proposed rule would not require that the disclaimer include a link to SoundExchange’s ISRC Search database, though it certainly does not prohibit such inclusion. 3. Populating and Deduping Sound Recording Information in the Public Musical Works Database The statute requires the MLC to ‘‘establish and maintain a database containing information relating to musical works (and shares of such works) and, to the extent known, . . . the sound recordings in which the musical works are embodied.’’ 169 As noted, for both matched and unmatched musical works, the public database must include, to the extent reasonably available to the MLC, ‘‘identifying information for sound recordings in which the musical work is embodied.’’ 170 Throughout this rulemaking and parallel rulemakings, commenters have expressed concern about the MLC using non-authoritative source(s) to populate the sound recording information in the public database. For example, ARM expressed concern about ‘‘ensuring that all sound recording data that ultimately appears in the MLC’s public-facing database is as accurate as possible and is taken from an authoritative source (e.g., SoundExchange),’’ 171 and that Data in the United States (July 22, 2020), https:// www.riaa.com/riaa-designates-soundexchange-asauthoritative-source-of-isrc-data-in-the-unitedstates/. 168 See Recording Academy April NOI Comment at 3 (‘‘support[ing] the use of a disclaimer that would properly contextualize the use of ‘sound recording copyright owner’ and safeguard the legal rights of artists’’). 169 17 U.S.C. 115(d)(3)(E)(i). 170 Id. at 115(d)(3)(E)(ii)(IV)(bb), (iii)(I)(dd). 171 ARM NPRM Comment at 6, U.S. Copyright Office Dkt. No. 2020–5, available at https:// beta.regulations.gov/document/COLC-2020-00050001. See also SoundExchange Initial September NOI Comment at 12 (‘‘[T]he MLC is not in a good position to capture or track changes in sound recording rights ownership, because it does not have a direct relationship with sound recording copyright owners like SoundExchange does, nor does it have an ongoing business need to ensure that sound recording rights information is always accurate and up-to-date.’’); Jessop Initial September E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS2 ‘‘the MLC not propagate nonauthoritative sound recording data in its public-facing database and outward reporting.’’ 172 Similarly, ARM members RIAA and A2IM contend that ‘‘the MLC should be required to build its database from authoritative data that is obtained from copyright owners or their designated data providers,’’ a consideration echoed by other commenters representing sound recording interests.173 Though raised in the context of data collection by DMPs, as opposed to populating the public database, the DLC agrees with having the MLC obtain sound recording information from a single, authoritative source, such as SoundExchange, because ‘‘[w]ith record labels acting as the primary and authoritative source for their own sound recording metadata, the MLC could then rely on only a single (or limited number of) metadata field(s) from licensees’ monthly reports of usage to look up the sound recordings in the MLC database (e.g., an ISRC or digital music provider’s unique sound recording identifier that would remain constant across all usage reporting).’’ 174 The DLC further maintains that ‘‘the MLC’s suggestion to obtain disparate sound recording data from every digital music provider and significant nonblanket licensee is far less efficient than obtaining it from a single source like SoundExchange.’’ 175 By contrast, the MLC asserts that ‘‘[t]hird-party data from SoundExchange or another ‘authoritative source’ cannot, by definition, be ‘authoritative’ as to particular sound recordings made NOI Comment at 3 (‘‘The MLC should obtain sound recording information from as close to the source as possible. In practice this means from the record label or someone directly or indirectly authorized to manage this information for them.’’). As noted above, RIAA recently designated SoundExchange as the authoritative source of ISRC data in the United States. ARM Ex Parte Letter July 27, 2020 at 2; RIAA, RIAA Designates SoundExchange as Authoritative Source of ISRC Data in the United States (July 22, 2020), https://www.riaa.com/riaadesignates-soundexchange-as-authoritative-sourceof-isrc-data-in-the-united-states/. 172 ARM Ex Parte Letter July 27, 2020 at 1. See also ARM April NOI Comment at 3 (‘‘[I]t is critical that the Database not disseminate unverified data, whether received from DMPs in their reports of usage or from other third-party sources.’’). 173 A2IM & RIAA Reply September NOI Comment at 3. See SoundExchange Initial September NOI Comment at 4 (noting its ‘‘firm determination not to mix potentially suspect data provided by licensees with the authoritative data provided by rights owners in its repertoire database’’). See also Music Reports Initial September NOI Comment at 3 (‘‘[A] row of sound recording metadata provided by one DMP in relation to a discrete sound recording may differ from the row of metadata a second DMP provides in relation to the same sound recording, with additional or different data fields or identifiers unique to that DMP.’’). 174 DLC Reply September NOI Comment at 10. 175 DLC Ex Parte Letter Mar. 4, 2020 at 2. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 available through the DMP’s service, unless and until the DMP compares the third-party data to its own data to match the third-party sound recording database to the DMP’s database of tracks streamed.’’ 176 While the MLC has previously stated that it ‘‘intends to use SoundExchange as a valuable source of information for sound recording identifying information’’ (but that a regulation ‘‘requiring SoundExchange as a single source would be . . . unnecessarily limiting’’ 177), the MLC also contends that ‘‘much of the information [it] believes is necessary to build and maintain a useful database is consistent with the data the MLC believes should be provided by the DMPs in their [notices of license], through their data collection efforts, and through their usage reporting (including the reports of usage).’’ 178 The MLC maintains that ‘‘receiving from DMPs the unaltered sound recording data they originally received from the corresponding sound recording owners [in reports of usage] would both improve the MLC’s ability to match musical works to sound recordings, as the MLC would have fewer metadata matches to make (i.e., between musical works and the unaltered data for an associated sound recordings), and would better allow the MLC to ‘roll up’ sound recording data under entries that are more likely to reflect more ‘definitive’ versions of that sound recording data (i.e., the unaltered data originally provided by the sound recording owners).’’ 179 The MLC further states that ‘‘for uses where the sound recording has not yet been matched to a musical work, the sound recording data received from DMPs will be used to populate the database, as that is the only data the MLC will have for such uses,’’ and that ‘‘[f]or uses where the sound recording has been matched but all musical work ownership shares have not been claimed and are not known, the database will contain the sound recording data received from DMPs, organized and displayed under each individual musical work to which the MLC matched that sound recording usage data.’’ 180 For ‘‘sound recordings that are matched to a specific musical work and for sound recordings that are unmatched, the MLC intends to include sound recording information in the 176 MLC NPRM Comment at 11–12, U.S. Copyright Office Dkt. No. 2020–5, available at https://beta.regulations.gov/document/COLC-20200005-0001. 177 MLC Reply September NOI Comment at 11 n.7. 178 MLC Initial September NOI Comment at 24. 179 MLC Ex Parte Letter #7 at 2. 180 Id. PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 58181 disparate forms received from the DMPs that provided that information.’’ 181 Having carefully considered this issue in light of the statute and legislative history, the Office invites the MLC to take a step back as it assesses how it will populate sound recording information in the public database. Although the Office has, separately, adopted an interim rule that provides a method for the MLC to generally receive certain data fields in unaltered form that it has identified as being useful for matching, it is not foregone that the same demands must drive display considerations with respect to the public database, particularly for matched works.182 First, while perhaps not authoritative (hence the use of the disclaimer, as discussed above), the Office believes the MMA anticipates a general reliability of the sound recording information appearing in the public database.183 The MLC’s observation that data from SoundExchange is not ‘‘authoritative’’ with respect to usage of recordings, because only reports of usage provide evidence as to which sound recordings were actually streamed through a DMP’s service, does not seem dispositive. While it may be true that reports of usage are the better indicators of which sound recordings were actually streamed, the public database is not necessarily meant to serve that same function.184 The statute requires the public database to contain information relating to ‘‘the sound recordings in which the musical works are embodied,’’ which can reasonably be read as information to identify the sound recordings in which musical works are embodied, regardless of whether they were streamed pursuant to 181 Id. at 3. Copyright Office, Interim Rule, Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020–5, published elsewhere in this issue of the Federal Register. For some fields, the interim rule provides for a one-year transition period for DMPs that are not currently set up to provide this data unaltered from what was provided by the sound recording copyright owner or licensor. 183 See SoundExchange Initial September NOI Comment at 5 (‘‘[T]he success of the MLC Database . . . will depend on it having sufficiently comprehensive data of sufficiently high quality that it will be respected and used throughout the industry.’’); RIAA Initial September NOI Comment at 11 (asserting that record labels ‘‘anticipate making frequent use of the MLC database’’). 184 See SoundExchange NPRM Comment at 5, U.S. Copyright Office Dkt. No. 2020–5, available at https://beta.regulations.gov/document/COLC-20200005-0001 (‘‘Reporting by digital service providers should be viewed primarily as a means of identifying the works used by the service, rather than as a way for the MLC to learn about ownership and other characteristics of those works.’’). 182 U.S. E:\FR\FM\17SEP2.SGM 17SEP2 58182 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules disparate attendant metadata or not.185 As RIAA explains, ‘‘member labels vary the metadata they send the different DMPs in order to meet the services’ idiosyncratic display requirements,’’ which if passed to the MLC even in unaltered form, would result in the MLC ‘‘still receiv[ing] conflicting data that it will have to spend time and resources reconciling.’’ 186 Populating certain fields in the public database from reports of usage instead of from an authoritative, normalized source thus may increase the likelihood of inaccurate or confusing sound recording information in the database. Second, the MLC must issue monthly royalty reports to musical copyright owners, which will include information about the sound recordings in which their musical works are embodied.187 Inaccuracies or confusion in the public database regarding sound recording information may translate into inaccuracies in royalty statements to musical work copyright owners.188 Finally, the statute requires the MLC to grant digital music providers bulk access to the public database free of charge,189 which seems less meaningful if bulk access were to mean regurgitating the same information from reports of usage back to digital music providers. While the proposed regulatory language does not address this aspect, commenters may address this topic in their responses. Commenters may consider whether their concerns are heightened, or perhaps assuaged, by the MLC’s belief that deduplicating sound recording records, or cross-matching sound recording data, is ‘‘outside the MLC’s mandate.’’ 190 Specifically, the MLC maintains that ‘‘[t]he workable approach to deduplicating DMP audio would be for DMPs to pre-match their data against an authoritative source of sound recording data and audio, or digitally match their audio against an authoritative database of sound recording audio, and then provide the unique ID field for the audio in that jbell on DSKJLSW7X2PROD with PROPOSALS2 185 See 17 U.S.C. 115(d)(3)(E)(i), (ii)(IV)(bb), (iii)(I)(dd). 186 A2IM & RIAA Reply September NOI Comment at 2. 187 See U.S. Copyright Office, Interim Rule, Royalty Reporting and Distribution Obligations of the Mechanical Licensing Collective, Dkt. No. 2020– 6, published elsewhere in this issue of the Federal Register. 188 See SoundExchange NPRM Comment at 9, U.S. Copyright Office Dkt. No. 2020–6, available at https://beta.regulations.gov/document/COLC-20200003-0001 (expressing concern about relying on DMP reports of usage ‘‘as a primary source of the information about musical works and sound recordings that will be reported on publisher royalty statements’’). 189 17 U.S.C. 115(d)(3)(E)(v). 190 MLC Letter June 15, 2020 at 3 n.3. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 authoritative audio database, along with access for the MLC to the audio from the authoritative database.’’ 191 For both the public database and claiming portal, the MLC anticipates that for unmatched musical works, there will be separate records for each unmatched use (i.e., separate records for each stream of a sound recording embodying the unmatched musical work).192 The MLC does, however, intend to match multiple sound recordings to the same musical work in the public database and ‘‘list[ ] all of those sound recordings together as associated with the musical work’’; but observes that ‘‘it is the additional step of having the MLC be the arbiter of which sound recordings are ‘the same,’ as opposed to just reflecting which ones match to the same musical work through similar metadata, that can be problematic.’’ 193 The Office notes that as DMPs will be able to satisfy their section 115(d)(4)(B) obligations to ‘‘engage in good-faith, commercially reasonable efforts to obtain’’ sound recording information from sound recording copyright owners by arranging for the MLC to receive data directly from an authoritative source (e.g., SoundExchange),194 it may be unlikely that DMPs pre-match their data as proposed by the MLC. C. Access to Information in the Public Musical Works Database As noted above, the statute directs the Copyright Office to ‘‘establish requirements by regulations to ensure the usability, interoperability, and usage restrictions of the [public] musical works database.’’ 195 The database must ‘‘be made available to members of the public in a searchable, online format, free of charge.’’ 196 The mechanical licensing collective must make the data available ‘‘in a bulk, machine-readable format, through a widely available software application,’’ to digital music providers operating under valid notices 191 Id. 192 Id. at 4; MLC Ex Parte Letter #7 at 2 (‘‘[F]or sound recordings that are matched to a specific musical work and for sound recordings that are unmatched, the MLC intends to include sound recording information in the disparate forms received from the DMPs that provided that information. The MLC intends to show the provenance of each such row of sound recording data (i.e., the DMP from which the MLC received the sound recording data concerned), including both the name of the DMP and the DPID for that DMP.’’). 193 MLC Letter June 15, 2020 at 5. 194 See U.S. Copyright Office, Interim Rule, Music Modernization Act Notices of License, Notices of Nonblanket Activity, Data Collection and Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020–5, published elsewhere in this issue of the Federal Register. 195 17 U.S.C. 115(d)(3)(E)(vi). 196 Id. at 115(d)(3)(E)(v). PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 of license, compliant significant nonblanket licensees, authorized vendors of such digital music providers or significant nonblanket licensees, 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.’’ 197 The legislative history stresses the importance of the database and making it available to ‘‘the public without charge, with the exception of recovery of the marginal cost of providing access in bulk to the public.’’ 198 It 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.’’ 199 And it further 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.’’ 200 1. Method of Access In response to the September NOI, the DLC maintained that the mechanical licensing collective should not be required to provide more than ‘‘[b]ulk downloads (either of the entire database, or of some subset thereof) in a flat file format, once per week per user,’’ and ‘‘[o]nline song-by-song searches to query the database, e.g., through a website.’’ 201 The DLC also contended that ‘‘it would be unreasonable for digital music providers and significant nonblanket licensees to foot the bill for database features that would only benefit entities or individuals who are not paying a fair share of the MLC’s costs,’’ 202 and that application programming interfaces (‘‘APIs’’) are ‘‘not needed by digital music providers and significant nonblanket licensees.’’ 203 Multiple commenters disagreed with the DLC, asserting that real-time access to the public database—not merely a weekly file—is necessary to meet the goals of the statute. For example, SoundExchange asserted that failure to provide real-time access ‘‘could unfairly 197 Id. 198 H.R. Rep. No. 115–651, at 8; S. Rep. No. 115– 339, at 8; Conf. Rep. at 7. 199 H.R. Rep. No. 115–651, at 8; S. Rep. No. 115– 339, at 8–9; Conf. Rep. at 7. 200 H.R. Rep. No. 115–651, at 8; S. Rep. No. 115– 339, at 9; Conf. Rep. at 7. 201 DLC Initial September NOI Comment at 21. 202 Id. 203 DLC Reply September NOI Comment at 26. E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS2 distort competition for musical work license administration services by giving the MLC and its vendors preferred access to current data,’’ and that the Office should ‘‘maintain[ ] a level playing field in the market for musical work license administration services.’’ 204 A2IM & RIAA noted that it would be ‘‘damaging to the entire music ecosystem for third parties to utilize stale data, especially if they use it in connection with some sort of publicfacing, data-related business or to drive licensing or payment decisions.’’ 205 Further, FMC, MAC, and the Recording Academy also all stressed the importance of real-time access to the public database through APIs.206 In its April NOI, the Office tentatively declined to regulate the precise format in which the MLC provides bulk access to its database (e.g., APIs), so as to provide the MLC flexibility as technology develops in providing database access.207 The Office noted, however, that the MMA’s goals—to have the public database serve as an authoritative source of information regarding musical work ownership information, to provide transparency, and to be used by entities other than digital music providers and significant nonblanket licensees—‘‘support[ed] real-time access’’ to the public database, ‘‘either via bulk access or online songby-song searches.’’ 208 204 SoundExchange Reply September NOI Comment at 9. See also id. at 4–5 (stating that ‘‘[w]eekly downloads of a copy of the database are distinctly different and less useful than real-time access to current data,’’ and noting that the MLC will be making constant updates and thus a weekly download would quickly become out of date). 205 A2IM & RIAA Reply September NOI Comment at 7. 206 FMC Reply September NOI Comment at 3 (concurring with SoundExchange’s recommendations about API access, ‘‘including the recommendations that API access include unique identiÉers, catalog lookup, and fuzzy searching’’); Recording Academy Initial September NOI Comment at 4 (‘‘ensuring that the database has a user-friendly API and ‘machine-to-machine’ accessibility is important to its practical usability’’); MAC Initial September NOI Comment at 2 (asserting that having API access and ensuring interoperability ‘‘with other systems is the best way to make certain the MLC database becomes part of the overall music licensing ecosystem’’). See also RIAA Initial September NOI Comment at 11 (‘‘To facilitate efficient business-to-business use of the MLC database, the regulations should require the MLC to offer free API access to registered users of the database who request bulk access.’’); SoundExchange Reply September NOI Comment at 4–5, 8 (challenging the DLC’s assertion that providing APIs would be financially burdensome, stating that ‘‘it is not obvious that there would be a significant cost difference between providing full API access and the diminished access the DLC describes’’). 207 85 FR at 22578. 208 Id. See 17 U.S.C. 115(d)(3)(E)(v); see also RIAA Initial September NOI Comment at 11 (asserting that record labels ‘‘anticipate making VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 In response, SoundExchange maintains that bulk access to the public database should be provided via an API, though acknowledging that ‘‘[i]t does not seem necessary for the Office to regulate technical details of how the MLC implements an API.’’ 209 SoundExchange contends that to ‘‘ensure level access to the database, it must be made available via real-time, bulk access,’’ that ‘‘only a robust Application Programming Interface can deliver real-time results and achieve the industry-wide benefits of the musical works database contemplated by the MMA,’’ and that ‘‘[t]he use of APIs in modern software architectures is a commonly widespread best practice, and the level of effort behind their implementation is generally low and can be measured in weeks or even days depending on the chosen database technology.’’ 210 CISAC & BIEM, FMC, and ARM support real-time bulk access to the public database,211 with ARM stating that ‘‘[i]t is hard to imagine any way the MLC could [offer bulk access that occurs in real time, in a machinereadable format where the data is transferred via a programmable interface] short of offering API access.’’ 212 ARM also urges the Office to ‘‘require the MLC to offer API access now, while permitting it to shift to other bulk-access technical solutions if and when those become widespread within the relevant industries’’—but ‘‘[s]hould the Office decline to require API access,’’ ARM asks that the Office ‘‘require some form of bulk access and [ ] specify that the bulk-access solution provide real-time access in a machinereadable form via a programmable interface.’’ 213 frequent use of the MLC database’’); MIC Coalition Initial September NOI Comment at 3 (‘‘The opaqueness of the current music marketplace creates uncertainty that disproportionately harms small artists and independent publishers and stifles innovation. All stakeholders in the music marketplace benefit when current and accurate information about copyright ownership is easily accessible.’’). 209 SoundExchange April NOI Comment at 5. 210 SoundExchange Ex Parte Letter Sept. 1, 2020 at 1. 211 CISAC & BIEM April NOI Comment at 3 (‘‘Updated information in the database is crucial, therefore, CISAC and BIEM suggest supporting realtime access to ensure DSPs have the correct information to properly identify works.’’); FMC April NOI Comment at 2 (‘‘We appreciate the Office’s clear acknowledgment that real-time access is a priority, but are somewhat puzzled by the reluctance to require APIs. Requiring API access and interoperability doesn’t limit flexibility—done right, it enables flexibility.’’); ARM April NOI Comment at 7 (asserting that ‘‘the MLC must offer bulk access that occurs in real time, in a machinereadable format where the data is transferred via a programmable interface’’). 212 ARM April NOI Comment at 7. 213 Id. at 8. PO 00000 Frm 00015 Fmt 4701 Sfmt 4702 58183 Both the MLC and DLC agree with the Office’s tentative decision not to regulate the precise format in which the mechanical licensing collective must provide bulk access to the public database, but rather provide the collective flexibility as technology develops.214 The MLC further emphasizes its commitment ‘‘to fulfilling this important requirement,’’ and that it is ‘‘working with DDEX and its members on the format for publishing data to ensure it is useful to the wide variety of constituents.’’ 215 In addition, the MLC maintains that it ‘‘does plan to provide bulk access to the public data and will determine how best to do so once it has completed its initial development and rollout of the portal,’’ and that ‘‘one of the solutions the MLC is contemplating is to provide bulk access to the publicly-available data via an API.’’ 216 Music Report contends that the Office’s regulations should ‘‘not require any specific file delivery protocols, but rather state general principles and standards to which the MLC must be held,’’ such as ‘‘bulk, machine-readable data access to eligible parties ‘via any process for bulk data management widely adopted among music rights administrators,’ ’’ which could include ‘‘flat-file, API, and XML protocols, but could in future also include distributed ledger protocols.’’ 217 Having carefully considered this issue, the Office proposes that the MLC shall make the musical works database available to members of the public in a searchable, real-time, online format, free of charge. Regarding bulk access, the Office is inclined to agree that the MLC should—at least initially, due to its start-up nature—have some discretion regarding the precise format in which it provides bulk access to the public database. The Office is mindful, however, of the overwhelming desire for the MLC to provide bulk access through APIs from a broad swatch of organizations representing various corners of the music ecosystem. Accordingly, the proposed rule states 214 MLC April NOI Comment at 14; DLC April NOI Comment at 5. 215 MLC April NOI Comment at 14; MLC April NOI Comment at 14 & n.8. 216 MLC Ex Parte Letter #7 at 6. 217 Music Reports April NOI Comment at 4. Music Reports also asks the Office to ‘‘consider requiring the MLC to review such protocols every two years to determine whether newer protocols have been widely adopted.’’ Id. Because digital music providers, significant nonblanket licensees, and third parties may base their business processes on the format in which the mechanical licensing collective provides bulk access to the public database, the Office is hesitant to require reevaluation of that format every two years. E:\FR\FM\17SEP2.SGM 17SEP2 58184 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules that the MLC shall make the musical works database available in a bulk, realtime, machine-readable format through a process for bulk data management widely adopted among music rights administrators to: (1) Digital music providers operating under the authority of valid notices of license, and their authorized vendors, free of charge; (2) significant nonblanket licensees in compliance with their obligations under 17 U.S.C. 115(d)(6), and their authorized vendors, free of charge; (3) the Register of Copyrights, free of charge; and (4) any 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, which shall not be unreasonable. In addition, starting July 1, 2021, the MLC must provide bulk access to the public database through APIs, although the proposed rule would provide the MLC flexibility to determine how to precisely implement that requirement. jbell on DSKJLSW7X2PROD with PROPOSALS2 2. Marginal Cost Despite the statute and legislative history stating third parties may be charged the ‘‘marginal cost’’ of being provided bulk access, in response to the September NOI, A2IM & RIAA expressed concern about making the public database available to third parties ‘‘unless the fee those third parties are required to pay takes into account the cost for the MLC to acquire that data and all of the costs and hard work that goes into creating, compiling, verifying, deduping, etc. the sound recording data that will reside within the MLC database and the potential opportunity costs to [record labels] of having that data available to third parties via the MLC.’’ 218 RIAA & A2IM asked the Office to define ‘‘marginal cost’’ to ‘‘include not just the cost of creating and maintaining the bulk access, but also the cost to the MLC of acquiring the data, including payment to the data source, for the hard work of aggregating, verifying, deduping and resolving conflicts in the data.’’ 219 In its April NOI, the Office tentatively declined this request, stating that ‘‘[i]t is not clear that ‘marginal cost’ is a vague term,’’ and that the ‘‘MLC should be able to determine the best pricing information in light of its operations, based on the statutory and legislative history language.’’ 220 218 A2IM & RIAA Reply September NOI Comment at 7; see also id. (contending that otherwise thirdparty businesses ‘‘would be able to access that data at a highly subsidized, below-market price’’). 219 Id. at 8. 220 85 FR at 22579; see Conf. Rep. at 7 (‘‘Given the importance of this database, the legislation makes clear that it shall be made available to the VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 In response, ARM asks the Office to reconsider its decision.221 By contrast, Music Reports, a provider of music copyright ownership information and rights administration services, contends that ‘‘marginal cost’’ should be ‘‘acknowledged as modest’’ and read to mean solely the cost of making the data available to such person or entity.222 Music Reports further maintains that ‘‘the cost of making such data available in bulk is non-trivial, but not expensive when distributed over time and among multiple parties,’’ and that even where a range of formats, protocols, and choreographies are offered, ‘‘and even when offered at high frequency and on a highly contemporary basis, once those elements are established and made public, the cost to maintain them tends to be relatively fixed and modest.’’ 223 For its part, the MLC agreed with the Office’s tentative conclusion that the MLC should be able to determine the best pricing information for bulk access to the database ‘‘to third parties not enumerated in the statute.’’ 224 The Office notes that the MLC is required to provide access in a ‘‘bulk, machine-readable format’’ to digital music providers operating under the authority of valid notices of license and significant nonblanket licensees in compliance with their obligations under 17 U.S.C. 115(d)(6).225 Given that the statute envisions digital service providers and significant nonblanket licensees funding the mechanical licensing collective’s activities, which includes the creation and maintenance of a public musical works database,226 and that the term ‘‘marginal cost’’ is not vague, it is difficult for the Office to see how Congress intended third parties to offset the larger cost of the collective acquiring the data and aggregating, verifying, deduping and resolving Copyright Office and the public without charge, with the exception of recovery of the marginal cost of providing access in bulk to the public.’’); see also Music Reports Initial September NOI Comment at 5 (‘‘Music Reports notes that the marginal cost of automated daily data delivery protocols is relatively trivial, and calls upon the Office to ensure that such automated delivery be made available upon the first availability of the [public] database, and that the fee schedule scrupulously adhere to the ‘marginal cost’ standard.’’). 221 ARM April NOI Comment at 9. 222 Music Reports April NOI Comment at 7. 223 Id. at 8; see also Music Reports Initial September NOI Comment at 5 (‘‘Music Reports notes that the marginal cost of automated daily data delivery protocols is relatively trivial, and calls upon the Office to ensure that such automated delivery be made available upon the first availability of the [public] database, and that the fee schedule scrupulously adhere to the ‘marginal cost’ standard.’’). 224 MLC April NOI Comment at 14. 225 See 17 U.S.C. 115(d)(3)(E)(v)(I)–(II). 226 See id. at 115(d)(3)(E), (d)(4)(C), (d)(7)(A). PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 conflicts in the data. Rather, the legislative history emphasizes the importance of accessibility to the public database 227 and indicates an intent to create a level playing field, recognizing that ‘‘[m]usic 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.’’ 228 Requiring third parties to pay more than the ‘‘marginal cost’’ could create commercial disadvantages that the MMA sought to eliminate. Accordingly, the proposed rule states that the mechanical licensing collective shall make the musical works database available in a bulk, real-time, machinereadable format to any 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, which shall not be unreasonable.229 This allows the MLC to determine the best pricing information in light of its operations, while providing reassurance that ‘‘marginal cost’’ will not be unreasonable. 3. Abuse The legislative history states that in cases of efforts by third parties to bypass the marginal cost recovery for bulk access (i.e., abuse), the MLC ‘‘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.’’ 230 In response to the September NOI, both the MLC and DLC proposed regulatory language that would provide the MLC discretion to block efforts to bypass the 227 Conf. Rep. at 7 (‘‘Given the importance of this database, the legislation makes clear that it shall be made available to the Copyright Office and the public without charge, with the exception of recovery of the marginal cost of providing access in bulk to the public.’’). 228 See id. at 6. See also DLC April NOI Comment at 5 (‘‘[T]he Office should ensure that neither the MLC nor its vendors are given a special competitive advantage because of their responsibility for maintaining this database.’’); SoundExchange Ex Parte Letter Sept. 1, 2020 at 1 (‘‘[T]he musical works database should be a resource for the entire music industry,’’ and ‘‘regulations should ensure that potential competitors have the same access to MLC data and the MLC database enjoyed by the MLC’s vendors.’’). 229 Music Reports also asks that bulk access to the public database be provided on a ‘‘competitionneutral basis.’’ Music Reports April NOI Comment at 5. Because the proposed rule requires the mechanical licensing collective to provide bulk access to any third party that pays the ‘‘marginal cost’’ of doing so, the Office does not believe such a condition needs to be codified in regulations. 230 H.R. Rep. No. 115–651, at 8; S. Rep. No. 115– 339, at 8–9; Conf. Rep. at 7. E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS2 marginal cost recovery.231 A2IM & RIAA also suggested that the MLC be required to implement technological protection measures (‘‘TPMs’’) to reduce the likelihood of third parties ‘‘scraping’’ data without paying any fee.232 In the April NOI, the Office agreed that, in principle, the MLC should at a minimum have such discretion, and sought public input on any issues regarding the mechanical licensing collective’s ability to block efforts to bypass the marginal cost recovery, particularly how to avoid penalizing legitimate users while providing the collective flexibility to police abuse, and whether regulatory language should address application of TPMs.233 Both the MLC and DLC reiterate their support of granting the mechanical licensing collective discretion to block third parties from bulk access to the public database after attempts to bypass marginal cost recovery,234 and no commenters opposed this proposal. The MLC further contends that it should have the discretion to block bulk database access where persons have engaged in other unlawful activity with respect to the database.235 In light of these comments, the proposed rule states that the MLC shall establish appropriate terms of use or other policies governing use of the database that allows it to suspend access to any individual or entity that appears, in the collective’s reasonable determination, to be attempting to bypass the MLC’s right to charge a fee to recover its marginal costs for bulk access through repeated queries, or to otherwise be engaging in unlawful activity with respect to the database (including, without limitation, seeking to hack or unlawfully access confidential, non-public information contained in the database) or misappropriating or using information from the database for improper purposes. To ensure transparency regarding which persons or entities have had bulk database access suspended, as discussed more below, the proposed rule requires the mechanical licensing 231 MLC Initial September NOI Comment at 25; DLC Reply September NOI Comment Add. at A–17. 232 A2IM & RIAA Reply September NOI Comment at 7. 233 85 FR at 22579. 234 MLC April NOI Comment at 15 (‘‘[A] regulation allowing the MLC to block efforts by non-licensees or significant non-blanket licensees to bypass the marginal cost recovery for bulk database access through repeated queries would be useful.’’); DLC April NOI Comment at 5 (‘‘DLC reiterates its prior comment that the problem of abusive access can be adequately addressed by empowering the MLC to block efforts to bypass marginal cost recovery.’’). 235 MLC April NOI Comment at 15. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 collective to identify such persons and entities in its annual report and explain the reason(s) for suspension. 4. Restrictions on Use In response to the September 2019 NOI, CISAC & BIEM asked for regulations defining ‘‘strict terms and conditions’’ for use of data from the database by digital music providers and significant nonblanket licensees (and their authorized vendors), ‘‘including prohibition for DSPs to use data for purposes other than processing uses and managing licenses and collaborating with the MLC in data collection.’’ 236 By contrast, the DLC maintained that ‘‘licensees should be able use the data they receive from the MLC for any legal purpose.’’ 237 While the MLC ‘‘agree[d] that there should be some reasonable limitation on the use of the information to ensure that it is not misappropriated for improper purposes’’ and stated that it ‘‘intends to include such limitation in its terms of use in the database,’’ the MLC contended that appropriate terms of use should address potential misuse of information from the public database (rather than regulations).238 In its April 2020 NOI, the Office agreed that while it will be important for the collective to develop reasonable terms of use to address potential misuse of information in the public database, and that it appreciates the role that contractual remedies may play to deter abuse, the MMA directs the Office to issue regulations regarding ‘‘usage restrictions,’’ in addition to usability and interoperability of the database.239 The Office also acknowledged the risk of misuse, and sought further public input on any issues that should be considered relating to restrictions on usage of information in the public database, including whether regulatory language should address remedies for misuse (and if so, how and why), or otherwise provide a potential regulatory floor for the MLC’s terms of use.240 Comments in response to the Office’s April 2020 notification were mixed. CISAC & BIEM again asked for ‘‘strict rules for the use of data available on the MLC database by the public, prohibiting commercial uses and allowing exclusively lookup functions,’’ 241 whereas Music Reports contends that data in the public database should be available for any legal use.242 FMC is 236 CISAC & BIEM Initial September NOI Comment at 4. 237 DLC Initial September NOI Comment at 21. 238 MLC Reply September NOI Comment at 37. 239 85 FR at 22579; 17 U.S.C. 115(d)(3)(E)(vi). 240 85 FR at 22579. 241 CISAC & BIEM April NOI Comment at 3 242 Music Reports April NOI Comment at 7. PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 58185 ‘‘inclined to want to see some reasonable terms and conditions’’ regarding use of the public database, but that ‘‘[i]t’s entirely appropriate for the Office to offer a floor.’’ 243 The DLC contends that flexibility is appropriate regarding restrictions on use, that ‘‘the specific operational realities of the database to lend themselves to useful ex ante regulation,’’ and thus reiterated that ‘‘abusive access can be adequately addressed by empowering the MLC to block efforts to bypass marginal cost recovery.’’ 244 For its part, the MLC continues to maintain that ‘‘there should be some reasonable limitation on the use of the information in the MLC database to ensure that it is not misappropriated for improper purposes,’’ and that it intends to ‘‘include such limitation in its terms of use in the database.’’ 245 In response to the Office’s concerns about misappropriation of personally identifiable information (PII) by bad actors,246 the MLC maintains that it ‘‘does not intend to include in the public database the types of information that have traditionally been considered PII, such as Social Security Number (SSN), date of birth (DOB), and home address or personal email (to the extent those are not provided as the contact information required under 17 U.S.C. 115(d)(3)(E)(ii)(III)),’’ and that it ‘‘further intends to protect other types of PII.’’ 247 But the MLC also asks that it ‘‘be afforded the flexibility to disclose information not specifically identified by statute that would still be useful for the database but would not have serious privacy or identity theft risks to individuals or entities.’’ 248 As noted above, the proposed rule requires the mechanical licensing collective to establish appropriate terms of use or other policies governing use of the database that allow it to suspend access to any individual or entity that appears, in the collective’s reasonable determination, to be engaging in unlawful activity with respect to the database (including, without limitation, seeking to hack or unlawfully access confidential, non-public information contained in the database) or misappropriating or using information from the database for improper purposes. The proposed rule also requires the MLC to identify any persons and entities in its annual report that have had database access 243 FMC April NOI Comment at 3. April NOI Comment at 5. 245 MLC April NOI Comment at 15. 246 See 85 FR at 22579. 247 MLC April NOI Comment at 16. 248 Id. at 16 n.9. 244 DLC E:\FR\FM\17SEP2.SGM 17SEP2 58186 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules suspended and explain the reason(s) for such suspension, for purposes of transparency. While wishing to grant the MLC some flexibility regarding restrictions on use regarding the public database, the Office reiterates that any database terms of use should not be overly broad or impose unnecessary restrictions upon good faith users.249 D. Transparency of MLC Operations; Annual Reporting The legislative history and statute envision the MLC ‘‘operat[ing] in a transparent and accountable manner’’ 250 and ensuring that its ‘‘policies and practices . . . are transparent and accountable.’’ 251 The MLC itself has expressed its commitment to transparency, both by including transparency as one of its four key principles underpinning its operations on its current website,252 and in written comments to the Office.253 As noted in the April NOI, one avenue for MLC transparency is through its annual report.254 The MMA requires the MLC to publish an annual report no later than June 30 of each year after the license availability date, setting forth information regarding: (1) Its operational and licensing practices; (2) how royalties are collected and distributed; (3) budgeting and expenditures; (4) the collective total costs for the preceding calendar year; (5) the MLC’s projected annual budget; (6) aggregated royalty receipts and payments; (7) expenses that are more than ten percent of the MLC’s annual budget; and (8) the MLC’s efforts to locate and identify copyright owners of unmatched musical works (and shares of works).255 The MLC must deliver a copy of the annual report to the Register of Copyrights and make this report publicly available.256 249 See 85 FR at 22579. Rep. No. 115–339, at 7. 251 17 U.S.C. 115(d)(3)(D)(ix)(I)(aa). 252 The MLC, Mission and Principles, https:// themlc.com/mission-and-principles (last visited Sept. 1, 2020) (‘‘The MLC will build trust by operating transparently. The MLC is governed by a board of songwriters and music publishers who will help ensure our work is conducted with integrity.’’). See also The MLC, The MLC Process, https:// themlc.com/how-it-works (last visited Sept. 1, 2020) (‘‘The MLC is committed to transparency. The MLC will make data on unclaimed works and unmatched uses available to be searched by registered users of The MLC Portal and the public at large.’’). 253 See, e.g., MLC Reply September NOI Comment at 42–43 (‘‘The MLC is committed to transparency and submits that, while seeking to enact regulations is not an efficient or effective approach, the MLC will implement policies and procedures to ensure transparency.’’). 254 85 FR at 22572. 255 17 U.S.C. 115(d)(3)(D)(vii)(I)(aa)–(hh); Conf. Rep. at 7. 256 17 U.S.C. 115(d)(3)(D)(vii)(I), (II). jbell on DSKJLSW7X2PROD with PROPOSALS2 250 S. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 The annual report provides much of the information requested by parties about the collective’s activities. For example, commenters sought disclosure of information in specific areas the statute envisions the annual report addressing, such as board governance,257 the manner in which the MLC will distribute unclaimed royalties,258 development updates and certifications related to its IT systems,259 and the MLC’s efforts to identify copyright owners.260 The MLC itself recognized that its annual report is one way in which it intends to ‘‘promote transparency.’’ 261 But based on the September NOI comments, the Office thus asked for further public input on specific types of information the MLC should include in its annual report, including whether to include issues related to vendor selection criteria and performance, board and committee selection criteria, and actual or potential conflicts raised with and/or addressed by its board of directors, if any, in accordance with the MLC’s policy.262 In response, the DLC, SGA, and FMC agree that the MLC’s annual report should be used to provide transparency on the collective’s activities more generally,263 with both the DLC and 257 Recording Academy Reply September NOI Comment at 2. 258 Lowery Reply September NOI Comment at 8; Monica Corton Consulting Reply September NOI Comment at 3. 259 Lowery Reply September NOI Comment at 5. 260 SGA Initial September NOI Comment at 6. CISAC & BIEM contend that ‘‘[c]larifications should be made on how musical works will be matched to sound recording and how far these cross-references will not conflict with matching and or claims conducted by other entities, which could raise identification conflicts at DSP level.’’ CISAC & BIEM Initial September NOI Comment at 3. The statute requires the MLC to disclose in its annual report ‘‘the efforts of the collective to locate and identify copyright owners of unmatched musical works (and shares of works)’’ with respect to administration of the U.S. blanket license under section 115. 17 U.S.C. 115(d)(3)(D)(vii)(I)(hh). 261 The MLC, Transparency, https://themlc.com/ faqs/categories/transparency (last visited Sept. 1, 2020) (noting that the MLC will ‘‘promote transparency’’ by ‘‘[p]roviding an annual report to the public and to the Copyright Office detailing the operations of The MLC, its licensing practices, collection and distribution of royalties, budget and cost information, its efforts to resolve unmatched royalties, and total royalties received and paid out’’). 262 85 FR at 22572; see also National Association of Independent Songwriters (‘‘NOIS’’) et al. Initial September NOI Comment at 16; MAC Initial September NOI Comment at 2; Lowery Reply September NOI Comment at 8; SGA Reply September NOI Comment at 5. 263 See DLC April NOI Comment at 3 (stating that the transparency requirements in the annual report ‘‘are critical to ensuring that all industry participants—songwriters, publishers, licensees, and the Copyright Office itself—can confirm that the MLC is operating effectively and in the best PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 FMC stating that the annual report should include information about board governance and the selection and criteria used for the collective’s vendors.264 CISAC & BIEM maintain that the annual report should include information regarding the ‘‘global amount of accrued undistributed royalties.’’ 265 SGA proposes that a section of the annual report ‘‘be dedicated to an independent report by the board’s music creator representatives on their activities in support of songwriter and composer interests, the handling of conflictrelated problems by the board and its various controlled committees, and the issues of conflict that remain to be addressed and resolved.’’ 266 Other commenters asked for MLC oversight to ensure disclosure of certain information, though without directly linking such oversight to the annual report. For example, one commenter expressed concern about the ability of the MLC to apply unclaimed accrued royalties on an interim basis to defray the collective’s costs (and the transparency of any decisions to do so), should the administrative assessment fail to cover current collective total costs.267 In the Office’s separate rulemaking regarding royalty statements, other commenters expressed a desire to impose a deadline on the MLC’s distribution of royalties to copyright owners to ensure prompt interests of the industry.’’); SGA April NOI Comment at 6 (‘‘As the Copyright Office stated in its Notice, another ‘avenue for transparency with respect to the MLC is through its annual report.’ SGA emphatically agrees with this assessment . . .’’); FMC April NOI Comment at 1 (agreeing that the annual report should include information about board governance, the manner in which the collective will distribute unclaimed royalties, development updates and certifications related to its IT systems, and the collective’s efforts to identify copyright owners); see id. (‘‘Annual reports would ideally also offer a sense where the areas of growth and needs for additional effort might lie, with regards to demographics and genres; this sort of candid self-assessment, would help writers and industry allies be effective partners to the MLC in reaching these populations most effectively.’’). 264 DLC April NOI Comment at 3; FMC April NOI Comment at 1. 265 CISAC & BIEM April NOI Comment at 2. 266 SGA April NOI Comment at 7. Although the Office tentatively declines to require an independent report from the board’s music creator representatives through regulation, the Office fully expects the MLC to give voice to its board’s songwriter representatives as well as its statutory committees, whether through its annual reporting or other public announcements. 267 See Castle April NOI Comment at 13 (stating Office ‘‘regulations should provide that there be some written public statement by The MLC’s CFO . . . that these funds are being approved by the board for disbursement before the taking along with a justification statement. The MLC board should have to sign up to that statement with full transparency of why there is this compelling need and why that need can only be met this way.’’); 17 U.S.C. 115(d)(7)(C). E:\FR\FM\17SEP2.SGM 17SEP2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules payment, but presumably also to provide copyright owners some estimation as to when they will be paid. For its part, although the MLC states that it ‘‘is committed to providing additional information about other areas of its operations in the annual report or in other public disclosures,’’ 268 and that it ‘‘is making public a substantial amount of information concerning its operations and communications as such information becomes available,’’ 269 it ‘‘does not believe that such further regulation in this area is necessary, as the MMA already identifies with sufficient detail the subjects that the MLC is to report on in the annual report,’’ 270 and any such regulation would be ‘‘premature.’’ 271 The MLC contends that it ‘‘has already publicly disclosed substantial details of the process by which it selected its primary technology and royalty administration vendors, and publicly filed copies of its [request for information] and [request for proposals],’’ 272 and regarding ‘‘the selection process of its initial board of directors and statutory committees,’’ with future board and committee selections being made pursuant to the MLC’s by-laws, which are currently public.273 The MLC expresses concern that disclosure regarding vendor selection ‘‘will likely have a chilling effect on vendor participation in future RFIs and RFPs because bidders that do not want information in their proposals to be made publicly available will elect not to participate,’’ 274 while noting that statutory-required reporting regarding ‘‘aggregated royalty receipts and payments’’ and ‘‘efforts to locate and identify copyright owners of unmatched works (and shares of works)’’ will speak to vendor performance.275 The MLC 268 MLC April NOI Comment at 4. at 7. 270 Id. at 3. 271 Id. at 4. 272 Id. at 5. 273 Id. at 6; see The MLC, Governance and Bylaws, https://themlc.com/governance (last visited Sept. 1, 2020). The MLC notes that the collective’s board appointments are subject to additional oversight given that they require the approval of the [Library of Congress].’’ MLC April NOI Comment at 6. The Copyright Office also makes available information concerning the MLC’s board membership and the procedure to fill MLC board and statutory committee vacancies. See U.S. Copyright Office, MLC and DLC Contact Information, Boards of Directors, and Committees, https://www.copyright.gov/music-modernization/ mlc-dlc-info/ (last visited Sept. 1, 2020). 274 MLC April NOI Comment at 5. 275 Id. at 6. The MLC also suggests that because the statute requires the annual report to include information regarding ‘‘expenses that are more than 10 percent of the annual mechanical licensing collective budget,’’ ‘‘[t]his definition will include the MLC’s primary vendor, and thus provide even further disclosures.’’ MLC Ex Parte Letter #7 at 7; maintains that if the Office does decide to require disclosure of vendor selection information in the annual report, the term ‘‘vendor’’ should mean ‘‘any vendor who is both performing services related to the mechanical licensing collective’s matching and royalty accounting responsibilities and who received compensation in an amount greater than 10% of the mechanical licensing collective’s budget.’’ 276 In addition, the MLC notes that ‘‘[i]t is not common practice to publish the details of how a conflicts policy is implemented or applied, because such publication may violate confidentiality obligations of board members that may be subject to separate confidentiality agreements,’’ and that ‘‘it is appropriate for the MLC’s conflicts policy to be enforced internally, with directors having the option to share any conflicts concerns privately with the MLC’s counsel and recuse themselves from votes if appropriate.’’ 277 Given the overwhelming desire for transparency regarding the MLC’s activities, and the ability of the annual report to provide such transparency, the proposed rule requires the MLC to disclose certain information in its annual report besides the statutorilyrequired categories of information. First, the annual report must disclose the MLC’s selection of board members and criteria used in selecting any new board members during the preceding calendar year. Second, the annual report must disclose the MLC’s selection of new vendors hired to assist with the technological or operational administration of the blanket license during the preceding calendar year, including the criteria used in deciding to select such vendors, and any performance reviews of such vendors.278 The proposed rule intends jbell on DSKJLSW7X2PROD with PROPOSALS2 269 Id. VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 17 U.S.C. 115(d)(3)(D)(vii)(I)(gg). Identification of the MLC’s vendors, should they exceed ten percent of the MCL’s budget, is not the same as identifying the criteria used to select those vendors, although the Office agrees this statutory requirement should encourage the MLC to be hearty in its annual reporting with respect to the performance of primary vendors as a result. 276 MLC Ex Parte Letter #7 at 7. The MLC’s startup assessment is $33,500,000 and its 2021 annual assessment is $28,500,000, indicating that a 10% threshold would limit disclosure to vendors paid several million dollars. See 37 CFR 390.2(a), (b). 277 MLC April NOI Comment at 6. 278 The statute provides that the MLC is authorized to ‘‘arrange for services of outside vendors and others, to support the activities of the mechanical licensing collective.’’ 17 U.S.C. 115(d)(3)(C)(i)(VII). The MLC selected its vendor Harry Fox Agency (‘‘HFA’’) without advance notice to the Office, following the designation of the MLC. Given commenters’ concerns regarding HFA’s past performance, the Office is receptive to receiving continual feedback regarding future performance of PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 58187 to include vendors directly involved with collective’s administration of the section 115 license, versus any vendors it may hire, generally (e.g., water delivery). Third, the annual report must disclose whether the MLC, pursuant to 17 U.S.C. 115(d)(7)(C), has applied any unclaimed accrued royalties on an interim basis to defray costs in the event that the administrative assessment is inadequate to cover collective total costs. Fourth, the annual report must disclose the average processing and distribution times for distributing royalties to copyright owners. And fifth, as noted above, the annual report must disclose whether the MLC suspended access to any individual or entity attempting to bypass the collective’s right to charge a fee to recover its marginal costs for bulk access outlined in 17 U.S.C. 115(d)(3)(E)(v)(V) through repeated queries, or to otherwise be engaging in unlawful activity with respect to the database (including, without limitation, seeking to hack or unlawfully access confidential, nonpublic information contained in the database) or misappropriating or using information from the database for improper purposes. As expressed in the April NOI, the Office encourages the MLC to publicly share with greater particularity planning information, such as notional schedules, beta wireframes, or other documentation, to provide context to MLC stakeholders in the months leading up to the license availability date. The Office appreciates that the MLC ‘‘still intends to publicly roll out the portal for beta testing at or shortly after the end of the third quarter of this year,’’ and that ‘‘[t]here will also be alpha testing (to a smaller group) prior to beta testing.’’ 279 Relatedly, two commenters suggested that the Office’s regulations create a ‘‘feedback loop’’ to receive complaints about the mechanical licensing collective.280 CISAC & BIEM 281 agree that ‘‘the identification of a point of contact for inquiries and complaints with timely redress is an indispensable feature for transparency.’’ The Office notes that the statute requires the mechanical licensing collective to activities taken on behalf of the MLC. See Lowery Reply September NOI Comment at 3, 11–12; SGA Reply September NOI Comment at 5. 279 MLC Ex Parte Letter #7 at 4. 280 Castle April NOI Comment at 16 (contending the Office should create ‘‘a complaint webform with someone to read the complaints as they come in as part of the Office’s oversight role’’); Lowery Reply September NOI Comment at 11 (stating ‘‘regulations should provide for a feedback loop that songwriters can avail themselves of that the Copyright Office must take into account when determining its redesignation’’). 281 CISAC & BIEM April NOI Comment at 2. E:\FR\FM\17SEP2.SGM 17SEP2 58188 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules ‘‘identify a point of contact for publisher inquiries and complaints with timely redress.’’ 282 The proposed rule emphasizes this responsibility by requiring the MLC to designate a point of contact for inquiries and complaints with timely redress, including complaints regarding the public musical works database and/or the collective’s activities. The name and contact information for the point of contact must be made prominently available on the MLC’s website.283 In addition, the Copyright Office always welcomes feedback relevant to its statutory duties or service. Members of the public may communicate with the Office through the webform available https:// www.copyright.gov/help. The Office requests that any inquiries or comments with respect to the MLC or MMA be indicated accordingly. III. Subjects of Inquiry The proposed rule is designed to reasonably implement a number of regulatory duties assigned to the Copyright Office under the MMA. The Office solicits additional public comment on all aspects of the proposed rule. If the MLC believes it will need time and/or a transition period to implement any aspect of the proposed rule, the Office asks the MLC to provide an explanation and time estimate(s) for such implementation. List of Subjects in 37 CFR Part 210 Copyright, Phonorecords, Recordings. Proposed Regulations For the reasons set forth in the preamble, the Copyright Office proposes amending 37 CFR part 210 as follows: PART 210—COMPULSORY LICENSE FOR MAKING AND DISTRIBUTING PHYSICAL AND DIGITAL PHONORECORDS OF NONDRAMATIC MUSICAL WORKS 1. The authority citation for part 210 continues to read as follows: ■ Authority: 17 U.S.C. 115, 702. 2. Add §§ 210.31 through 201.33 to read as follows: ■ 282 17 U.S.C. 115(d)(3)(D)(ix)(I)(bb). U.S. Copyright Office, Section 512 of title 17 159 (2020), https://www.copyright.gov/policy/ section512/section-512-full-report.pdf (noting that while section 512 requires an online service provider’s agent information to be ‘‘publicly available’’ on its website, ‘‘there is currently no standardized practice for the location or content of user notifications regarding the takedown process,’’ and that Congress could thus ‘‘modify the language of section 512(c)(2) to provide that the designated agent’s information be not just ‘on its website in a location accessible to the public,’ but also ‘prominently displayed’ ’’); 17 U.S.C. 512(c)(2). jbell on DSKJLSW7X2PROD with PROPOSALS2 283 See VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 § 210.31 Musical works database information. (a) General. This section prescribes the rules under which the mechanical licensing collective will provide information relating to musical works (and shares of such works), and sound recordings in which the musical works are embodied, in the public musical works database prescribed by 17 U.S.C. 115(d)(3)(E), and to increase usability of the database. (b) Matched musical works. With respect to musical works (or shares thereof) where the copyright owners have been identified and located, the musical works database shall contain, at a minimum, the following: (1) Information regarding the musical work: (i) Musical work title(s); (ii) The copyright owner of the musical work (or share thereof), and the ownership percentage of that owner; (iii) Contact information for the copyright owner of the musical work (or share thereof), which can be a post office box or similar designation, or a ‘‘care of’’ address (e.g., publisher); (iv) The mechanical licensing collective’s standard identifier for the musical work; and (v) To the extent reasonably available to the mechanical licensing collective: (A) Any alternative or parenthetical titles for the musical work; (B) ISWC; (C) Songwriter(s), with the mechanical licensing collective having the discretion to allow songwriters, or their authorized representatives, to have songwriter information listed anonymously or pseudonymously; (D) Administrator(s) or other authorized entity(ies) who license the musical work (or share thereof) and/or collect mechanical royalties for use of such musical work (or share thereof) in the United States; (E) ISNI(s) and/or IPI(s) for each musical work copyright owner, and, if different, songwriter, and administrator; (F) Unique identifier(s) assigned by the blanket licensee, if reported by the blanket licensee; and (G) For classical compositions, opus and catalog numbers. (2) Information regarding the sound recording(s) in which the musical work is embodied, to the extent reasonably available to the mechanical licensing collective: (i) ISRC; (ii) Sound recording name(s), including all known alternative and parenthetical titles for the sound recording; (iii) Information related to the sound recording copyright owner, including PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 LabelName and PLine. Should the mechanical licensing collective decide to include DDEX Party Identifier (DPID) in the public database, the DPID party’s name may be displayed, but not the numerical identifier; (iv) Featured artist(s); (v) Playing time; (vi) Version; (vii) Release date(s); (viii) Producer; (ix) UPC; and (x) Other non-confidential information commonly used to assist in associating sound recordings with musical works. (c) Unmatched musical works. With respect to musical works (or shares thereof) where the copyright owners have not been identified or located, the musical works database shall include, to the extent reasonably available to the mechanical licensing collective: (1) Information regarding the musical work: (i) Musical work title(s), including any alternative or parenthetical titles for the musical work; (ii) The ownership percentage of the musical work for which an owner has not been identified; (iii) If a musical work copyright owner has been identified but not located, the identity of such owner and the ownership percentage of that owner; (iv) The mechanical licensing collective’s standard identifier for the musical work; (v) ISWC; (vi) Songwriter(s), with the mechanical licensing collective having the discretion to allow songwriters, or their authorized representatives, to have songwriter information listed anonymously or pseudonymously; (vii) Administrator(s) or other authorized entity(ies) who license the musical work (or share thereof) and/or collect mechanical royalties for use of such musical work (or share thereof) in the United States; (viii) ISNI(s) and/or IPI(s) for each musical work copyright owner, and, if different, songwriter and administrator; (ix) Unique identifier(s) assigned by the blanket licensee, if reported by the blanket licensee; and (x) For classical compositions, opus and catalog numbers. (2) Information regarding the sound recording(s) in which the musical work is embodied: (i) ISRC; (ii) Sound recording name(s), including all known alternative and parenthetical titles for the sound recording; (iii) Information related to the sound recording copyright owner, including E:\FR\FM\17SEP2.SGM 17SEP2 jbell on DSKJLSW7X2PROD with PROPOSALS2 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules LabelName and PLine. Should the mechanical licensing collective decide to include DDEX Party Identifier (DPID) in the public database, the DPID party’s name may be displayed, but not the numerical identifier; (iv) Featured artist(s); (v) Playing time; (vi) Version; (vii) Release date(s); (viii) Producer; (ix) UPC; and (x) Other non-confidential information commonly used to assist in associating sound recordings with musical works, and any additional nonconfidential information reported to the mechanical licensing collective that may assist in identifying musical works. (d) Field labeling. The mechanical licensing collective shall consider industry practices when labeling fields in the public database to reduce the likelihood of user confusion, particularly regarding information relating to sound recording copyright owner. Fields displaying PLine, LabelName, or, if applicable, DPID, information may not on their own be labeled ‘‘sound recording copyright owner.’’ (e) Data provenance. For information relating to sound recordings, the mechanical licensing collective shall identify the source of such information in the public musical works database. (f) Historical data. The mechanical licensing collective shall maintain at regular intervals historical records of the information contained in the public musical works database, including a record of changes to such database information and changes to the source of information in database fields, in order to allow tracking of changes to the ownership of musical works in the database over time. The mechanical licensing collective shall determine, in its reasonable discretion, the most appropriate method for archiving and maintaining such historical data to track ownership and other information changes in the database. (g) Personally identifiable information. The mechanical licensing collective shall not include in the public musical works database any individual’s Social Security Number (SSN), taxpayer identification number, financial account number(s), date of birth (DOB), or home address or personal email to the extent it is not musical work copyright owner contact information required under 17 U.S.C. 115(d)(3)(E)(ii)(III). The mechanical licensing collective shall also engage in reasonable, good-faith efforts to ensure that other personally identifying information (i.e., information that can be used to VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 distinguish or trace an individual’s identity, either alone or when combined with other information that is linked or linkable to such specific individual), is not available in the public musical works database, other than to the extent it is required by law. (h) Disclaimer. The mechanical licensing collective shall include in the public-facing version of the musical works database a conspicuous disclaimer that states that the database is not an authoritative source for sound recording information, and explains the labeling of information related to sound recording copyright owner, including the ‘‘LabelName’’ and ‘‘PLine’’ fields. § 210.32 Musical works database usability, interoperability, and usage restrictions. This section prescribes rules under which the mechanical licensing collective shall ensure the usability, interoperability, and proper usage of the public musical works database created pursuant to 17 U.S.C. 115(d)(3)(E). (a) Database access. (1)(i) The mechanical licensing collective shall make the musical works database available to members of the public in a searchable, real-time, online format, free of charge. In addition, the mechanical licensing collective shall make the musical works database available in a bulk, real-time, machine-readable format through a process for bulk data management widely adopted among music rights administrators to: (A) Digital music providers operating under the authority of valid notices of license, and their authorized vendors, free of charge; (B) Significant nonblanket licensees in compliance with their obligations under 17 U.S.C. 115(d)(6), and their authorized vendors, free of charge; (C) The Register of Copyrights, free of charge; and (D) Any 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, which shall not be unreasonable. (ii) Starting July 1, 2021, the mechanical licensing collective shall make the musical works database available at least in a bulk, real-time, machine-readable format under this paragraph (a)(1) through application programming interfaces (APIs). (2) Notwithstanding paragraph (a)(1) of this section, the mechanical licensing collective shall establish appropriate terms of use or other policies governing use of the database that allows the mechanical licensing collective to suspend access to any individual or entity that appears, in the mechanical licensing collective’s reasonable PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 58189 determination, to be attempting to bypass the mechanical licensing collective’s right to charge a fee to recover its marginal costs for bulk access outlined in 17 U.S.C. 115(d)(3)(E)(v)(V) through repeated queries, or to otherwise be engaging in unlawful activity with respect to the database (including, without limitation, seeking to hack or unlawfully access confidential, non-public information contained in the database) or misappropriating or using information from the database for improper purposes. (b) Point of contact for inquiries and complaints. In accordance with its obligations under 17 U.S.C. 115(d)(3)(D)(ix)(I)(bb), the mechanical licensing collective shall designate a point of contact for inquiries and complaints with timely redress, including complaints regarding the public musical works database and/or the mechanical licensing collective’s activities. The mechanical licensing collective must make publicly available, including prominently on its website, the following information: (1) The name of the designated point of contact for inquiries and complaints. The designated point of contact may be an individual (e.g., ‘‘Jane Doe’’) or a specific position or title held by an individual at the mechanical licensing collective (e.g., ‘‘Customer Relations Manager’’). Only a single point of contact may be designated. (2) The physical mail address (street address or post office box), telephone number, and email address of the designated point of contact. § 210.33 Annual reporting by the mechanical licensing collective. (a) General. This section prescribes the rules under which the mechanical licensing collective will provide certain information in its annual report pursuant to 17 U.S.C. 115(d)(3)(D)(vii). (b) Contents. Each of the mechanical licensing collective’s annual reports shall contain, at a minimum, the following information: (1) The operational and licensing practices of the mechanical licensing collective; (2) How the mechanical licensing collective collects and distributes royalties, including the average processing and distribution times for distributing royalties for the preceding calendar year; (3) Budgeting and expenditures for the mechanical licensing collective; (4) The mechanical licensing collective’s total costs for the preceding calendar year; E:\FR\FM\17SEP2.SGM 17SEP2 58190 Federal Register / Vol. 85, No. 181 / Thursday, September 17, 2020 / Proposed Rules jbell on DSKJLSW7X2PROD with PROPOSALS2 (5) The projected annual mechanical licensing collective budget; (6) Aggregated royalty receipts and payments; (7) Expenses that are more than 10 percent of the annual mechanical licensing collective budget; (8) The efforts of the mechanical licensing collective to locate and identify copyright owners of unmatched musical works (and shares of works); (9) The mechanical licensing collective’s selection of board members and criteria used in selecting any new board members during the preceding calendar year; (10) The mechanical licensing collective’s selection of new vendors during the preceding calendar year, including the criteria used in deciding to select such vendors, and any performance reviews of the mechanical licensing collective’s current vendors. Such description shall include a general description of any new request for information (RFI) and/or request for proposals (RFP) process, either copies of the relevant RFI and/or RFP or a list of the functional requirements covered in VerDate Sep<11>2014 18:11 Sep 16, 2020 Jkt 250001 the RFI or RFP, the names of the parties responding to the RFI and/or RFP. In connection with the disclosure described in this paragraph (b)(10), the mechanical licensing collective shall not be required to disclose any confidential or sensitive business information. For the purposes of this paragraph (b)(10), ‘‘vendor’’ means any vendor performing materially significant technology or operational services related to the mechanical licensing collective’s matching and royalty accounting activities; (11) Whether during the preceding calendar year the mechanical licensing collective, pursuant to 17 U.S.C. 115(d)(7)(C), applied any unclaimed accrued royalties on an interim basis to defray costs in the event that the administrative assessment is inadequate to cover collective total costs, including the amount of unclaimed accrued royalties applied and plans for future reimbursement of such royalties from future collection of the assessment; and (12) Whether during the preceding calendar year the mechanical licensing PO 00000 Frm 00022 Fmt 4701 Sfmt 9990 collective suspended access to the public database to any individual or entity attempting to bypass the collective’s right to charge a fee to recover its marginal costs for bulk access outlined in 17 U.S.C. 115(d)(3)(E)(v)(V) through repeated queries, or to otherwise be engaging in unlawful activity with respect to the database (including, without limitation, seeking to hack or unlawfully access confidential, non-public information contained in the database) or misappropriating or using information from the database for improper purposes. If the mechanical licensing collective so suspended access to the public database to any individual or entity, the annual report must identify such individual(s) and entity(ies) and provide the reason(s) for suspension. Dated: September 4, 2020. Regan A. Smith, General Counsel and Associate Register of Copyrights. [FR Doc. 2020–20078 Filed 9–16–20; 8:45 am] BILLING CODE 1410–30–P E:\FR\FM\17SEP2.SGM 17SEP2

Agencies

[Federal Register Volume 85, Number 181 (Thursday, September 17, 2020)]
[Proposed Rules]
[Pages 58170-58190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20078]



[[Page 58169]]

Vol. 85

Thursday,

No. 181

September 17, 2020

Part IV





Library of Congress





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Copyright Office





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37 CFR Part 210





The Public Musical Works Database and Transparency of the Mechanical 
Licensing Collective; Proposed Rule

Federal Register / Vol. 85 , No. 181 / Thursday, September 17, 2020 / 
Proposed Rules

[[Page 58170]]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 210

[Docket No. 2020-8]


The Public Musical Works Database and Transparency of the 
Mechanical Licensing Collective

AGENCY: U.S. Copyright Office, Library of Congress.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The U.S. Copyright Office is issuing a notice of proposed 
rulemaking 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 law establishes a new blanket license to become available on the 
January 1, 2021 license availability date that will be administered by 
a mechanical licensing collective, which will make available a public 
musical works database as part of its statutory duties. Having 
solicited public comments through previous notifications of inquiry, 
through this notice the Office is proposing regulations concerning the 
new blanket licensing regime, including prescribing categories of 
information to be included in the public musical works database, as 
well as rules related to the usability, interoperability, and usage 
restrictions of the database. The Office is also proposing regulations 
in connection with its general regulatory authority related to ensuring 
appropriate transparency of the mechanical licensing collective itself.

DATES: Written comments must be received no later than 11:59 Eastern 
Time on October 19, 2020.

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 website 
at https://copyright.gov/rulemaking/mma-transparency. 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] or 
Anna B. Chauvet, Associate General Counsel, by email at 
[email protected]. Each can be contacted by telephone by calling 
(202) 707-8350.

SUPPLEMENTARY INFORMATION:

I. Background

    On October 11, 2018, the president signed into law the Orrin G. 
Hatch-Bob Goodlatte Music Modernization Act, H.R. 1551 (``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 U.S.C. 
115.\2\ It does so by switching from a song-by-song licensing system to 
a blanket licensing regime that will become available on January 1, 
2021 (the ``license availability date''), and be administered by a 
mechanical licensing collective (``MLC'') designated by the Copyright 
Office.\3\ Among other things, the MLC is responsible for 
``[c]ollect[ing] and distribut[ing] royalties'' for covered activities, 
``[e]ngag[ing] in efforts to identify musical works (and shares of such 
works) embodied in particular sound recordings and to identify and 
locate the copyright owners of such musical works (and shares of such 
works),'' and ``[a]dminister[ing] a process by which copyright owners 
can claim ownership of musical works (and shares of such works).'' \4\ 
It also must ``maintain the musical works database and other 
information relevant to the administration of licensing activities 
under [section 115].'' \5\
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    \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\ As permitted under the MMA, the Office designated a digital 
licensee coordinator (``DLC'') to represent licensees in proceedings 
before the Copyright Royalty Judges (``CRJs'') and the Copyright 
Office, to serve as a non-voting member of the MLC, and to carry out 
other functions. 17 U.S.C. 115(d)(5)(B); 84 FR 32274 (July 8, 2019); 
see also 17 U.S.C. 115(d)(3)(D)(i)(IV), (d)(5)(C).
    \4\ 17 U.S.C. at 115(d)(3)(C)(i)(V).
    \5\ Id. at 115(d)(3)(C)(i)(IV).
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A. Regulatory Authority Granted to the Copyright Office

    The MMA enumerates several regulations that the Copyright Office is 
specifically directed to promulgate to govern the new blanket licensing 
regime, and Congress invested the Copyright Office with ``broad 
regulatory authority'' \6\ 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].'' \7\ The 
MMA specifically directs the Copyright Office to promulgate regulations 
related to the MLC's creation of a free database to publicly disclose 
musical work ownership information and identify the sound recordings in 
which the musical works are embodied.\8\ As discussed more below, the 
statute requires the public database to include various types of 
information, depending upon whether a musical work has been matched to 
a copyright owner.\9\ For both matched and unmatched works, the 
database must also include ``such other information'' ``as the Register 
of Copyrights may prescribe by regulation.'' \10\ The database must 
``be made available to members of the public in a searchable, online 
format, free of charge,'' \11\ as well as ``in a bulk, machine-readable 
format, through a widely available software application,'' to certain 
parties, including blanket licensees 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.'' \12\
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    \6\ H.R. Rep. No. 115-651, at 5-6; S. Rep. No. 115-339, at 5; 
Conf. Rep. at 4.
    \7\ 17 U.S.C. 115(d)(12)(A).
    \8\ See id. at 115(d)(3)(E), (e)(20).
    \9\ Id. at 115(d)(3)(E)(ii), (iii).
    \10\ Id. at 115(d)(3)(E)(ii)(V), (iii)(II).
    \11\ Id. at 115(d)(3)(E)(v).
    \12\ Id.
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    In addition, the legislative history contemplates that the Office 
will ``thoroughly review[ ]'' \13\ policies and procedures established 
by the MLC and its three committees, of which the MLC is statutorily 
bound to ensure are ``transparent and accountable,'' \14\ 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.'' \15\

[[Page 58171]]

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.'' 
\16\ Legislative history further 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.'' \17\ Accordingly, in designating the 
MLC, 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.'' \18\ Finally, as detailed in the 
Office's prior notification, while the MMA envisions the Office 
reasonably and prudently exercising regulatory authority to facilitate 
appropriate transparency of the collective and the public musical works 
database, the statutory language as well as the collective's structure 
separately include aspects to promote disclosure absent additional 
regulation.\19\
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    \13\ 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.
    \14\ 17 U.S.C. 115(d)(3)(D)(ix)(I)(aa).
    \15\ H.R. Rep. No. 115-651, at 5-6, 14; S. Rep. No. 115-339, at 
5, 15; Conf. Rep. at 4, 12. See also SoundExchange Initial September 
NOI Comment at 15; Future of Music Coalition (``FMC'') Reply 
September NOI Comment at 3 (appreciating ``SoundExchange's warning 
against too-detailed regulatory language,'' but ``urg[ing] the 
Office to balance this concern for pragmatism and flexibility 
against the need to provide as much clear guidance and oversight as 
possible to encourage trust'').
    \16\ H.R. Rep. No. 115-651, at 14; S. Rep. No. 115-339, at 15; 
Conf. Rep. at 12.
    \17\ H.R. Rep. No. 115-651, at 14; S. Rep. No. 115-339, at 15; 
Conf. Rep. at 12.
    \18\ 84 FR at 32280.
    \19\ See 85 FR 22568, 22570-71 (Apr. 22, 2020) (detailing 
various ways the statute promotes transparency of the mechanical 
licensing collective, such as by requiring the collective to publish 
an annual report, make its bylaws publicly available and its 
policies and practices ``transparent and accountable,'' identify a 
point of contact for publisher inquiries and complaints with timely 
redress, establish an anti-comingling policy for funds collected and 
those not collected under section 115, and submit itself to a public 
audit every five years; the statute also permits copyright owners to 
audit the collective to verify the accuracy of royalty payments, and 
establishes a five-year designation process for the Office to 
periodically review the mechanical licensing collective's 
performance).
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B. Rulemaking Background

    Against that backdrop, on September 24, 2019, the Office issued a 
notification of inquiry (``September NOI'') seeking public input on a 
variety of aspects related to implementation of title I of the MMA, 
including issues that should be considered regarding information to be 
included in the public musical works database (e.g., which specific 
additional categories of information might be appropriate to include by 
regulation), as well as the usability, interoperability, and usage 
restrictions of the database (e.g., technical or other specific 
language that might be helpful to consider in promulgating 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).\20\ In addition, the September NOI sought 
public comment on any issues that should be considered relating to the 
general oversight of the MLC.\21\
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    \20\ 84 FR 49966, 49972 (Sept. 24, 2019).
    \21\ Id. at 49973. All rulemaking activity, including public 
comments, as well as educational material regarding the Music 
Modernization Act, can currently be accessed via navigation from 
https://www.copyright.gov/music-modernization/. Specifically, 
comments received in response to the September 2019 notification of 
inquiry are available at https://www.regulations.gov/docketBrowser?rpp=25&po=0&dct=PS&D=COLC-2019-0002&refD=COLC-2019-0002-0001, and comments received in response to the April 2020 
notification of inquiry are available at https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=0&dct=PS&D=COLC-2020-0006. Guidelines for ex parte communications, 
along with records of such communications, are available at https://www.copyright.gov/rulemaking/mma-implementation/ex-parte-communications.html. The Office encourages, although does not 
require, parties to refrain from requesting ex parte meetings on 
this notice of proposed rulemaking until they have submitted written 
comments. As stated in the guidelines, ex parte meetings with the 
Office are intended to provide an opportunity for participants to 
clarify evidence and/or arguments made in prior written submissions, 
and to respond to questions from the Office on those matters. 
References to these comments are by party name (abbreviated where 
appropriate), followed by ``Initial September NOI Comment,'' ``Reply 
September NOI Comment,'' ``April NOI Comment,'' ``Letter,'' or ``Ex 
Parte Letter,'' as appropriate.
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    In response, many commenters emphasized the importance of 
transparency of the public database and the MLC's operations,\22\ and 
urged the Office to exercise ``expansive'' \23\ and ``robust'' \24\ 
oversight. Given these comments, on April 22, 2020, the Office issued a 
second notification of inquiry seeking further comment on information 
to be included in the public musical works database, usability, 
interoperability, and usage restrictions of the database, and 
transparency and general oversight of the MLC (``April NOI'').\25\
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    \22\ See Music Artists Coalition (``MAC'') Initial September NOI 
Comment at 2 (indicating ``the need for more transparency'' 
regarding the MLC's structure); Music Innovation Consumers (``MIC'') 
Coalition Initial September NOI Comment at 3 (``All stakeholders in 
the music marketplace benefit when current and accurate information 
about copyright ownership is easily accessible.''); Screen Composers 
Guild of Canada (``SCGC'') Reply Comment at 2, U.S. Copyright Office 
Dkt. No. 2018-11, available at https://www.regulations.gov/docketBrowser?rpp=25&po=0&dct=PS&D=COLC-2018-0011&refD=COLC-2018-0011-0001 (``We urge you to make the choice that gives us 
transparency in the administration and oversight of our creative 
works, and a fair chance at proper compensation for those works, now 
and in the future.''); Iconic Artists LLC Initial Comment at 2, U.S. 
Copyright Office Dkt. No. 2018-11, available at https://www.regulations.gov/docketBrowser?rpp=25&po=0&dct=PS&D=COLC-2018-0011&refD=COLC-2018-0011-0001 (``In the current paradigm there is a 
need for greater transparency and accuracy in reporting.''); DLC 
Reply September NOI Comment at 28 (noting that ``transparency will 
be critical to ensuring that the MLC fulfills its duties in a fair 
and efficient manner'').
    \23\ Songwriters Guild of America, Inc. (``SGA'') Initial 
September NOI Comment at 6.
    \24\ FMC Reply September NOI Comment at 2. See also Recording 
Academy Initial September NOI Comment at 4; Lowery Reply September 
NOI Comment at 2.
    \25\ 85 FR at 22568. The Office disagreed with the MLC that 
regulations regarding issues related to transparency ``may be 
premature'' because the MLC's ``policies and procedures are still 
being developed''--including because the statute directs the Office 
to promulgate regulations concerning contents of the public 
database. Id. at 22570; 17 U.S.C. 115(d)(3)(E)(ii)(V), (iii)(II); 
MLC Initial September NOI Comment at 30-31.
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    Having reviewed and considered all relevant comments received in 
response to both notifications of inquiry, and having engaged in ex 
parte communications with commenters, the Office issues a proposed rule 
regarding the categories of information to be included in the public 
musical works database, as well as the usability, interoperability, and 
usage restrictions of the database. The Office is also proposing 
regulations concerning its general regulatory authority related to 
ensuring appropriate transparency of the mechanical licensing 
collective itself. Commenters are reminded that while the Office's 
regulatory authority is relatively broad, it is obviously constrained 
by the law Congress enacted.\26\ As previously noted, given the start-
up nature of the collective, after reviewing the comments received in 
response to this proposed rule the Office will consider whether 
fashioning an interim rule, rather than a final rule, may be best-
suited to ensure a sufficiently responsive and flexible regulatory 
structure.\27\ Where appropriate, the proposed rule is intended to 
grant the MLC flexibility in various ways instead of adopting certain 
oversight suggestions that may prove overly burdensome as it prepares 
for the license availability date. For example, and as discussed below, 
the proposed rule grants the MLC flexibility in the following ways:
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    \26\ 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 4, 
12.
    \27\ 85 FR at 22571.
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     Flexibility to label fields in the public database, as 
long as the labeling

[[Page 58172]]

considers industry practice and reduces the likelihood of user 
confusion.
     Flexibility not to include information regarding 
terminations, performing rights organization (``PRO'') affiliation, and 
DDEX Party Identifier (DPID) in the public database.
     Flexibility to allow songwriters, or their 
representatives, to have songwriter information listed anonymously or 
pseudonymously.
     Flexibility as to the most appropriate method for 
archiving and maintaining historical data to track ownership and other 
information changes in the public database.
     Flexibility as to the most appropriate method for 
displaying data provenance information in the public database.
     Flexibility on the precise disclaimer language used in the 
public database to alert users that the database is not an 
authoritative source for sound recording information.
     Flexibility to include information in the public database 
that is not specifically identified by the statute but the MLC finds 
useful (but would not have serious privacy or identity theft risks to 
individuals or entities).
     Flexibility to develop reasonable terms of use for the 
public database, including restrictions on use.
     Flexibility to block third parties from bulk access to the 
public database after attempts to bypass marginal cost recovery or 
where persons have engaged in other unlawful activity with respect to 
the database.
     Flexibility regarding the initial format in which the MLC 
provides bulk access to the public database.
    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. The Office welcomes parties to file joint comments on issues 
of common agreement and consensus. While all public comments are 
welcome, should parties disagree with aspects of the proposed rule, the 
Office encourages parties to provide specific proposed changes to 
regulatory language for the Office to consider.

II. Proposed Rule

A. Categories of Information in the Public Musical Works Database

    As noted above, the MLC must 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,\28\ a 
function expected to provide transparency across the music 
industry.\29\ While the mechanical licensing collective must 
``establish and maintain a database containing information relating to 
musical works,'' \30\ the statute and legislative history emphasize 
that the database is meant to benefit the music industry overall and is 
not ``owned'' by the collective itself.\31\ Under the statute, if the 
Copyright Office designates a new entity to be the mechanical licensing 
collective, the Office must ``adopt regulations to govern the transfer 
of licenses, funds, records, data, and administrative responsibilities 
from the existing mechanical licensing collective to the new entity.'' 
\32\ The legislative history highlights the intent of the public 
database--providing access to musical works ownership information and 
promoting transparency across the music industry \33\--and 
distinguishes it from past attempts to control and/or own industry 
data.\34\ Accordingly, the MLC ``agrees that the data in the public MLC 
musical works database is not owned by the MLC or its vendor,'' and 
that ``data in this database will be accessible to the public at no 
cost, and bulk machine-readable copies of the data in the database will 
be available to the public, either for free or at marginal cost, 
pursuant to the MMA.'' \35\
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    \28\ 17 U.S.C. 115(d)(3)(E), (e)(20).
    \29\ See The MLC, Transparency, https://themlc.com/faqs/categories/transparency (last visited Sept. 1, 2020) (noting that 
the MLC will ``promote transparency'' by ``[p]roviding unprecedented 
access to musical works ownership information through a public 
database'').
    \30\ 17 U.S.C. 115(d)(3)(E)(i).
    \31\ See Castle April NOI Comment at 1 (``The musical works 
database does not belong to the MLC or The MLC and if there is any 
confusion about that, it should be cleared up right away.''). Any 
use by the Office referring to the public database as ``the MLC's 
database'' or ``its database'' was meant to refer to the creation 
and maintenance of the database, not ownership.
    \32\ 17 U.S.C. 115(d)(3)(B)(ii)(II) (emphasis added).
    \33\ See 164 Cong. Rec. S6292, 6293 (daily ed. Sept. 25, 2018) 
(statement of Sen. Hatch) (``I need to thank Chairman Grassley, who 
shepherded this bill through the committee and made important 
contributions to the bill's oversight and transparency 
provisions.''); 164 Cong. Rec. S 501, 504 (daily ed. Jan. 24, 2018) 
(statement of Sen. Coons) (``This important piece of legislation 
will bring much-needed transparency and efficiency to the music 
marketplace.''); 164 Cong. Rec. H3522, 3541 (daily ed. Apr. 25, 
2018) (statement of Rep. Steve Chabot); 164 Cong. Rec. H3522 at 3542 
(daily ed. Apr. 25, 2018) (statement of Rep. Norma Torres).
    \34\ Conf. Rep. at 6 (``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.''); id. 
(noting that the Global Repertoire Database project, an EU-initiated 
attempt to create a comprehensive and authoritative database for 
ownership and administration of musical works, ``ended without 
success due to cost and data ownership issues'').
    \35\ MLC Ex Parte Letter Aug. 21, 2020 (``MLC Ex Parte Letter 
#7'') at 2. The MLC also confirmed that ``the musical work and sound 
recording data used by the MLC to allocate royalties to copyright 
owners will be the same musical work and sound recording data that 
is made available in the public database.'' Id. at 3-4. See Music 
Reports April NOI Comment at 2.
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    For musical works that have been matched (i.e., the copyright owner 
of such work (or share thereof) has been identified and located), the 
statute requires the public database to include:

    1. The title of the musical work;
    2. The copyright owner of the musical 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,\36\ sound recording copyright 
owner, producer, ISRC, and other information commonly used to assist 
in associating sound recordings with musical works.\37\
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    \36\ The Alliance for Recorded Music (``ARM'') asks that ``the 
MLC be required to label [the featured artist field] . . . using the 
phrase `primary artist,' '' because `` `primary artist' is the 
preferred term as `featured artist' is easily confused with the term 
`featured' on another artist's recording, as in Artist X feat. 
Artist Y.'' ARM April NOI Comment at 6. Because this is a statutory 
term and the Office wishes to afford the MLC some flexibility in 
labeling the public database, it tentatively declines this request. 
The proposed rule does, however, require the MLC to consider 
industry practices when labeling fields in the public database to 
reduce the likelihood of user confusion.
    \37\ 17 U.S.C. 115(d)(3)(E)(ii).

    For unmatched musical works, the statute requires the database to 
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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 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.\38\
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    \38\ Id. at 115(d)(3)(E)(iii).

    For both matched and unmatched works, the public database must also 
include ``such other information'' ``as the Register of Copyrights may 
prescribe by regulation.'' \39\ The ``Register shall use its judgement 
to determine what is

[[Page 58173]]

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.'' \40\
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    \39\ Id. at 115(d)(3)(E)(ii)(V), (iii)(II).
    \40\ Conf. Rep. at 7.
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    As noted in the April NOI, in considering whether to prescribe the 
inclusion of additional fields beyond those statutorily required, the 
Office has focused on fields that advance the goal of the public 
database: Reducing the number of unmatched musical works by accurately 
identifying musical work copyright owners so they can be paid what they 
are owed by digital music providers (``DMPs'') operating under the 
section 115 statutory license.\41\ At the same time, the Office is 
mindful of the MLC's corresponding duties to keep confidential business 
and personal information secure and inaccessible; for example, data 
related to computation of market share is contemplated by the statue as 
sensitive and confidential.\42\ Recognizing that a robust musical works 
database may contain many fields of information, the proposed rule may 
be most valuable in establishing a floor of required information that 
users can reliably expect to access in the public database, while 
providing the MLC with flexibility to include additional data fields 
that it finds helpful.\43\ Both notifications of inquiry asked which 
specific additional categories of information, if any, should be 
required for inclusion in the public database, and stakeholder 
comments, generally seeking inclusion of additional information, are 
discussed by category below.\44\
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    \41\ 85 FR at 22573. See Conf. Rep. at 7 (noting that the 
``highest responsibility'' of the MLC includes ``efforts to identify 
the musical works embodied in particular sound recordings,'' 
``identify[ing] and locat[ing] the copyright owners of such works so 
that [the MLC] can update the database as appropriate,'' and 
``efficient and accurate collection and distribution of 
royalties'').
    \42\ 17 U.S.C. 115(d)(3)(J)(i)(II)(bb). See MLC Initial 
September NOI Comment at 24 (contending that not all information 
contained in its database ``would be appropriate for public 
disclosure,'' and that it ``should be permitted to exercise 
reasonable judgment in determining what information beyond what is 
statutorily required should be made available to the public'').
    \43\ See 85 FR 22549 (Apr. 22, 2020) (proposing a floor of 
categories of information to be required in periodic reporting to 
copyright owners, but noting that the MLC expects to include 
additional information); U.S. Copyright Office, Interim Rule, 
Royalty Reporting and Distribution Obligations of the Mechanical 
Licensing Collective, Dkt. No. 2020-6, published elsewhere in this 
issue of the Federal Register.
    \44\ 84 FR at 49972; 85 FR at 22573. See, e.g., SoundExchange 
Initial September NOI Comment at 6 (``[T]he data fields recited in 
the statute should be viewed as a minimal and vaguely described set 
of data for understanding rights with respect to a musical work in a 
crowded field where there are many millions of relevant works with 
similar titles in different languages and complicated ownership 
structures to understand and communicate.'').
---------------------------------------------------------------------------

1. Songwriter or Composer
    Commenters overwhelmingly agreed with the Office's tentative 
conclusion that the database should include songwriter and composer 
information,\45\ including the MLC.\46\ The proposed rule requires the 
MLC to include songwriter and composer information in the public 
database, to the extent reasonably available to the collective.\47\ In 
response to a concern raised about songwriters potentially wanting to 
mask their identity to avoid being associated with certain musical 
works, the proposed rule grants the MLC discretion to allow 
songwriters, or their representatives, the option of having songwriter 
information listed anonymously or pseudonymously.\48\
---------------------------------------------------------------------------

    \45\ See SGA Initial September NOI Comment at 2 (``While the 
names of copyright owners and administrators associated with a 
musical work may change on a constant basis, and other variables and 
data points are subject to frequent adjustment, the title and the 
names of the creators never vary from the date of a work's creation 
forward.''); The International Confederation of Societies of Authors 
and Composers (``CISAC'') & the International Organisation 
representing Mechanical Rights Societies (``BIEM'') April NOI 
Comment at 2; Songwriters of North America (``SONA'') April NOI 
Comment at 2; DLC April NOI Comment at 4 n.19; see also Barker 
Initial September NOI Comment at 2; FMC Reply September NOI Comment 
at 2; DLC Reply September NOI Comment at 26.
    \46\ MLC April NOI Comment at 9 (agreeing with inclusion of 
songwriter information for musical works); MLC Reply September NOI 
Comment at 32 (same).
    \47\ Because the statute's definition of ``songwriter'' includes 
composers, the proposed rule uses the term ``songwriter'' to include 
both songwriters and composers. 17 U.S.C. 115(e)(32). To reduce the 
likelihood of confusion, the MLC may want to consider labeling this 
field ``Songwriter or Composer'' in the public database. Following 
the statutory language, the proposed rule requires the MLC to 
include the songwriter field in the public database, and the other 
fields discussed below, ``to the extent reasonably available to the 
mechanical licensing collective.'' See id. at 115(d)(3)(E)(ii)(IV), 
(iii)(I). See also U.S. Copyright Office, Interim Rule, Royalty 
Reporting and Distribution Obligations of the Mechanical Licensing 
Collective, Dkt. No. 2020-6, published elsewhere in this issue of 
the Federal Register (requiring the MLC to report certain types of 
information to copyright owners ``known to the MLC'').
    \48\ See Kernen NPRM Comment at 1, U.S. Copyright Office Dkt. 
No. 2020-7, available at https://beta.regulations.gov/document/COLC-2020-0004-0001.
---------------------------------------------------------------------------

2. Studio Producer
    As the statute requires the public database to include 
``producer,'' to the extent reasonably available to the MLC,\49\ so 
does the proposed rule. Initially, there appeared to be stakeholder 
disagreement about the meaning of the term ``producer,'' which has 
since been resolved to clarify that ``producer'' refers to the studio 
producer.\50\ Because the term ``producer'' relates not only to the 
public database, but also to information provided by digital music 
providers in reports of usage, the Office included an overarching 
definition of ``producer'' in its interim rule concerning reports of 
usage, notices of license, and data collection efforts, among other 
things, that applies throughout its section 115 regulations to define 
``producer'' as the studio producer.\51\
---------------------------------------------------------------------------

    \49\ 17 U.S.C. 115(d)(3)(E)(ii)(IV), (iii)(I)(dd). See MLC April 
NOI Comment at 9 (stating that it ``is willing to include producer 
information in the public database to the extent the Office requires 
it be reported from DMPs''). The Office notes that the statute 
requires digital music providers to report ``producer'' to the 
mechanical licensing collective. 17 U.S.C. 115(d)(3)(E)(ii)(IV), 
(iii)(I)(dd). See also U.S. Copyright Office, Interim Rule, Music 
Modernization Act Notices of License, Notices of Nonblanket 
Activity, Data Collection and Delivery Efforts, and Reports of Usage 
and Payment, Dkt. No. 2020-5, published elsewhere in this issue of 
the Federal Register.
    \50\ See MLC Initial September NOI Comment at 13 n.6 (originally 
believing that ``producer'' referred to ``the record label or 
individual or entity that commissioned the sound recording''); 
Recording Academy Initial September NOI Comment at 3 (urging Office 
to ``clarify that a producer is someone who was part of the creative 
process that created a sound recording''); Recording Industry 
Association of America, Inc. (``RIAA'') Initial September NOI 
Comment at 11 (stating ``producer'' should be defined as ``the 
primary person(s) contracted by and accountable to the content owner 
for the task of delivering the recording as a finished product''); 
MLC Reply September NOI Comment at 35 (updating its understanding).
    \51\ See U.S. Copyright Office, Interim Rule, Music 
Modernization Act Notices of License, Notices of Nonblanket 
Activity, Data Collection and Delivery Efforts, and Reports of Usage 
and Payment, Dkt. No. 2020-5, published elsewhere in this issue of 
the Federal Register.
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3. Unique Identifiers
    As noted above, the statute requires the MLC to include ISRC and 
ISWC codes, when reasonably available.\52\ According to the legislative 
history, ``[u]sing standardized metadata such as ISRC and ISWC codes, 
is a major step forward in reducing the number of unmatched works.'' 
\53\
---------------------------------------------------------------------------

    \52\ 17 U.S.C. 115(d)(3)(E)(ii)-(iii).
    \53\ Conf. Rep. at 7. The legislative history also notes that 
``the Register may at some point wish to consider after an 
appropriate rulemaking whether standardized identifiers for 
individuals would be appropriate, or even audio fingerprints.'' Id.
---------------------------------------------------------------------------

    In response to the September NOI, the DLC proposed including the 
Interested Parties Information (IPI) \54\ or

[[Page 58174]]

International Standard Name Identifier (``ISNI''),\55\ to the extent 
reasonably available to the MLC.\56\ SoundExchange asserted that the 
``CWR standard contemplates a much richer set of information about 
`interested parties' linked to CISAC's Interested Party Information 
(`IPI') system, including information about songwriters and publishers 
at various levels,'' and so the database ``should include and make 
available a full set of information about interested parties involved 
in the creation and administration of the musical work, including 
shares and identifiers.'' \57\ For its part, the MLC stated that it 
plans to include IPI and ISNI in the public database (but should not be 
required to do so through regulation),\58\ and create its own 
proprietary identifier for each musical work in the database.\59\
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    \54\ IPI is ``[a] unique identifier assigned to rights holders 
with an interest in an artistic work, including natural persons or 
legal entities, made known to the IPI Centre. The IPI System is an 
international registry used by CISAC and BIEM societies.'' U.S. 
Copyright Office, Unclaimed Royalties Study Acronym Glossary, 
https://www.copyright.gov/policy/unclaimed-royalties/glossary.pdf.
    \55\ ISNI is ``[a] unique identifier for identifying the public 
identities of contributors to creative works, regardless their legal 
or natural status, and those active in their distribution. These may 
include researchers, inventors, writers, artists, visual creators, 
performers, producers, publishers, aggregators, and more. A 
different ISNI is assigned for each name used.'' U.S. Copyright 
Office, Unclaimed Royalties Study Acronym Glossary, https://www.copyright.gov/policy/unclaimed-royalties/glossary.pdf.
    \56\ DLC Initial September NOI Comment at 21; DLC Reply 
September NOI Comment Add. at A-16.
    \57\ SoundExchange Initial September NOI Comment at 8; see id. 
at 7-8 (``Reflecting all applicable unique identifiers in the MLC 
Database will allow users of the MLC Database readily to match 
records in the database to other databases when ISWC is not included 
in one or the other of the databases.'').
    \58\ MLC Reply September NOI Comment at 33.
    \59\ Id. at 34.
---------------------------------------------------------------------------

    In the subsequent April NOI, the Office sought public input on 
issues relating to the inclusion of unique identifiers for musical 
works in the public database, including whether regulations should 
require including IPI or ISNI, the MLC's own standard identifier, or 
any other specific additional standard identifiers reasonably available 
to the MLC.\60\ In response, multiple commenters agree that the public 
database should include IPI and/or ISNI.\61\ SONA also ``strongly 
encourage[d]'' the inclusion of Universal Product Code (``UPC'') 
because ``these codes are sometimes the only reliable way to identify 
the particular product for which royalties are being paid and thus 
ensure that royalties are correctly allocated.'' \62\ The MLC 
reiterated its plan to include IPI and ISNI, as well as ``other unique 
identifiers'' and ``any other third party proprietary identifiers . . . 
to the extent the MLC believes they will be helpful to copyright 
owners.'' \63\ As part of that effort, the MLC ``intend[s] to make 
available unique identifiers reported by the DMPs in the public 
database.'' \64\ The MLC does not, however, intend to include the UPC 
field ``in the initial versions of the portal or public database (which 
focus on providing the data needed for matching and claiming).'' \65\
---------------------------------------------------------------------------

    \60\ 85 FR at 22574.
    \61\ DLC April NOI Comment at 4 n.19; SONA April NOI Comment at 
4; CISAC & BIEM April NOI Comment at 2.
    \62\ SONA April NOI Comment at 5.
    \63\ MLC April NOI Comment at 9.
    \64\ MLC Ex Parte Letter #7 at 5.
    \65\ Id.
---------------------------------------------------------------------------

    The Office finds the comments regarding IPI and ISNI persuasive in 
light of the statute, and thus proposes to require the public database 
to include IPI and/or ISNI for each songwriter, publisher, and musical 
work copyright owner, as well as UPC,\66\ to the extent reasonably 
available to the MLC. The Office seeks public comment on whether IPIs 
and/or ISNIs for foreign collective management organizations (``CMOs'') 
should be required to be listed separately. Under the proposed rule, 
the public database must also include the MLC's standard identifier for 
the musical work, and to the extent reasonably available to the MLC, 
unique identifier(s) assigned by the blanket licensee, if reported by 
the blanket licensee.\67\
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    \66\ The Office notes that the MLC supports including the UPC 
field in royalty reports to copyright owners, and in reports of 
usage provided by DMPs to the MLC. See MLC Initial September NOI 
Comment at App. G; MLC NPRM Comment at App. C, U.S. Copyright Office 
Dkt. No. 2020-5, available at https://beta.regulations.gov/document/COLC-2020-0005-0001. In addition, the MLC has maintained it will use 
UPC in its matching efforts. See MLC Letter July 13, 2020 at 7 
(stating ``[a]ll of the metadata fields proposed in Sec.  
210.27(e)(1) will be used as part of the MLC's matching efforts''); 
see also 85 FR 22518, 22541 (Apr. 22, 2020) (UPC proposed in Sec.  
210.27(e)(1)).
    \67\ See U.S. Copyright Office, Interim Rule, Music 
Modernization Act Notices of License, Notices of Nonblanket 
Activity, Data Collection and Delivery Efforts, and Reports of Usage 
and Payment, Dkt. No. 2020-5, published elsewhere in this issue of 
the Federal Register; U.S. Copyright Office, Interim Rule, Royalty 
Reporting and Distribution Obligations of the Mechanical Licensing 
Collective, Dkt. No. 2020-6, published elsewhere in this issue of 
the Federal Register.
---------------------------------------------------------------------------

4. Information Related to Ownership and Control of Musical Works
    By statute, the database must include information regarding the 
ownership of the musical work as well as the underlying sound 
recording, including ``the copyright owner of the work (or share 
thereof), and the ownership percentage of that owner,'' or, if 
unmatched, ``the ownership percentage for which an owner has not been 
identified.'' \68\ The statute also requires a field called ``sound 
recording copyright owner,'' the meaning of which is discussed further 
below.
---------------------------------------------------------------------------

    \68\ 17 U.S.C. 115(d)(3)(C)(E)(ii)-(iii). CISAC & BIEM contend 
that creators' percentage share should not be made publicly 
accessible in the database. CISAC & BIEM NPRM Comment at 2, U.S. 
Copyright Office Dkt. No. 2020-7, available at https://beta.regulations.gov/document/COLC-2020-0004-0001. The statute, 
however, specifically contemplates such information being made 
publicly available in the database. 17 U.S.C. 115(d)(3)(C)(E)(ii)-
(iii).
---------------------------------------------------------------------------

    Although the MMA does not specifically call out music publishing 
administrators, that is, entities responsible for managing copyrights 
on behalf of songwriters, including administering, licensing, and 
collecting publishing royalties without receiving an ownership interest 
in such copyrights, a number of commenters urge inclusion of this 
information in the public musical works database.\69\ As one publisher 
suggests, because ``[t]he copyright owner may not necessarily be the 
entity authorized to control, license, or collect royalties for the 
musical work,'' the public database should include information 
identifying the administrators or authorized entities who license or 
collect on the behalf of musical work copyright owners.\70\ He also 
proposed that because ``a copyright owner's `ownership' percentage may 
differ from that same owner's `control' percentage,'' the public 
database should include separate fields for ``control'' versus 
``ownership'' percentage.\71\ The MLC agrees with that approach,\72\ 
stating that ``the database should include information identifying the 
administrators or authorized entities who license the relevant musical 
work and/or collect royalties for such work on behalf of the copyright 
owner.'' \73\
---------------------------------------------------------------------------

    \69\ DLC Reply September NOI Comment Add. at A-16 (urging 
inclusion of ``all additional entities involved with the licensing 
or ownership of the musical work, including publishing 
administrators and aggregators, publishers and sub-publishers, and 
any entities designated to receive license notices, reporting, and/
or royalty payment on the copyright owners' behalf''); ARM April NOI 
Comment at 2 (agreeing that ``information related to all persons or 
entities that own or control the right to license and/or collect 
royalties related to musical works in the United States should be 
included''). See also FMC April NOI Comment at 2; SONA April NOI 
Comment at 5-6; SoundExchange Initial September NOI Comment at 8 
(observing that ``[c]ommercialization of musical works often 
involves chains of publishing, sub-publishing and administration 
agreements that determine who is entitled to be paid for use of a 
work,'' and that the CWR standard contemplates gathering this 
information, such that the MLC database should also collect and make 
available this information).
    \70\ Barker Initial September NOI Comment at 2.
    \71\ Id. at 3.
    \72\ MLC Reply September NOI Comment at 32 n.16.
    \73\ MLC April NOI Comment at 9.
---------------------------------------------------------------------------

    In addition, with respect to specific ownership percentages, which 
are required by statute to be made publicly

[[Page 58175]]

available, SoundExchange raises the question of how the database should 
best address ``the frequent situation (particularly with new works) 
where the various co-authors and their publishers have, at a particular 
moment in time, collectively claimed more or less than 100% of a 
work.'' \74\ Noting that it may be difficult for the MLC to withhold 
information regarding the musical work until shares equal 100% (the 
practice of other systems), it suggests the MLC ``make available 
information concerning the shares claimed even when they total more 
than 100% (frequently referred to as an `overclaim') or less than 100% 
(frequently referred to as an `underclaim').'' \75\ In response, the 
MLC stated that it ``intends to mark overclaims as such and show the 
percentages and total of all shares claimed so that overclaims and 
underclaims will be transparent.'' \76\
---------------------------------------------------------------------------

    \74\ SoundExchange Initial September NOI Comment at 8.
    \75\ Id. at 9; see also id. at 15.
    \76\ MLC Ex Parte Letter #7 at 5.
---------------------------------------------------------------------------

    Relatedly, CISAC & BIEM raise concerns about needing ``to clarify 
the concept of `copyright owner,' '' as ``foreign collective management 
organizations (CMOs) . . . are also considered copyright owners or 
exclusively mandated organizations of the musical works administered by 
these entities,'' and thus ``CMOs represented by CISAC and BIEM should 
be able to register in the MLC database the claim percentages they 
represent.'' \77\ While the MMA does not reference foreign musical 
works specifically, nothing in the statute indicates that foreign 
copyright owners should be treated differently from U.S. copyright 
owners under the blanket licensing regime, or prevents the MLC from 
seeking or including data from foreign CMOs in building the public 
database.\78\ Where copyright ownership has been assigned or otherwise 
transferred to a foreign CMO or, conversely, a U.S. sub-publisher, the 
statute does not specify that it should be treated differently from a 
similarly-situated U.S. entity that has been assigned or otherwise been 
transferred copyright ownership.\79\ The MLC has maintained that it 
will ``engage in non-discriminatory treatment towards domestic and 
foreign copyright owners, CMOs and administrators,'' \80\ and that it 
``intends to operate on a non-discriminatory basis, and all natural and 
legal persons or entities of any nationality are welcome to register 
their claims to works with the MLC.'' \81\ In addition, the MLC appears 
to be planning for data collection from foreign CMOs, as evidenced by 
the creation of its Data Quality Initiative (DQI), which ``provide[s] a 
streamlined way for music publishers, administrators and foreign 
collective management organizations (CMOs) to compare large schedules 
of their musical works' data against The MLC's data . . . so that they 
can . . . improve the quality of The MLC's data.'' \82\ According to 
the MLC, the DQI ``does not act as a mechanism for delivering work 
registrations/works data,'' but ``[m]usic publishers, administrators 
and foreign CMOs may use [Common Works Registration] to deliver new and 
updated work registrations to The MLC.'' \83\
---------------------------------------------------------------------------

    \77\ CISAC & BIEM April NOI Comment at 1. See also Japanese 
Society for Rights of Authors, Composers and Publishers (``JASRAC'') 
Initial September NOI Comment at 2 (``[A]n effective and efficient 
claims process needs to be established for works that are not 
initially matched, which will allow foreign rights owners to claim 
works without significant burden.'').
    \78\ See 17 U.S.C. 115.
    \79\ See id. at 101 (defining ``copyright owner'' and ``transfer 
of copyright ownership''); id. at 115.
    \80\ MLC Ex Parte Letter #7 at 6.
    \81\ MLC Reply September NOI Comment at 44.
    \82\ The MLC, Play Your Part, https://themlc.com/play-your-part 
(last visited Sept. 1, 2020).
    \83\ The MLC, MLC Data Quality Initiative, https://themlc.com/sites/default/files/2020-08/2020%20-%20DQI%20One%20Pager%20Updated%208-18-20.pdf (last visited Sept. 1, 
2020).
---------------------------------------------------------------------------

    After considering the comments, the Office concludes that to the 
extent reasonably available to the MLC, it will be beneficial for the 
database to include information related to all persons or entities that 
own or control the right to license and collect royalties related to 
musical works in the United States, and that music publishing 
administrator and control information would be valuable additions. 
Accordingly, the proposed rule requires the public database to include 
administrator(s) or other authorized entity(ies) who license the 
musical work (or share thereof) and/or collect mechanical royalties for 
such musical work (or share thereof) in the United States. The proposed 
rule would not prevent the MLC from including additional information 
with respect to foreign CMOs. The Office solicits comments on the 
proposed language, including any specific suggestions for adjustment.
    With respect to the question SoundExchange raises regarding works 
that may reflect underclaiming and overclaiming of shares, the Office 
concludes that it may make sense for the MLC to retain flexibility to 
implement such a system as it apparently intends, and notes that the 
MLC's dispute resolution committee may be an appropriate forum to 
consider this issue further, as part of the committee's charge to 
establish policies and procedures related to resolution of disputes 
related to ownership interests in musical works.\84\ As noted above, 
the MLC ``intends to mark overclaims as such and show the percentages 
and total of all shares claimed so that overclaims and underclaims will 
be transparent.'' \85\
---------------------------------------------------------------------------

    \84\ 17 U.S.C. 115(d)(3)(K).
    \85\ MLC Ex Parte Letter #7 at 5.
---------------------------------------------------------------------------

5. Additional Information Related To Identifying Musical Works and 
Sound Recordings
    Commenters proposed that the public database include various other 
fields to identify the musical work at issue or the sound recording in 
which it is embodied. With respect to musical works, some commenters 
pointed to fields included in the existing Common Works Registration 
(``CWR'') format, and supported inclusion of information relating to 
alternate titles for musical works,\86\ whether the work utilizes 
samples and medleys of preexisting works,\87\ and opus and catalog 
numbers and instrumentation of classical compositions.\88\ With respect 
to sound recordings, commenters suggested inclusion of information 
relating to track duration, version, and release date of sound 
recording.\89\
---------------------------------------------------------------------------

    \86\ See RIAA Initial September NOI Comment at 8; MLC Reply 
September NOI Comment at 32; ARM April NOI Comment at 3; Recording 
Academy April NOI Comment at 3; see also SONA April NOI Comment at 
5-6 (contending that data supplied to the MLC via the CWR format for 
musical works should be in the public database).
    \87\ SoundExchange Initial September NOI Comment at 9; ARM April 
NOI Comment at 3.
    \88\ SoundExchange Initial September NOI Comment at 7; ARM April 
NOI Comment at 3.
    \89\ See MLC Reply September NOI Comment at 33, App. E (agreeing 
with inclusion of duration, version, and release year of the sound 
recording, to the extent available to the MLC); Recording Academy 
Initial September NOI Comment at 3 (noting such information would 
``help distinguish between songs that have been recorded and 
released under different titles or by different artists multiple 
times''); RIAA Initial September NOI Comment at 6-7 (same); 
Recording Academy April NOI Comment at 3 (stating database should 
include version titles, track duration, and release date); SONA 
April NOI Comment at 6 (contending track duration, version, and 
release date should be included in the database). ARM agrees that 
track duration, version, and release year should be in the database, 
but only if such data is obtained from an authoritative source. ARM 
April NOI Comment at 3. RIAA recommends revising the ``sound 
recording name'' field to ``sound recording track title,'' or in the 
alternative, ``sound recording name/sound recording track title.'' 
RIAA Initial September NOI Comment at 10-11.
---------------------------------------------------------------------------

    The MLC acknowledged the merits of including these fields proposed 
by commenters, recognizing ``CWR as the de facto industry standard used 
for registration of claims in musical works, and intends to use CWR as 
its primary mechanism for the bulk electronic

[[Page 58176]]

registration of musical works data.'' \90\ The MLC reported plans to 
include alternative titles of the musical work, and for sound 
recordings, the track duration, version, and release date,\91\ as well 
as additional fields ``reported to the mechanical licensing collective 
as may be useful for the identification of musical works that the 
mechanical licensing collective deems appropriate to publicly 
disclose.'' \92\ Regarding opus and catalog numbers for classical 
compositions, the MLC maintains that it ``is working with DDEX to 
determine if it is possible or appropriate to add Opus Number and 
(Composer) Catalogue Number to the data specifications.'' \93\ 
Regarding whether the work utilizes samples and medleys of preexisting 
works, the MLC contends that ``[b]ecause medleys and musical works that 
sample other musical works are unique derivative copyrighted works, 
each will be included in the database as a unique composition,'' and 
that such an approach addresses SoundExchange's concern because it will 
``treat[ ] each medley or work that incorporates a sample as a separate 
musical work, as to which ownership will be separately claimed and 
identified.'' \94\
---------------------------------------------------------------------------

    \90\ MLC Reply September NOI Comment at 38.
    \91\ Id. at App. E; MLC April NOI Comment at 10.
    \92\ MLC Reply September NOI Comment at App. E.
    \93\ MLC Ex Parte Letter #7 at 5.
    \94\ Id.
---------------------------------------------------------------------------

    Given the consensus of comments, the proposed rule requires the MLC 
to include the following fields in the public database, to the extent 
reasonably available to the MLC: Alternate titles for musical works, 
opus and catalog numbers of classical compositions, and track 
duration,\95\ version, and release date of sound recordings. The Office 
has issued an interim rule requiring digital music providers to report 
the actual playing time as measured from the sound recording file to 
the MLC,\96\ which the Office expects to be the value displayed in the 
public musical works database. Finally, the proposed rule mirrors the 
statute by requiring the public database to include, to the extent 
reasonably available to the mechanical licensing collective, other non-
confidential information commonly used to assist in associating sound 
recordings with musical works (for matched musical works), and for 
unmatched musical works, other non-confidential information commonly 
used to assist in associating sound recordings with musical works, and 
any additional non-confidential information reported to the mechanical 
licensing collective that may assist in identifying musical works.\97\
---------------------------------------------------------------------------

    \95\ The proposed rule uses the term ``playing time.'' See U.S. 
Copyright Office, Interim Rule, Music Modernization Act Notices of 
License, Notices of Nonblanket Activity, Data Collection and 
Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020-5, 
published elsewhere in this issue of the Federal Register.
    \96\ Id.
    \97\ 17 U.S.C. 115(d)(3)(E)(ii)(IV)(bb), (iii)(I)(dd)-(ee).
---------------------------------------------------------------------------

6. Performing Rights Organization Affiliation
    In response to the September NOI, a few commenters maintained that 
the public database should include performing rights organization 
(``PRO'') affiliation, with MIC Coalition asserting that ``[a]ny data 
solution must not only encompass mechanical rights, but also provide 
information regarding public performance rights, including PRO 
affiliation and splits of performance rights.'' \98\
---------------------------------------------------------------------------

    \98\ MIC Coalition Initial September NOI Comment at 2. See DLC 
Initial September NOI Comment at 20 (suggesting that including PRO 
affiliation ``will ensure that the [public] database is fully 
usable, including as a resource for direct licensing activities''); 
see also Barker Initial September NOI Comment at 8-9.
---------------------------------------------------------------------------

    By contrast, the MLC and FMC raised concerns about including and 
maintaining PRO affiliation in the public database.\99\ The largest 
PROs, The American Society of Composers, Authors, and Publishers 
(``ASCAP'') and Broadcast Music, Inc. (``BMI''), similarly objected 
that because ``music performing rights organizations such as BMI and 
ASCAP all have comprehensive databases on musical works ownership 
rights, and these databases are publicly available,'' so 
``administration of data with respect to the licensing of public 
performing rights does not require government intervention.'' \100\
---------------------------------------------------------------------------

    \99\ See MLC Reply September NOI Comment at 36 (pointing out 
that its ``primary responsibility is to engage in the administration 
of mechanical rights and to develop and maintain a mechanical rights 
database,'' and that ``gather[ing], maintain[ing], updat[ing] and 
includ[ing] . . . performance rights information--which rights it is 
not permitted to license--would require significant effort which 
could imperil [its] ability to meet its statutory obligations with 
respect to mechanical rights licensing and administration by the 
[license availability date]''); FMC Reply September NOI Comment at 3 
(``[I]t's difficult to see how including PRO information in the MLC 
database could work--as the MLC won't be paying PROs, it's hard to 
envision what would incentivize keeping this data accurate and 
authoritatively up to date.'').
    \100\ ASCAP & BMI Reply September NOI Comment at 2.
---------------------------------------------------------------------------

    After evaluating these comments, in the April NOI the Office 
tentatively concluded against requiring PRO affiliation in the public 
database, noting that ``[b]ecause the MMA explicitly restricts the MLC 
from licensing performance rights, it seems unlikely to be prudent or 
frugal to require the MLC to expend resources to maintain PRO 
affiliations for rights it is not permitted to license.'' \101\ In 
response, the DLC asked the Office to reconsider and include PRO 
affiliation in the public database.\102\ The MIC Coalition commented 
that ``[i]ncorporating PRO information into the musical works database 
. . . will foster a wide range of innovations in music licensing,'' 
\103\ and that the Office should not view ``the joint database proposed 
by ASCAP and BMI as a viable alternative to the one that's currently 
being developed by the MLC.'' \104\ But CISAC &, BEIM agree ``that 
there is no need for the MLC to include and maintain the PRO's 
performing right information in the database,'' \105\ and FMC finds the 
``Office's tentative conclusion against requiring the MLC to include 
PRO affiliation in its database is sound.'' \106\ For its part, the MLC 
contends that it ``should be afforded the opportunity to focus on its 
main priority of a robust and fulsome mechanical rights database,'' and 
not include PRO affiliation, but that ``[i]f, at some time in the 
future, the MLC has the capacity and resources to also incorporate 
performance rights information, it may undertake this task . . .'' 
\107\
---------------------------------------------------------------------------

    \101\ 85 FR at 22576; 17 U.S.C. 115(d)(3)(C)(iii) (limiting 
administration of voluntary licenses to ``only [the] reproduction or 
distribution rights in musical works for covered activities'').
    \102\ DLC April NOI Comment at 3-4.
    \103\ MIC Coalition April NOI Comment at 3.
    \104\ Id. at 2.
    \105\ CISAC & BIEM April NOI Comment at 3.
    \106\ FMC April NOI Comment at 2.
    \107\ MLC April NOI Comment at 10.
---------------------------------------------------------------------------

    Having considered these comments, the statutory text, and 
legislative history, the Office concludes that the mechanical licensing 
collective should not be required to include PRO affiliation in the 
public database.\108\ As previously noted by the Office, this 
conclusion does not inhibit PRO access or use of the database for their 
own efforts, and explicitly permits bulk access for a fee that does not 
exceed the MLC's marginal cost to provide such access; nor does it 
restrict the MLC from

[[Page 58177]]

optionally including such information.\109\
---------------------------------------------------------------------------

    \108\ In a related rulemaking, the Office has declined to 
require musical work copyright owners to provide information related 
to performing rights organization affiliation in connection with the 
statutory obligation to undertake commercially reasonably efforts to 
deliver sound recording information to the MLC. U.S. Copyright 
Office, Interim Rule, Music Modernization Act Notices of License, 
Notices of Nonblanket Activity, Data Collection and Delivery 
Efforts, and Reports of Usage and Payment, Dkt. No. 2020-5, 
published elsewhere in this issue of the Federal Register. See also 
17 U.S.C. 115(d)(3)(E)(iv).
    \109\ 17 U.S.C. 115(d)(3)(E)(v); 85 FR at 22576. See Barker 
Initial September NOI Comment at 9; SONA April NOI Comment at 6 
(``While SONA does not believe this data should be mandatory, we 
also do not think that the rule should prohibit a songwriter from 
publicly listing PRO affiliation if he or she believes that it could 
be important identifying information.'').
---------------------------------------------------------------------------

7. Historical Data
    In response to the September NOI, SoundExchange asserted that the 
public database should ``maintain and make available historical 
interested party information so it is possible to know who is entitled 
to collect payments for shares of a work both currently and at any 
point in the past.'' \110\ The DLC also proposed that the public 
database include ``information regarding each entity in the chain of 
copyright owners and their agents for a particular musical work'' as 
well as ``relational connections between each of these entities for a 
particular musical work.'' \111\ The MLC sought clarity about the DLC's 
specific proposal, suggesting ``[i]t is unclear whether the DLC . . . 
is referring to the entire historical chain of title for each musical 
work. If so, the MLC objects that ``such information is voluminous, 
burdensome to provide and maintain, and in this context unnecessary and 
must not be required.'' \112\ The MLC stated, however, that it intends 
to maintain information in its database about ``each and every entity 
that, at any given point in time, owns a share of the right to receive 
mechanical royalties for the use of a musical work in covered 
activities.'' \113\ After considering these comments, the Copyright 
Office tentatively agreed with the MLC's approach to focus on current 
relationships, but welcomed further public input and noted that it did 
not envision language prohibiting the MLC from providing such 
historical information.\114\
---------------------------------------------------------------------------

    \110\ SoundExchange Initial September NOI Comment at 10.
    \111\ DLC Initial September NOI Comment at 20.
    \112\ MLC Reply September NOI Comment at 34.
    \113\ Id.
    \114\ 85 FR at 22576.
---------------------------------------------------------------------------

    In response to the April NOI, SoundExchange reiterated its request 
for the public database to include historical information, 
acknowledging that it ``seems reasonable'' for the MLC not to ``go out 
of its way to collect information about entitlement to payment for 
times before the license availability date,'' but discouraging an 
approach where ``the MLC may discard or not make publicly available 
information about entitlement to payment that . . . applies to times 
after the license availability date, . . . [because] in some cases 
(such as where a service provider makes a significantly late payment or 
distribution is delayed because the copyright owners have not agreed 
among themselves concerning ownership shares) the MLC may not be able 
to distribute royalties until long after the usage occurred.'' \115\ 
CISAC & BIEM, FMC, and SONA agree that historical ownership information 
should be in the public database, noting that ownership of musical 
works changes over time.\116\
---------------------------------------------------------------------------

    \115\ SoundExchange April NOI Comment at 4 (emphasis added). See 
id. at 4-5 (``To pay the proper payee for the time when usage 
occurred, the MLC will need to know who is entitled to receive 
royalty payments for all times after the license availability 
date.'').
    \116\ CISAC & BIEM April NOI Comment at 3; FMC April NOI Comment 
at 2; SONA April NOI Comment at 9.
---------------------------------------------------------------------------

    For its part, the MLC reaffirmed its intention to ``maintain 
information about each and every entity that, at any given point in 
time, owns a share of the right to receive mechanical royalties for the 
use of a musical work in covered activities,'' and to ``maintain at 
regular intervals historical records of the information contained in 
the database.'' \117\ The MLC also clarified that it ``will maintain an 
archive of data provided to it after the license availability date 
(`LAD') and that has subsequently been updated or revised (e.g., where 
there is a post-LAD change in ownership of a share of a musical work), 
and the MLC will make this historic information available to the 
public.'' \118\ The MLC contends that ``it should be permitted to 
determine, in consultation with its vendors, the best method for 
maintaining and archiving historical data to track ownership and other 
information changes in its database.'' \119\
---------------------------------------------------------------------------

    \117\ MLC April NOI Comment at 12.
    \118\ MLC Ex Parte Letter #7 at 4.
    \119\ MLC April NOI Comment at 12.
---------------------------------------------------------------------------

    Having carefully considered this issue, the Office proposes that 
the MLC shall maintain at regular intervals historical records of the 
information contained in the public musical works database, including a 
record of changes to such database information and changes to the 
source of information in database fields, in order to allow tracking of 
changes to the ownership of musical works in the database over time. 
The proposed rule adopts the MLC's request for flexibility as to the 
most appropriate method for archiving and maintaining such historical 
data to track ownership and other information changes in the database. 
As previously noted by the Office, the MLC must maintain all material 
records of the operations of the mechanical licensing collective in a 
secure and reliable manner, and such information will also be subject 
to audit.\120\
---------------------------------------------------------------------------

    \120\ 85 FR at 22576; 17 U.S.C. 115(d)(3)(M)(i); id. at 
115(d)(3)(D)(ix)(II)(aa).
---------------------------------------------------------------------------

8. Terminations
    Title 17 allows, under certain circumstances, authors or their 
heirs to terminate an agreement that previously granted one or more of 
the author's exclusive rights to a third party.\121\ In response to the 
September NOI, one commenter suggested that to the extent terminations 
of musical work grants have occurred, the public database should 
include ``separate iterations of musical works with their respective 
copyright owners and other related information, as well as the 
appropriately matched recording uses for each iteration of the musical 
work, and to make clear to the public and users of the database the 
appropriate version eligible for future licenses.'' \122\ Separately, 
as addressed in a parallel rulemaking, the MLC asked that the Office 
require digital music providers to include server fixation dates for 
sound recordings, contending that this information will be helpful to 
its determination whether particular usage of musical works is affected 
by the termination of grants under this statutory provision.\123\ The 
DLC objected to this request.\124\
---------------------------------------------------------------------------

    \121\ 17 U.S.C. 203, 304(c), 304(d).
    \122\ Barker Initial September NOI Comment at 4.
    \123\ MLC Reply September NOI Comment at 19, App. at 10; see 
also 85 FR at 22532-33.
    \124\ DLC Ex Parte Letter Feb. 14, 2020 (``DLC Ex Parte Letter 
#1'') at 3; DLC Ex Parte Letter #1 Presentation at 15; DLC Ex Parte 
Letter Feb. 24, 2020 at 4; DLC Ex Parte Letter Mar. 4, 2020 at 5.
---------------------------------------------------------------------------

    In the April NOI, the Office sought public input on issues that 
should be considered relating to whether termination information should 
be included in the public database.\125\ The DLC, SGA, and SONA support 
including information concerning the termination of grants of rights by 
copyright creators in the public database.\126\ By contrast, the MLC 
contends that it ``should not be required to include in the public 
database information regarding statutory termination of musical works 
per se.'' \127\ The Recording Academy, expressing concern that the 
Office's parallel rulemaking involving server fixation dates for sound 
recordings ``could have a substantive impact on the termination rights 
of songwriters,'' \128\

[[Page 58178]]

asks the Office to ``set aside any issue related to termination rights 
and the MLC until it conducts a full and thorough examination of the 
implications . . . for songwriters and other authors, including an 
opportunity for public comment.'' \129\
---------------------------------------------------------------------------

    \125\ 85 FR at 22576.
    \126\ DLC April NOI Comment at 4 n.19; SGA April NOI Comment at 
8; SONA April NOI Comment at 2.
    \127\ MLC April NOI Comment at 10.
    \128\ Recording Academy April NOI Comment at 3.
    \129\ Id.
---------------------------------------------------------------------------

    Having considered these comments, the statutory text, and 
legislative history, the Office takes the position that the mechanical 
licensing collective should not be required to include termination 
information in the public database. This conclusion does not restrict 
the MLC from optionally including such information. In addition, the 
Office notes that the MLC has agreed to include information regarding 
administrators that license musical works and/or collect royalties for 
such works,\130\ as well as information regarding ``each and every 
entity that, at any given point in time, owns a share of the right to 
receive mechanical royalties for the use of a musical work in covered 
activities,'' \131\ which presumably should include updated ownership 
information that may be relevant for works that are being exploited 
post-exercise of the termination right.
---------------------------------------------------------------------------

    \130\ MLC April NOI Comment at 9.
    \131\ MLC Reply September NOI Comment at 34.
---------------------------------------------------------------------------

9. Data Provenance
    In response to the September NOI, the DLC maintained that if the 
public database includes third-party data, ``it should be labeled as 
such.'' \132\ The DLC provided proposed language suggesting that for 
musical work copyright owner information, the database should indicate 
``whether the ownership information was received directly from the 
copyright owner or from a third party.'' \133\ SoundExchange agreed, 
stating that the public database ``should identify the submitters of 
the information in it, because preserving that provenance will allow 
the MLC and users of the MLC to make judgments about how authoritative 
the information is.'' \134\ Others commenters noted that for sound 
recordings, first-hand data is more likely to be accurate.\135\
---------------------------------------------------------------------------

    \132\ DLC Initial September NOI Comment at 20.
    \133\ DLC Reply September NOI Comment at Add. A-15-16.
    \134\ SoundExchange Initial September NOI Comment at 10-11.
    \135\ The American Association of Independent Music (``A2IM'') & 
RIAA Reply September NOI Comment at 2 (asserting MLC should be 
required to obtain its sound recording data from a single 
authoritative source); Jessop Initial September NOI Comment at 3 
(``The MLC should obtain sound recording information from as close 
to the source as possible. In practice this means from the record 
label or someone directly or indirectly authorized to manage this 
information for them.'').
---------------------------------------------------------------------------

    In the April NOI, the Office noted that while issues related to 
data sourcing, confidence in data quality, accurate copyright ownership 
information, and agency or licensing arrangements, are important, they 
can be nuanced, and so ``the MLC may be better-suited to explore the 
best way to promote accuracy and transparency in issues related to data 
provenance without such regulatory language, including through the 
policies and practices adopted by its dispute resolution and operations 
committees, and by establishing digital accounts through which 
copyright owners can view, verify, or adjust information.'' \136\ The 
Office sought further public input on any issues that should be 
considered relating to the identification of data sourcing in the 
public database, including whether (and how) third-party data should be 
labeled.\137\
---------------------------------------------------------------------------

    \136\ 85 FR at 22576.
    \137\ Id.
---------------------------------------------------------------------------

    In response, the DLC asked the Office to reconsider and include 
data provenance information in database, stating that ``users of the 
database should have the ability to consider whatever information the 
MLC can obtain from copyright owners, and make their own judgments as 
to its reliability based on the MLC's identification of the 
information's source.'' \138\ ARM, FMC, and CISAC & BIEM agree that the 
public database should include data provenance information,\139\ 
although CISAC & BIEM and SONA contend that regulations requiring such 
information are not necessary.\140\ For its part, the MLC ``agrees with 
the Office's tentative conclusion that the MLC and its committees are 
better suited to establish policies and practices . . . to meet the 
goal of improving data quality and accuracy,'' \141\ and that ``[t]he 
MLC should be given sufficient flexibility to determine the best and 
most operationally effective way to ensure the accuracy and quality of 
the data in its database, rather than requiring it to identify the 
source of each piece of information contained therein.'' \142\ The MLC 
also stated that it ``intends to show the provenance of each row of 
sound recording data, including both the name of and DPID for the DMP 
from which the MLC received the sound recording data concerned,'' and 
that it ``intends to put checks in place to ensure data quality and 
accuracy.'' \143\ For musical works information, the MLC maintains that 
it ``will be sourced from copyright owners.'' \144\
---------------------------------------------------------------------------

    \138\ DLC April NOI Comment at 4.
    \139\ ARM April NOI Comment at 3 (contending that the public 
database should indicate ``which data was provided to the MLC by the 
actual copyright owner or its designee, which was provided by a DMP 
and which was provided some other third party''); FMC April NOI 
Comment at 2 (agreeing that public database ``should include 
provenance information, not just because it helps allow for 
judgments about how authoritative that data is, but because it can 
help writers and publishers know where to go to correct any bad data 
they discover''); CISAC & BIEM April NOI Comment at 3 (``Submitters 
of information should be identified, and when the information is 
derived from copyright owners (creators, publishers, CMOs, etc.), it 
should be labelled, and it should prevail over other sources of 
information.'').
    \140\ CISAC & BIEM April NOI Comment at 3 (maintaining that 
``any issues should be resolved through the MLC's dispute resolution 
policy''); SONA April NOI Comment at 8.
    \141\ MLC April NOI Comment at 11.
    \142\ Id. at 12.
    \143\ MLC Ex Parte Letter #7 at 4.
    \144\ Id. at 2.
---------------------------------------------------------------------------

    After carefully reviewing these comments, the Office agrees that 
the MLC should be granted some discretion on how to display data 
provenance information in the public database. Because the commenters 
generally supported the MLC's intent to source musical works 
information from copyright owners, data provenance issues appear to be 
especially relevant to sound recording information in the public 
database. This is particularly true given that the MLC intends to 
populate sound recording information in the public database from 
reports of usage, as opposed to using a single authoritative source 
(discussed below). Accordingly, the proposed rule states that the MLC 
must display data provenance information for sound recording 
information in the public database. The Office seeks public input on 
this aspect of the proposed rule.

B. Sound Recording Information and Disclaimers or Disclosures in the 
Public Musical Works Database

1. ``Sound Recording Copyright Owner'' Information
    In response to the September NOI, RIAA and individual record labels 
expressed concern about which information will populate and be 
displayed to satisfy the statutory requirement to include ``sound 
recording copyright owner'' (SRCO) in the public musical works 
database.\145\ Specifically, RIAA explained that under current industry 
practice, digital music providers send royalties pursuant to 
information received from record companies or others releasing 
recordings to DMPs ``via a specialized DDEX message known as the ERN 
(or Electronic Release Notification),'' which is ``typically populated 
with information about the party that is entitled to receive royalties 
(who may or

[[Page 58179]]

may not be the actual legal copyright owner), because that is the 
information that is relevant to the business relationship between 
record labels and DMPs.'' \146\ In short, information in ``the ERN 
message is not meant to be used to make legal determinations of 
ownership.'' \147\ RIAA noted the potential for confusion stemming from 
a field labelled ``sound recording copyright owner'' in the public 
database being populated by information taken from the labels' ERN 
messages--for both the MLC (i.e., the MLC could ``inadvertently 
misinterpret or misapply the SRCO data''), and users of the free, 
public database (i.e., they could mistakenly assume that the so-called 
``sound recording copyright owner'' information is authoritative with 
respect to ownership of the sound recording).\148\ Separate but 
relatedly, SoundExchange noted that it ``devotes substantial 
resources'' to tracking changes in sound recording rights ownership, 
suggesting that inclusion of a SRCO field ``creates a potential trap 
for the unwary.'' \149\ A2IM & RIAA and Sony suggested that three 
fields--DDEX Party Identifier (DPID), LabelName, and PLine--may provide 
indicia relevant to determining sound recording copyright 
ownership.\150\
---------------------------------------------------------------------------

    \145\ 17 U.S.C. 115(d)(3)(E)(ii)(IV)(bb), (iii)(I)(dd).
    \146\ RIAA Initial September NOI Comment at 2. Although the 
RIAA's initial September NOI comments suggested that the ERN feed 
included a field labeled sound recording copyright owner (SRCO), 
upon reply, it clarified that there is no such specific field. See 
A2IM & RIAA Reply September NOI Comment at 8 n.5.
    \147\ RIAA Initial September NOI Comment at 2.
    \148\ Id. at 3; see id. (``If database users seek out and enter 
into sound recording licenses with the wrong parties and/or make 
payments to the wrong parties--because they misunderstand what the 
data in the SRCO column of the MLC database actually represents--
that would negatively impact our member companies and the artists 
whose recordings they own and/or exclusively license.''). Those 
concerns were echoed in ex parte meetings with individual record 
labels. Universal Music Group (``UMG'') explained that ``actual 
copyright ownership is irrelevant'' in the digital supply chain, as 
``DMPs only need to know who to pay and, maybe, who to call,'' 
whereas record companies separately track copyright ownership 
information. UMG & RIAA Ex Parte Letter Dec. 9, 2019 at 2. UMG 
suggested that the MLC's inclusion of a field labeled ``sound 
recording copyright owner'' might confuse relations between the 
actual copyright owner and the record label conveying information to 
the DMP, where the label is functioning as a non-copyright owner 
distributor through a licensing or press and distribution (P&D) 
arrangement. UMG & RIAA Ex Parte Letter at 2-3. Sony Music 
(``Sony'') expressed similar concerns, suggesting that the Office's 
regulations specify how the ``sound recording copyright owner'' line 
in the public database should be labeled or defined to minimize 
confusion. Sony & RIAA Ex Parte Letter Dec. 9, 2019 at 1-2.
    \149\ SoundExchange Initial September NOI Comment at 11-12.
    \150\ Sony & RIAA Ex Parte Letter at 2 (noting that ``DIY 
artists and aggregators serving that community'' may be most likely 
to populate the DPID field); A2IM & RIAA Reply September NOI Comment 
at 8-10 (identifying DPID, LabelName, and PLine fields in relation 
to sound recording copyright owner information). The LabelName 
represents the ``brand under which a Release is issued and marketed. 
A Label is a marketing identity (like a MusicPublisher's `Imprint' 
in book publishing) and is not the same thing as the record company 
which controls it, even if it shares the same name. The control of a 
Label may move from one owner to another.'' Digital Data Exchange 
(``DDEX''), DDEX Data Dictionary, http://service.ddex.net/dd/ERN411/dd/ddex_Label.html (last visited Sept. 1, 2020). As noted by A2IM & 
RIAA, ``PLine'' is ``[a] composite element that identifies the year 
of first release of the Resource or Release followed by the name of 
the entity that owns the phonographic rights in the Resource or 
Release. . . . In the case of recordings that are owned by the 
artist or the artist's heirs but are licensed to one of [their] 
member companies, the PLine field typically lists those individuals' 
names, even though they generally are not actively involved in 
commercializing those recordings.'' A2IM & RIAA Reply September NOI 
Comment at 9 (citing Music Business Association and DDEX, DDEX 
Release Notification Standard Starter Guide for Implementation 28 
(July 2016), https://kb.ddex.net/download/attachments/327717/MusicMetadata_DDEX_V1.pdf). DPID ``is an alphanumeric identifier 
that identifies the party delivering the DDEX message,'' and ``is 
also generally the party to whom the DMP sends royalties for the 
relevant sound recording.'' Id. at 8.
---------------------------------------------------------------------------

    In the April NOI, the Copyright Office sought public comment 
regarding which data should be in the public database to satisfy the 
statutory requirement, including whether to require inclusion of 
multiple fields to lessen the perception that a single field contains 
definitive data regarding sound recording copyright ownership 
information.\151\ ARM states that it does not object ``to a regulation 
that requires the MLC to include [DDEX Party Identifier (DPID), 
LabelName, and PLine] in the Database, provided the fields are each 
labeled in a way that minimizes confusion and/or misunderstanding,'' as 
``this will lessen the perception that a single field contains 
definitive data regarding sound recording copyright ownership 
information.'' \152\ The MLC ``has no issue with including LabelName 
and PLine information in the public database to the extent the MLC 
receives that information from the DMPs,'' but expressed concern about 
including DPID because it ``does not identify sound recording copyright 
owner, but rather, the sender and/or recipient of a DDEX-formatted 
message.'' \153\ The DLC states that LabelName and Pline ``are adequate 
on their own,'' as DPID ``is not a highly valuable data field,'' and 
contends that the burden of converting DPID numerical codes into 
parties' names (to address ARM's concern about displaying the numerical 
identifier) outweighs any benefit of including DPID in the public 
database.\154\ The Recording Academy, although maintaining that ``DDEX 
ERN information is an important source of reliable and authoritative 
data about a sound recording,'' contends that ``many of the fields 
serve a distinct purpose in the digital supply chain and do not satisfy 
the `sound recording copyright owner' field required in the MLC 
database.'' \155\
---------------------------------------------------------------------------

    \151\ 85 FR at 22577.
    \152\ ARM April NOI Comment at 4. A2IM & RIAA initially stated 
that ``[b]ecause the PLine party is, in many cases, an individual 
who would not want to be listed in a public database and is often 
not the party who commercializes the recording, the regulations 
should prohibit that party name from appearing in the public-facing 
database.'' A2IM & RIAA Reply September NOI Comment at 9. The Office 
understands that ARM, of which A2IM and RIAA are members, does not 
object to PLine being displayed in the public musical works 
database. For DPID, the Office also understands that ARM does not 
object to including the DPID party's name in the public database, 
but does ``object to the numerical identifier being disclosed, as 
the list of assigned DPID numbers is not public and disclosing 
individual numbers (and/or the complete list of numbers) could have 
unintended consequences.'' ARM NPRM Comment at 10, U.S. Copyright 
Office Dkt. No. 2020-5, available at https://beta.regulations.gov/document/COLC-2020-0005-0001.
    \153\ MLC April NOI Comment at 13. See also Digital Data 
Exchange (``DDEX'') NPRM Comment at 1-2, U.S. Copyright Office Dkt. 
No. 2020-5, available at https://beta.regulations.gov/document/COLC-2020-0005-0001 (``[T]he DPID, although a unique identifier and in 
relevant instances an identifier of ``record companies'', does not 
identify sound recording copyright owners. It only identifies the 
sender and recipient of a DDEX formatted message and, in certain 
circumstances, the party that the message is being sent on behalf 
of.'').
    \154\ DLC Letter July 13, 2020 at 10 (stating that while 
converting the DPID numerical code into the party's actual name of 
reporting purposes ``is conceptually possible'' for DMPs, ``it would 
require at least a substantial effort for some services'' (around 
one year of development), and ``would be an impracticable burden for 
some others'').
    \155\ Recording Academy April NOI Comment at 3. Compare ARM 
April NOI Comment at 5 (stating ``there is no single field in the 
ERN that can simultaneously tell the public who owns a work, who 
distributes the work and who controls the right to license the 
work'').
---------------------------------------------------------------------------

    Having considered all relevant comments on this issue, it seems 
that DPID does not have as strong a connection to the MLC's matching 
efforts or the mechanical licensing of musical works as the other 
fields identified as relevant to the statutory requirement to list a 
sound recording copyright owner. In light of this, and the commenters' 
concerns, the proposed rule would not require the MLC to include DPID 
in the public database. In case the MLC later decides to include DPID 
in the public database, given the confidentiality considerations 
raised, the proposed rule states that the DPID party's name may be 
displayed, but not the numerical identifier. In addition, because 
industry practice has not included a single data field to provide 
definitive data regarding sound recording copyright ownership, to

[[Page 58180]]

satisfy the statute's requirement to include information regarding 
``sound recording copyright owner,'' the proposed rule requires the MLC 
to include data for both LabelName and PLine in the public database, to 
the extent reasonably available.\156\ In light of numerous comments 
expressing similar views on this subject, the Office tentatively 
concludes that inclusion of these two fields would adequately satisfy 
the statutory requirement by establishing an avenue for the MLC to 
include relevant data that is transmitted through the existing digital 
supply chain, and thus reasonably available for inclusion in the public 
database.
---------------------------------------------------------------------------

    \156\ As the MMA also requires ``sound recording copyright 
owner'' to be reported by DMPs to the mechanical licensing 
collective in monthly reports of usage, the Office has separately 
issued an interim rule regarding which information should be 
included in such reports to satisfy this requirement. Because 
industry practice has not included a single data field to provide 
definitive data regarding sound recording copyright ownership, that 
rule proposes DMPs can satisfy this obligation by reporting 
information in the following fields: LabelName and PLine. See also 
U.S. Copyright Office, Interim Rule, Music Modernization Act Notices 
of License, Notices of Nonblanket Activity, Data Collection and 
Delivery Efforts, and Reports of Usage and Payment, Dkt. No. 2020-5, 
published elsewhere in this issue of the Federal Register.
---------------------------------------------------------------------------

    As for labeling these fields, the MLC contends that ``the names or 
labels assigned to these fields in the public database is not 
ultimately the MLC's decision,'' claiming that ``it is ultimately at 
DDEX's discretion.'' \157\ The Office strongly disagrees with this 
notion. While DDEX ``standardizes the formats in which information is 
represented in messages and the method by which the messages are 
exchanged'' ``along the digital music value chain'' \158\ (e.g., 
between digital music providers and the MLC), DDEX does not control the 
public database or how information is displayed and/or labeled in the 
public database. While the Office wishes to afford the MLC some 
flexibility in administering the public database, and thus tentatively 
declines to regulate the precise names of these fields,\159\ due to the 
comments noted above, the proposed rule precludes the MLC from labeling 
either the PLine or LabelName field ``sound recording copyright 
owner,'' and requires the MLC to consider industry practices when 
labeling fields in the public database to reduce the likelihood of user 
confusion.\160\ The Office appreciates the MLC's intention to ``make 
available in the database a glossary or key, which would include field 
descriptors.'' \161\ The Office specifically encourages the MLC to 
consider ARM's labeling suggestions with respect to the PLine and 
LabelName fields.
---------------------------------------------------------------------------

    \157\ MLC Ex Parte Letter #7 at 4.
    \158\ DDEX NPRM Comment at 1, U.S. Copyright Office Dkt. No. 
2020-5, available at https://beta.regulations.gov/document/COLC-2020-0005-0001.
    \159\ See ARM April NOI Comment at 5 (suggesting that 
``LabelName'' be described as ``U.S. Releasing Party (if 
available),'' and that ``PLine'' be described as ``Sound Recording 
Owner of Record (who may not be the party that commercializes the 
recording; note that this party may change over time)'').
    \160\ The same limitation applies if the MLC elects to include 
DPID information.
    \161\ MLC Ex Parte Letter #7 at 4.
---------------------------------------------------------------------------

2. Disclaimer
    Relatedly, the Office received persuasive comments requesting that 
the MLC be required to include a conspicuous disclaimer regarding sound 
recording copyright ownership information in its database. For example, 
in response to the September NOI, RIAA suggested that the MLC should be 
required to ``include a clear and conspicuous disclaimer on the home 
screen'' of the public database that it does not purport to provide 
authoritative information regarding sound recording copyright owner 
information.\162\ A2IM & RIAA, CISAC & BIEM, and SoundExchange agreed 
that the public database should display such a disclaimer.\163\ And the 
MLC itself agreed to display a disclaimer that its database should not 
be considered an authoritative source for sound recording 
information.\164\ Subsequent comments in response to the April NOI 
similarly pushed for such a disclaimer,\165\ and the MLC reiterated its 
intention to include a disclaimer that the public database is not an 
authoritative source for sound recording information.\166\ Both ARM and 
the Recording Academy further suggested that the disclaimer include a 
link to SoundExchange's ISRC Search database (located at https://isrc.soundexchange.com).\167\
---------------------------------------------------------------------------

    \162\ RIAA Initial September NOI Comment at 10.
    \163\ A2IM & RIAA Reply September NOI Comment at 9 (urging 
Office to require ``a strong, prominent disclaimer'' to ``make[] it 
explicitly clear that the database does not purport to provide 
authoritative information about sound recording copyright 
ownership''); CISAC & BIEM Reply September NOI Comment at 8 (``CISAC 
and BIEM also encourage the use of appropriate disclaiming language 
in regard to the content of the database, where necessary.''); 
SoundExchange Initial September NOI Comment at 12 (``At a minimum, 
the MLC Database should at least include a disclaimer that the MLC 
Database is not an authoritative source of sound recording rights 
owner information.'').
    \164\ MLC Reply September NOI Comment at 36-37.
    \165\ ARM April NOI Comment at 6-7; Recording Academy April NOI 
Comment at 3-4.
    \166\ MLC April NOI Comment at 13.
    \167\ ARM April NOI Comment at 6-7; Recording Academy April NOI 
Comment at 3-4. The RIAA has designated SoundExchange as the 
authoritative source of ISRC data in the U.S. ARM Ex Parte Letter 
July 27, 2020 at 2; RIAA, RIAA Designates SoundExchange as 
Authoritative Source of ISRC Data in the United States (July 22, 
2020), https://www.riaa.com/riaa-designates-soundexchange-as-authoritative-source-of-isrc-data-in-the-united-states/.
---------------------------------------------------------------------------

    In light of the comments received urging a disclaimer, and the fact 
that no single field may indicate sound recording copyright ownership, 
the proposed rule requires the MLC to include in the public-facing 
version of the musical works database a conspicuous disclaimer that 
states that the database is not an authoritative source for sound 
recording information, and explains the labeling of information in the 
database related to sound recording copyright owner, including the 
``LabelName'' and ``PLine'' fields.\168\ The proposed rule would not 
require that the disclaimer include a link to SoundExchange's ISRC 
Search database, though it certainly does not prohibit such inclusion.
---------------------------------------------------------------------------

    \168\ See Recording Academy April NOI Comment at 3 
(``support[ing] the use of a disclaimer that would properly 
contextualize the use of `sound recording copyright owner' and 
safeguard the legal rights of artists'').
---------------------------------------------------------------------------

3. Populating and Deduping Sound Recording Information in the Public 
Musical Works Database
    The statute requires the MLC to ``establish and maintain a database 
containing information relating to musical works (and shares of such 
works) and, to the extent known, . . . the sound recordings in which 
the musical works are embodied.'' \169\ As noted, for both matched and 
unmatched musical works, the public database must include, to the 
extent reasonably available to the MLC, ``identifying information for 
sound recordings in which the musical work is embodied.'' \170\
---------------------------------------------------------------------------

    \169\ 17 U.S.C. 115(d)(3)(E)(i).
    \170\ Id. at 115(d)(3)(E)(ii)(IV)(bb), (iii)(I)(dd).
---------------------------------------------------------------------------

    Throughout this rulemaking and parallel rulemakings, commenters 
have expressed concern about the MLC using non-authoritative source(s) 
to populate the sound recording information in the public database. For 
example, ARM expressed concern about ``ensuring that all sound 
recording data that ultimately appears in the MLC's public-facing 
database is as accurate as possible and is taken from an authoritative 
source (e.g., SoundExchange),'' \171\ and that

[[Page 58181]]

``the MLC not propagate non-authoritative sound recording data in its 
public-facing database and outward reporting.'' \172\ Similarly, ARM 
members RIAA and A2IM contend that ``the MLC should be required to 
build its database from authoritative data that is obtained from 
copyright owners or their designated data providers,'' a consideration 
echoed by other commenters representing sound recording interests.\173\ 
Though raised in the context of data collection by DMPs, as opposed to 
populating the public database, the DLC agrees with having the MLC 
obtain sound recording information from a single, authoritative source, 
such as SoundExchange, because ``[w]ith record labels acting as the 
primary and authoritative source for their own sound recording 
metadata, the MLC could then rely on only a single (or limited number 
of) metadata field(s) from licensees' monthly reports of usage to look 
up the sound recordings in the MLC database (e.g., an ISRC or digital 
music provider's unique sound recording identifier that would remain 
constant across all usage reporting).'' \174\ The DLC further maintains 
that ``the MLC's suggestion to obtain disparate sound recording data 
from every digital music provider and significant non-blanket licensee 
is far less efficient than obtaining it from a single source like 
SoundExchange.'' \175\
---------------------------------------------------------------------------

    \171\ ARM NPRM Comment at 6, U.S. Copyright Office Dkt. No. 
2020-5, available at https://beta.regulations.gov/document/COLC-2020-0005-0001. See also SoundExchange Initial September NOI Comment 
at 12 (``[T]he MLC is not in a good position to capture or track 
changes in sound recording rights ownership, because it does not 
have a direct relationship with sound recording copyright owners 
like SoundExchange does, nor does it have an ongoing business need 
to ensure that sound recording rights information is always accurate 
and up-to-date.''); Jessop Initial September NOI Comment at 3 (``The 
MLC should obtain sound recording information from as close to the 
source as possible. In practice this means from the record label or 
someone directly or indirectly authorized to manage this information 
for them.''). As noted above, RIAA recently designated SoundExchange 
as the authoritative source of ISRC data in the United States. ARM 
Ex Parte Letter July 27, 2020 at 2; RIAA, RIAA Designates 
SoundExchange as Authoritative Source of ISRC Data in the United 
States (July 22, 2020), https://www.riaa.com/riaa-designates-soundexchange-as-authoritative-source-of-isrc-data-in-the-united-states/.
    \172\ ARM Ex Parte Letter July 27, 2020 at 1. See also ARM April 
NOI Comment at 3 (``[I]t is critical that the Database not 
disseminate unverified data, whether received from DMPs in their 
reports of usage or from other third-party sources.'').
    \173\ A2IM & RIAA Reply September NOI Comment at 3. See 
SoundExchange Initial September NOI Comment at 4 (noting its ``firm 
determination not to mix potentially suspect data provided by 
licensees with the authoritative data provided by rights owners in 
its repertoire database''). See also Music Reports Initial September 
NOI Comment at 3 (``[A] row of sound recording metadata provided by 
one DMP in relation to a discrete sound recording may differ from 
the row of metadata a second DMP provides in relation to the same 
sound recording, with additional or different data fields or 
identifiers unique to that DMP.'').
    \174\ DLC Reply September NOI Comment at 10.
    \175\ DLC Ex Parte Letter Mar. 4, 2020 at 2.
---------------------------------------------------------------------------

    By contrast, the MLC asserts that ``[t]hird-party data from 
SoundExchange or another `authoritative source' cannot, by definition, 
be `authoritative' as to particular sound recordings made available 
through the DMP's service, unless and until the DMP compares the third-
party data to its own data to match the third-party sound recording 
database to the DMP's database of tracks streamed.'' \176\ While the 
MLC has previously stated that it ``intends to use SoundExchange as a 
valuable source of information for sound recording identifying 
information'' (but that a regulation ``requiring SoundExchange as a 
single source would be . . . unnecessarily limiting'' \177\), the MLC 
also contends that ``much of the information [it] believes is necessary 
to build and maintain a useful database is consistent with the data the 
MLC believes should be provided by the DMPs in their [notices of 
license], through their data collection efforts, and through their 
usage reporting (including the reports of usage).'' \178\ The MLC 
maintains that ``receiving from DMPs the unaltered sound recording data 
they originally received from the corresponding sound recording owners 
[in reports of usage] would both improve the MLC's ability to match 
musical works to sound recordings, as the MLC would have fewer metadata 
matches to make (i.e., between musical works and the unaltered data for 
an associated sound recordings), and would better allow the MLC to 
`roll up' sound recording data under entries that are more likely to 
reflect more `definitive' versions of that sound recording data (i.e., 
the unaltered data originally provided by the sound recording 
owners).'' \179\ The MLC further states that ``for uses where the sound 
recording has not yet been matched to a musical work, the sound 
recording data received from DMPs will be used to populate the 
database, as that is the only data the MLC will have for such uses,'' 
and that ``[f]or uses where the sound recording has been matched but 
all musical work ownership shares have not been claimed and are not 
known, the database will contain the sound recording data received from 
DMPs, organized and displayed under each individual musical work to 
which the MLC matched that sound recording usage data.'' \180\ For 
``sound recordings that are matched to a specific musical work and for 
sound recordings that are unmatched, the MLC intends to include sound 
recording information in the disparate forms received from the DMPs 
that provided that information.'' \181\
---------------------------------------------------------------------------

    \176\ MLC NPRM Comment at 11-12, U.S. Copyright Office Dkt. No. 
2020-5, available at https://beta.regulations.gov/document/COLC-2020-0005-0001.
    \177\ MLC Reply September NOI Comment at 11 n.7.
    \178\ MLC Initial September NOI Comment at 24.
    \179\ MLC Ex Parte Letter #7 at 2.
    \180\ Id.
    \181\ Id. at 3.
---------------------------------------------------------------------------

    Having carefully considered this issue in light of the statute and 
legislative history, the Office invites the MLC to take a step back as 
it assesses how it will populate sound recording information in the 
public database. Although the Office has, separately, adopted an 
interim rule that provides a method for the MLC to generally receive 
certain data fields in unaltered form that it has identified as being 
useful for matching, it is not foregone that the same demands must 
drive display considerations with respect to the public database, 
particularly for matched works.\182\ First, while perhaps not 
authoritative (hence the use of the disclaimer, as discussed above), 
the Office believes the MMA anticipates a general reliability of the 
sound recording information appearing in the public database.\183\ The 
MLC's observation that data from SoundExchange is not ``authoritative'' 
with respect to usage of recordings, because only reports of usage 
provide evidence as to which sound recordings were actually streamed 
through a DMP's service, does not seem dispositive. While it may be 
true that reports of usage are the better indicators of which sound 
recordings were actually streamed, the public database is not 
necessarily meant to serve that same function.\184\ The statute 
requires the public database to contain information relating to ``the 
sound recordings in which the musical works are embodied,'' which can 
reasonably be read as information to identify the sound recordings in 
which musical works are embodied, regardless of whether they were 
streamed pursuant to

[[Page 58182]]

disparate attendant metadata or not.\185\ As RIAA explains, ``member 
labels vary the metadata they send the different DMPs in order to meet 
the services' idiosyncratic display requirements,'' which if passed to 
the MLC even in unaltered form, would result in the MLC ``still 
receiv[ing] conflicting data that it will have to spend time and 
resources reconciling.'' \186\ Populating certain fields in the public 
database from reports of usage instead of from an authoritative, 
normalized source thus may increase the likelihood of inaccurate or 
confusing sound recording information in the database. Second, the MLC 
must issue monthly royalty reports to musical copyright owners, which 
will include information about the sound recordings in which their 
musical works are embodied.\187\ Inaccuracies or confusion in the 
public database regarding sound recording information may translate 
into inaccuracies in royalty statements to musical work copyright 
owners.\188\ Finally, the statute requires the MLC to grant digital 
music providers bulk access to the public database free of charge,\189\ 
which seems less meaningful if bulk access were to mean regurgitating 
the same information from reports of usage back to digital music 
providers.
---------------------------------------------------------------------------

    \182\ U.S. Copyright Office, Interim Rule, Music Modernization 
Act Notices of License, Notices of Nonblanket Activity, Data 
Collection and Delivery Efforts, and Reports of Usage and Payment, 
Dkt. No. 2020-5, published elsewhere in this issue of the Federal 
Register. For some fields, the interim rule provides for a one-year 
transition period for DMPs that are not currently set up to provide 
this data unaltered from what was provided by the sound recording 
copyright owner or licensor.
    \183\ See SoundExchange Initial September NOI Comment at 5 
(``[T]he success of the MLC Database . . . will depend on it having 
sufficiently comprehensive data of sufficiently high quality that it 
will be respected and used throughout the industry.''); RIAA Initial 
September NOI Comment at 11 (asserting that record labels 
``anticipate making frequent use of the MLC database'').
    \184\ See SoundExchange NPRM Comment at 5, U.S. Copyright Office 
Dkt. No. 2020-5, available at https://beta.regulations.gov/document/COLC-2020-0005-0001 (``Reporting by digital service providers should 
be viewed primarily as a means of identifying the works used by the 
service, rather than as a way for the MLC to learn about ownership 
and other characteristics of those works.'').
    \185\ See 17 U.S.C. 115(d)(3)(E)(i), (ii)(IV)(bb), (iii)(I)(dd).
    \186\ A2IM & RIAA Reply September NOI Comment at 2.
    \187\ See U.S. Copyright Office, Interim Rule, Royalty Reporting 
and Distribution Obligations of the Mechanical Licensing Collective, 
Dkt. No. 2020-6, published elsewhere in this issue of the Federal 
Register.
    \188\ See SoundExchange NPRM Comment at 9, U.S. Copyright Office 
Dkt. No. 2020-6, available at https://beta.regulations.gov/document/COLC-2020-0003-0001 (expressing concern about relying on DMP reports 
of usage ``as a primary source of the information about musical 
works and sound recordings that will be reported on publisher 
royalty statements'').
    \189\ 17 U.S.C. 115(d)(3)(E)(v).
---------------------------------------------------------------------------

    While the proposed regulatory language does not address this 
aspect, commenters may address this topic in their responses. 
Commenters may consider whether their concerns are heightened, or 
perhaps assuaged, by the MLC's belief that deduplicating sound 
recording records, or cross-matching sound recording data, is ``outside 
the MLC's mandate.'' \190\ Specifically, the MLC maintains that ``[t]he 
workable approach to deduplicating DMP audio would be for DMPs to pre-
match their data against an authoritative source of sound recording 
data and audio, or digitally match their audio against an authoritative 
database of sound recording audio, and then provide the unique ID field 
for the audio in that authoritative audio database, along with access 
for the MLC to the audio from the authoritative database.'' \191\ For 
both the public database and claiming portal, the MLC anticipates that 
for unmatched musical works, there will be separate records for each 
unmatched use (i.e., separate records for each stream of a sound 
recording embodying the unmatched musical work).\192\ The MLC does, 
however, intend to match multiple sound recordings to the same musical 
work in the public database and ``list[ ] all of those sound recordings 
together as associated with the musical work''; but observes that ``it 
is the additional step of having the MLC be the arbiter of which sound 
recordings are `the same,' as opposed to just reflecting which ones 
match to the same musical work through similar metadata, that can be 
problematic.'' \193\ The Office notes that as DMPs will be able to 
satisfy their section 115(d)(4)(B) obligations to ``engage in good-
faith, commercially reasonable efforts to obtain'' sound recording 
information from sound recording copyright owners by arranging for the 
MLC to receive data directly from an authoritative source (e.g., 
SoundExchange),\194\ it may be unlikely that DMPs pre-match their data 
as proposed by the MLC.
---------------------------------------------------------------------------

    \190\ MLC Letter June 15, 2020 at 3 n.3.
    \191\ Id.
    \192\ Id. at 4; MLC Ex Parte Letter #7 at 2 (``[F]or sound 
recordings that are matched to a specific musical work and for sound 
recordings that are unmatched, the MLC intends to include sound 
recording information in the disparate forms received from the DMPs 
that provided that information. The MLC intends to show the 
provenance of each such row of sound recording data (i.e., the DMP 
from which the MLC received the sound recording data concerned), 
including both the name of the DMP and the DPID for that DMP.'').
    \193\ MLC Letter June 15, 2020 at 5.
    \194\ See U.S. Copyright Office, Interim Rule, Music 
Modernization Act Notices of License, Notices of Nonblanket 
Activity, Data Collection and Delivery Efforts, and Reports of Usage 
and Payment, Dkt. No. 2020-5, published elsewhere in this issue of 
the Federal Register.
---------------------------------------------------------------------------

C. Access to Information in the Public Musical Works Database

    As noted above, the statute directs the Copyright Office to 
``establish requirements by regulations to ensure the usability, 
interoperability, and usage restrictions of the [public] musical works 
database.'' \195\ The database must ``be made available to members of 
the public in a searchable, online format, free of charge.'' \196\ The 
mechanical licensing collective must make the data available ``in a 
bulk, machine-readable format, through a widely available software 
application,'' to digital music providers operating under valid notices 
of license, compliant significant nonblanket licensees, authorized 
vendors of such digital music providers or significant nonblanket 
licensees, 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.'' \197\ The legislative history stresses the 
importance of the database and making it available to ``the public 
without charge, with the exception of recovery of the marginal cost of 
providing access in bulk to the public.'' \198\ It 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.'' \199\ And it further 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.'' \200\
---------------------------------------------------------------------------

    \195\ 17 U.S.C. 115(d)(3)(E)(vi).
    \196\ Id. at 115(d)(3)(E)(v).
    \197\ Id.
    \198\ H.R. Rep. No. 115-651, at 8; S. Rep. No. 115-339, at 8; 
Conf. Rep. at 7.
    \199\ H.R. Rep. No. 115-651, at 8; S. Rep. No. 115-339, at 8-9; 
Conf. Rep. at 7.
    \200\ H.R. Rep. No. 115-651, at 8; S. Rep. No. 115-339, at 9; 
Conf. Rep. at 7.
---------------------------------------------------------------------------

1. Method of Access
    In response to the September NOI, the DLC maintained that the 
mechanical licensing collective should not be required to provide more 
than ``[b]ulk downloads (either of the entire database, or of some 
subset thereof) in a flat file format, once per week per user,'' and 
``[o]nline song-by-song searches to query the database, e.g., through a 
website.'' \201\ The DLC also contended that ``it would be unreasonable 
for digital music providers and significant nonblanket licensees to 
foot the bill for database features that would only benefit entities or 
individuals who are not paying a fair share of the MLC's costs,'' \202\ 
and that application programming interfaces (``APIs'') are ``not needed 
by digital music providers and significant nonblanket licensees.'' 
\203\
---------------------------------------------------------------------------

    \201\ DLC Initial September NOI Comment at 21.
    \202\ Id.
    \203\ DLC Reply September NOI Comment at 26.
---------------------------------------------------------------------------

    Multiple commenters disagreed with the DLC, asserting that real-
time access to the public database--not merely a weekly file--is 
necessary to meet the goals of the statute. For example, SoundExchange 
asserted that failure to provide real-time access ``could unfairly

[[Page 58183]]

distort competition for musical work license administration services by 
giving the MLC and its vendors preferred access to current data,'' and 
that the Office should ``maintain[ ] a level playing field in the 
market for musical work license administration services.'' \204\ A2IM & 
RIAA noted that it would be ``damaging to the entire music ecosystem 
for third parties to utilize stale data, especially if they use it in 
connection with some sort of public-facing, data-related business or to 
drive licensing or payment decisions.'' \205\ Further, FMC, MAC, and 
the Recording Academy also all stressed the importance of real-time 
access to the public database through APIs.\206\
---------------------------------------------------------------------------

    \204\ SoundExchange Reply September NOI Comment at 9. See also 
id. at 4-5 (stating that ``[w]eekly downloads of a copy of the 
database are distinctly different and less useful than real-time 
access to current data,'' and noting that the MLC will be making 
constant updates and thus a weekly download would quickly become out 
of date).
    \205\ A2IM & RIAA Reply September NOI Comment at 7.
    \206\ FMC Reply September NOI Comment at 3 (concurring with 
SoundExchange's recommendations about API access, ``including the 
recommendations that API access include unique identi[filig]ers, 
catalog lookup, and fuzzy searching''); Recording Academy Initial 
September NOI Comment at 4 (``ensuring that the database has a user-
friendly API and `machine-to-machine' accessibility is important to 
its practical usability''); MAC Initial September NOI Comment at 2 
(asserting that having API access and ensuring interoperability 
``with other systems is the best way to make certain the MLC 
database becomes part of the overall music licensing ecosystem''). 
See also RIAA Initial September NOI Comment at 11 (``To facilitate 
efficient business-to-business use of the MLC database, the 
regulations should require the MLC to offer free API access to 
registered users of the database who request bulk access.''); 
SoundExchange Reply September NOI Comment at 4-5, 8 (challenging the 
DLC's assertion that providing APIs would be financially burdensome, 
stating that ``it is not obvious that there would be a significant 
cost difference between providing full API access and the diminished 
access the DLC describes'').
---------------------------------------------------------------------------

    In its April NOI, the Office tentatively declined to regulate the 
precise format in which the MLC provides bulk access to its database 
(e.g., APIs), so as to provide the MLC flexibility as technology 
develops in providing database access.\207\ The Office noted, however, 
that the MMA's goals--to have the public database serve as an 
authoritative source of information regarding musical work ownership 
information, to provide transparency, and to be used by entities other 
than digital music providers and significant nonblanket licensees--
``support[ed] real-time access'' to the public database, ``either via 
bulk access or online song-by-song searches.'' \208\
---------------------------------------------------------------------------

    \207\ 85 FR at 22578.
    \208\ Id. See 17 U.S.C. 115(d)(3)(E)(v); see also RIAA Initial 
September NOI Comment at 11 (asserting that record labels 
``anticipate making frequent use of the MLC database''); MIC 
Coalition Initial September NOI Comment at 3 (``The opaqueness of 
the current music marketplace creates uncertainty that 
disproportionately harms small artists and independent publishers 
and stifles innovation. All stakeholders in the music marketplace 
benefit when current and accurate information about copyright 
ownership is easily accessible.'').
---------------------------------------------------------------------------

    In response, SoundExchange maintains that bulk access to the public 
database should be provided via an API, though acknowledging that 
``[i]t does not seem necessary for the Office to regulate technical 
details of how the MLC implements an API.'' \209\ SoundExchange 
contends that to ``ensure level access to the database, it must be made 
available via real-time, bulk access,'' that ``only a robust 
Application Programming Interface can deliver real-time results and 
achieve the industry-wide benefits of the musical works database 
contemplated by the MMA,'' and that ``[t]he use of APIs in modern 
software architectures is a commonly widespread best practice, and the 
level of effort behind their implementation is generally low and can be 
measured in weeks or even days depending on the chosen database 
technology.'' \210\ CISAC & BIEM, FMC, and ARM support real-time bulk 
access to the public database,\211\ with ARM stating that ``[i]t is 
hard to imagine any way the MLC could [offer bulk access that occurs in 
real time, in a machine-readable format where the data is transferred 
via a programmable interface] short of offering API access.'' \212\ ARM 
also urges the Office to ``require the MLC to offer API access now, 
while permitting it to shift to other bulk-access technical solutions 
if and when those become widespread within the relevant industries''--
but ``[s]hould the Office decline to require API access,'' ARM asks 
that the Office ``require some form of bulk access and [ ] specify that 
the bulk-access solution provide real-time access in a machine-readable 
form via a programmable interface.'' \213\
---------------------------------------------------------------------------

    \209\ SoundExchange April NOI Comment at 5.
    \210\ SoundExchange Ex Parte Letter Sept. 1, 2020 at 1.
    \211\ CISAC & BIEM April NOI Comment at 3 (``Updated information 
in the database is crucial, therefore, CISAC and BIEM suggest 
supporting real-time access to ensure DSPs have the correct 
information to properly identify works.''); FMC April NOI Comment at 
2 (``We appreciate the Office's clear acknowledgment that real-time 
access is a priority, but are somewhat puzzled by the reluctance to 
require APIs. Requiring API access and interoperability doesn't 
limit flexibility--done right, it enables flexibility.''); ARM April 
NOI Comment at 7 (asserting that ``the MLC must offer bulk access 
that occurs in real time, in a machine-readable format where the 
data is transferred via a programmable interface'').
    \212\ ARM April NOI Comment at 7.
    \213\ Id. at 8.
---------------------------------------------------------------------------

    Both the MLC and DLC agree with the Office's tentative decision not 
to regulate the precise format in which the mechanical licensing 
collective must provide bulk access to the public database, but rather 
provide the collective flexibility as technology develops.\214\ The MLC 
further emphasizes its commitment ``to fulfilling this important 
requirement,'' and that it is ``working with DDEX and its members on 
the format for publishing data to ensure it is useful to the wide 
variety of constituents.'' \215\ In addition, the MLC maintains that it 
``does plan to provide bulk access to the public data and will 
determine how best to do so once it has completed its initial 
development and rollout of the portal,'' and that ``one of the 
solutions the MLC is contemplating is to provide bulk access to the 
publicly-available data via an API.'' \216\ Music Report contends that 
the Office's regulations should ``not require any specific file 
delivery protocols, but rather state general principles and standards 
to which the MLC must be held,'' such as ``bulk, machine-readable data 
access to eligible parties `via any process for bulk data management 
widely adopted among music rights administrators,' '' which could 
include ``flat-file, API, and XML protocols, but could in future also 
include distributed ledger protocols.'' \217\
---------------------------------------------------------------------------

    \214\ MLC April NOI Comment at 14; DLC April NOI Comment at 5.
    \215\ MLC April NOI Comment at 14; MLC April NOI Comment at 14 & 
n.8.
    \216\ MLC Ex Parte Letter #7 at 6.
    \217\ Music Reports April NOI Comment at 4. Music Reports also 
asks the Office to ``consider requiring the MLC to review such 
protocols every two years to determine whether newer protocols have 
been widely adopted.'' Id. Because digital music providers, 
significant nonblanket licensees, and third parties may base their 
business processes on the format in which the mechanical licensing 
collective provides bulk access to the public database, the Office 
is hesitant to require reevaluation of that format every two years.
---------------------------------------------------------------------------

    Having carefully considered this issue, the Office proposes that 
the MLC shall make the musical works database available to members of 
the public in a searchable, real-time, online format, free of charge. 
Regarding bulk access, the Office is inclined to agree that the MLC 
should--at least initially, due to its start-up nature--have some 
discretion regarding the precise format in which it provides bulk 
access to the public database. The Office is mindful, however, of the 
overwhelming desire for the MLC to provide bulk access through APIs 
from a broad swatch of organizations representing various corners of 
the music ecosystem. Accordingly, the proposed rule states

[[Page 58184]]

that the MLC shall make the musical works database available in a bulk, 
real-time, machine-readable format through a process for bulk data 
management widely adopted among music rights administrators to: (1) 
Digital music providers operating under the authority of valid notices 
of license, and their authorized vendors, free of charge; (2) 
significant nonblanket licensees in compliance with their obligations 
under 17 U.S.C. 115(d)(6), and their authorized vendors, free of 
charge; (3) the Register of Copyrights, free of charge; and (4) any 
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, which shall not be unreasonable. In addition, 
starting July 1, 2021, the MLC must provide bulk access to the public 
database through APIs, although the proposed rule would provide the MLC 
flexibility to determine how to precisely implement that requirement.
2. Marginal Cost
    Despite the statute and legislative history stating third parties 
may be charged the ``marginal cost'' of being provided bulk access, in 
response to the September NOI, A2IM & RIAA expressed concern about 
making the public database available to third parties ``unless the fee 
those third parties are required to pay takes into account the cost for 
the MLC to acquire that data and all of the costs and hard work that 
goes into creating, compiling, verifying, deduping, etc. the sound 
recording data that will reside within the MLC database and the 
potential opportunity costs to [record labels] of having that data 
available to third parties via the MLC.'' \218\ RIAA & A2IM asked the 
Office to define ``marginal cost'' to ``include not just the cost of 
creating and maintaining the bulk access, but also the cost to the MLC 
of acquiring the data, including payment to the data source, for the 
hard work of aggregating, verifying, deduping and resolving conflicts 
in the data.'' \219\ In its April NOI, the Office tentatively declined 
this request, stating that ``[i]t is not clear that `marginal cost' is 
a vague term,'' and that the ``MLC should be able to determine the best 
pricing information in light of its operations, based on the statutory 
and legislative history language.'' \220\
---------------------------------------------------------------------------

    \218\ A2IM & RIAA Reply September NOI Comment at 7; see also id. 
(contending that otherwise third-party businesses ``would be able to 
access that data at a highly subsidized, below-market price'').
    \219\ Id. at 8.
    \220\ 85 FR at 22579; see Conf. Rep. at 7 (``Given the 
importance of this database, the legislation makes clear that it 
shall be made available to the Copyright Office and the public 
without charge, with the exception of recovery of the marginal cost 
of providing access in bulk to the public.''); see also Music 
Reports Initial September NOI Comment at 5 (``Music Reports notes 
that the marginal cost of automated daily data delivery protocols is 
relatively trivial, and calls upon the Office to ensure that such 
automated delivery be made available upon the first availability of 
the [public] database, and that the fee schedule scrupulously adhere 
to the `marginal cost' standard.'').
---------------------------------------------------------------------------

    In response, ARM asks the Office to reconsider its decision.\221\ 
By contrast, Music Reports, a provider of music copyright ownership 
information and rights administration services, contends that 
``marginal cost'' should be ``acknowledged as modest'' and read to mean 
solely the cost of making the data available to such person or 
entity.\222\ Music Reports further maintains that ``the cost of making 
such data available in bulk is non-trivial, but not expensive when 
distributed over time and among multiple parties,'' and that even where 
a range of formats, protocols, and choreographies are offered, ``and 
even when offered at high frequency and on a highly contemporary basis, 
once those elements are established and made public, the cost to 
maintain them tends to be relatively fixed and modest.'' \223\ For its 
part, the MLC agreed with the Office's tentative conclusion that the 
MLC should be able to determine the best pricing information for bulk 
access to the database ``to third parties not enumerated in the 
statute.'' \224\
---------------------------------------------------------------------------

    \221\ ARM April NOI Comment at 9.
    \222\ Music Reports April NOI Comment at 7.
    \223\ Id. at 8; see also Music Reports Initial September NOI 
Comment at 5 (``Music Reports notes that the marginal cost of 
automated daily data delivery protocols is relatively trivial, and 
calls upon the Office to ensure that such automated delivery be made 
available upon the first availability of the [public] database, and 
that the fee schedule scrupulously adhere to the `marginal cost' 
standard.'').
    \224\ MLC April NOI Comment at 14.
---------------------------------------------------------------------------

    The Office notes that the MLC is required to provide access in a 
``bulk, machine-readable format'' to digital music providers operating 
under the authority of valid notices of license and significant 
nonblanket licensees in compliance with their obligations under 17 
U.S.C. 115(d)(6).\225\ Given that the statute envisions digital service 
providers and significant nonblanket licensees funding the mechanical 
licensing collective's activities, which includes the creation and 
maintenance of a public musical works database,\226\ and that the term 
``marginal cost'' is not vague, it is difficult for the Office to see 
how Congress intended third parties to offset the larger cost of the 
collective acquiring the data and aggregating, verifying, deduping and 
resolving conflicts in the data. Rather, the legislative history 
emphasizes the importance of accessibility to the public database \227\ 
and indicates an intent to create a level playing field, recognizing 
that ``[m]usic 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.'' \228\ Requiring third parties 
to pay more than the ``marginal cost'' could create commercial 
disadvantages that the MMA sought to eliminate. Accordingly, the 
proposed rule states that the mechanical licensing collective shall 
make the musical works database available in a bulk, real-time, 
machine-readable format to any 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, which shall not be 
unreasonable.\229\ This allows the MLC to determine the best pricing 
information in light of its operations, while providing reassurance 
that ``marginal cost'' will not be unreasonable.
---------------------------------------------------------------------------

    \225\ See 17 U.S.C. 115(d)(3)(E)(v)(I)-(II).
    \226\ See id. at 115(d)(3)(E), (d)(4)(C), (d)(7)(A).
    \227\ Conf. Rep. at 7 (``Given the importance of this database, 
the legislation makes clear that it shall be made available to the 
Copyright Office and the public without charge, with the exception 
of recovery of the marginal cost of providing access in bulk to the 
public.'').
    \228\ See id. at 6. See also DLC April NOI Comment at 5 (``[T]he 
Office should ensure that neither the MLC nor its vendors are given 
a special competitive advantage because of their responsibility for 
maintaining this database.''); SoundExchange Ex Parte Letter Sept. 
1, 2020 at 1 (``[T]he musical works database should be a resource 
for the entire music industry,'' and ``regulations should ensure 
that potential competitors have the same access to MLC data and the 
MLC database enjoyed by the MLC's vendors.'').
    \229\ Music Reports also asks that bulk access to the public 
database be provided on a ``competition-neutral basis.'' Music 
Reports April NOI Comment at 5. Because the proposed rule requires 
the mechanical licensing collective to provide bulk access to any 
third party that pays the ``marginal cost'' of doing so, the Office 
does not believe such a condition needs to be codified in 
regulations.
---------------------------------------------------------------------------

3. Abuse
    The legislative history states that in cases of efforts by third 
parties to bypass the marginal cost recovery for bulk access (i.e., 
abuse), the MLC ``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.'' \230\ In response to the September NOI, 
both the MLC and DLC proposed regulatory language that would provide 
the MLC discretion to block efforts to bypass the

[[Page 58185]]

marginal cost recovery.\231\ A2IM & RIAA also suggested that the MLC be 
required to implement technological protection measures (``TPMs'') to 
reduce the likelihood of third parties ``scraping'' data without paying 
any fee.\232\ In the April NOI, the Office agreed that, in principle, 
the MLC should at a minimum have such discretion, and sought public 
input on any issues regarding the mechanical licensing collective's 
ability to block efforts to bypass the marginal cost recovery, 
particularly how to avoid penalizing legitimate users while providing 
the collective flexibility to police abuse, and whether regulatory 
language should address application of TPMs.\233\
---------------------------------------------------------------------------

    \230\ H.R. Rep. No. 115-651, at 8; S. Rep. No. 115-339, at 8-9; 
Conf. Rep. at 7.
    \231\ MLC Initial September NOI Comment at 25; DLC Reply 
September NOI Comment Add. at A-17.
    \232\ A2IM & RIAA Reply September NOI Comment at 7.
    \233\ 85 FR at 22579.
---------------------------------------------------------------------------

    Both the MLC and DLC reiterate their support of granting the 
mechanical licensing collective discretion to block third parties from 
bulk access to the public database after attempts to bypass marginal 
cost recovery,\234\ and no commenters opposed this proposal. The MLC 
further contends that it should have the discretion to block bulk 
database access where persons have engaged in other unlawful activity 
with respect to the database.\235\
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    \234\ MLC April NOI Comment at 15 (``[A] regulation allowing the 
MLC to block efforts by non-licensees or significant non-blanket 
licensees to bypass the marginal cost recovery for bulk database 
access through repeated queries would be useful.''); DLC April NOI 
Comment at 5 (``DLC reiterates its prior comment that the problem of 
abusive access can be adequately addressed by empowering the MLC to 
block efforts to bypass marginal cost recovery.'').
    \235\ MLC April NOI Comment at 15.
---------------------------------------------------------------------------

    In light of these comments, the proposed rule states that the MLC 
shall establish appropriate terms of use or other policies governing 
use of the database that allows it to suspend access to any individual 
or entity that appears, in the collective's reasonable determination, 
to be attempting to bypass the MLC's right to charge a fee to recover 
its marginal costs for bulk access through repeated queries, or to 
otherwise be engaging in unlawful activity with respect to the database 
(including, without limitation, seeking to hack or unlawfully access 
confidential, non-public information contained in the database) or 
misappropriating or using information from the database for improper 
purposes. To ensure transparency regarding which persons or entities 
have had bulk database access suspended, as discussed more below, the 
proposed rule requires the mechanical licensing collective to identify 
such persons and entities in its annual report and explain the 
reason(s) for suspension.
4. Restrictions on Use
    In response to the September 2019 NOI, CISAC & BIEM asked for 
regulations defining ``strict terms and conditions'' for use of data 
from the database by digital music providers and significant nonblanket 
licensees (and their authorized vendors), ``including prohibition for 
DSPs to use data for purposes other than processing uses and managing 
licenses and collaborating with the MLC in data collection.'' \236\ By 
contrast, the DLC maintained that ``licensees should be able use the 
data they receive from the MLC for any legal purpose.'' \237\ While the 
MLC ``agree[d] that there should be some reasonable limitation on the 
use of the information to ensure that it is not misappropriated for 
improper purposes'' and stated that it ``intends to include such 
limitation in its terms of use in the database,'' the MLC contended 
that appropriate terms of use should address potential misuse of 
information from the public database (rather than regulations).\238\
---------------------------------------------------------------------------

    \236\ CISAC & BIEM Initial September NOI Comment at 4.
    \237\ DLC Initial September NOI Comment at 21.
    \238\ MLC Reply September NOI Comment at 37.
---------------------------------------------------------------------------

    In its April 2020 NOI, the Office agreed that while it will be 
important for the collective to develop reasonable terms of use to 
address potential misuse of information in the public database, and 
that it appreciates the role that contractual remedies may play to 
deter abuse, the MMA directs the Office to issue regulations regarding 
``usage restrictions,'' in addition to usability and interoperability 
of the database.\239\ The Office also acknowledged the risk of misuse, 
and sought further public input on any issues that should be considered 
relating to restrictions on usage of information in the public 
database, including whether regulatory language should address remedies 
for misuse (and if so, how and why), or otherwise provide a potential 
regulatory floor for the MLC's terms of use.\240\
---------------------------------------------------------------------------

    \239\ 85 FR at 22579; 17 U.S.C. 115(d)(3)(E)(vi).
    \240\ 85 FR at 22579.
---------------------------------------------------------------------------

    Comments in response to the Office's April 2020 notification were 
mixed. CISAC & BIEM again asked for ``strict rules for the use of data 
available on the MLC database by the public, prohibiting commercial 
uses and allowing exclusively lookup functions,'' \241\ whereas Music 
Reports contends that data in the public database should be available 
for any legal use.\242\ FMC is ``inclined to want to see some 
reasonable terms and conditions'' regarding use of the public database, 
but that ``[i]t's entirely appropriate for the Office to offer a 
floor.'' \243\ The DLC contends that flexibility is appropriate 
regarding restrictions on use, that ``the specific operational 
realities of the database to lend themselves to useful ex ante 
regulation,'' and thus reiterated that ``abusive access can be 
adequately addressed by empowering the MLC to block efforts to bypass 
marginal cost recovery.'' \244\
---------------------------------------------------------------------------

    \241\ CISAC & BIEM April NOI Comment at 3
    \242\ Music Reports April NOI Comment at 7.
    \243\ FMC April NOI Comment at 3.
    \244\ DLC April NOI Comment at 5.
---------------------------------------------------------------------------

    For its part, the MLC continues to maintain that ``there should be 
some reasonable limitation on the use of the information in the MLC 
database to ensure that it is not misappropriated for improper 
purposes,'' and that it intends to ``include such limitation in its 
terms of use in the database.'' \245\ In response to the Office's 
concerns about misappropriation of personally identifiable information 
(PII) by bad actors,\246\ the MLC maintains that it ``does not intend 
to include in the public database the types of information that have 
traditionally been considered PII, such as Social Security Number 
(SSN), date of birth (DOB), and home address or personal email (to the 
extent those are not provided as the contact information required under 
17 U.S.C. 115(d)(3)(E)(ii)(III)),'' and that it ``further intends to 
protect other types of PII.'' \247\ But the MLC also asks that it ``be 
afforded the flexibility to disclose information not specifically 
identified by statute that would still be useful for the database but 
would not have serious privacy or identity theft risks to individuals 
or entities.'' \248\
---------------------------------------------------------------------------

    \245\ MLC April NOI Comment at 15.
    \246\ See 85 FR at 22579.
    \247\ MLC April NOI Comment at 16.
    \248\ Id. at 16 n.9.
---------------------------------------------------------------------------

    As noted above, the proposed rule requires the mechanical licensing 
collective to establish appropriate terms of use or other policies 
governing use of the database that allow it to suspend access to any 
individual or entity that appears, in the collective's reasonable 
determination, to be engaging in unlawful activity with respect to the 
database (including, without limitation, seeking to hack or unlawfully 
access confidential, non-public information contained in the database) 
or misappropriating or using information from the database for improper 
purposes. The proposed rule also requires the MLC to identify any 
persons and entities in its annual report that have had database access

[[Page 58186]]

suspended and explain the reason(s) for such suspension, for purposes 
of transparency. While wishing to grant the MLC some flexibility 
regarding restrictions on use regarding the public database, the Office 
reiterates that any database terms of use should not be overly broad or 
impose unnecessary restrictions upon good faith users.\249\
---------------------------------------------------------------------------

    \249\ See 85 FR at 22579.
---------------------------------------------------------------------------

D. Transparency of MLC Operations; Annual Reporting

    The legislative history and statute envision the MLC ``operat[ing] 
in a transparent and accountable manner'' \250\ and ensuring that its 
``policies and practices . . . are transparent and accountable.'' \251\ 
The MLC itself has expressed its commitment to transparency, both by 
including transparency as one of its four key principles underpinning 
its operations on its current website,\252\ and in written comments to 
the Office.\253\ As noted in the April NOI, one avenue for MLC 
transparency is through its annual report.\254\ The MMA requires the 
MLC to publish an annual report no later than June 30 of each year 
after the license availability date, setting forth information 
regarding: (1) Its operational and licensing practices; (2) how 
royalties are collected and distributed; (3) budgeting and 
expenditures; (4) the collective total costs for the preceding calendar 
year; (5) the MLC's projected annual budget; (6) aggregated royalty 
receipts and payments; (7) expenses that are more than ten percent of 
the MLC's annual budget; and (8) the MLC's efforts to locate and 
identify copyright owners of unmatched musical works (and shares of 
works).\255\ The MLC must deliver a copy of the annual report to the 
Register of Copyrights and make this report publicly available.\256\
---------------------------------------------------------------------------

    \250\ S. Rep. No. 115-339, at 7.
    \251\ 17 U.S.C. 115(d)(3)(D)(ix)(I)(aa).
    \252\ The MLC, Mission and Principles, https://themlc.com/mission-and-principles (last visited Sept. 1, 2020) (``The MLC will 
build trust by operating transparently. The MLC is governed by a 
board of songwriters and music publishers who will help ensure our 
work is conducted with integrity.''). See also The MLC, The MLC 
Process, https://themlc.com/how-it-works (last visited Sept. 1, 
2020) (``The MLC is committed to transparency. The MLC will make 
data on unclaimed works and unmatched uses available to be searched 
by registered users of The MLC Portal and the public at large.'').
    \253\ See, e.g., MLC Reply September NOI Comment at 42-43 (``The 
MLC is committed to transparency and submits that, while seeking to 
enact regulations is not an efficient or effective approach, the MLC 
will implement policies and procedures to ensure transparency.'').
    \254\ 85 FR at 22572.
    \255\ 17 U.S.C. 115(d)(3)(D)(vii)(I)(aa)-(hh); Conf. Rep. at 7.
    \256\ 17 U.S.C. 115(d)(3)(D)(vii)(I), (II).
---------------------------------------------------------------------------

    The annual report provides much of the information requested by 
parties about the collective's activities. For example, commenters 
sought disclosure of information in specific areas the statute 
envisions the annual report addressing, such as board governance,\257\ 
the manner in which the MLC will distribute unclaimed royalties,\258\ 
development updates and certifications related to its IT systems,\259\ 
and the MLC's efforts to identify copyright owners.\260\ The MLC itself 
recognized that its annual report is one way in which it intends to 
``promote transparency.'' \261\ But based on the September NOI 
comments, the Office thus asked for further public input on specific 
types of information the MLC should include in its annual report, 
including whether to include issues related to vendor selection 
criteria and performance, board and committee selection criteria, and 
actual or potential conflicts raised with and/or addressed by its board 
of directors, if any, in accordance with the MLC's policy.\262\
---------------------------------------------------------------------------

    \257\ Recording Academy Reply September NOI Comment at 2.
    \258\ Lowery Reply September NOI Comment at 8; Monica Corton 
Consulting Reply September NOI Comment at 3.
    \259\ Lowery Reply September NOI Comment at 5.
    \260\ SGA Initial September NOI Comment at 6. CISAC & BIEM 
contend that ``[c]larifications should be made on how musical works 
will be matched to sound recording and how far these cross-
references will not conflict with matching and or claims conducted 
by other entities, which could raise identification conflicts at DSP 
level.'' CISAC & BIEM Initial September NOI Comment at 3. The 
statute requires the MLC to disclose in its annual report ``the 
efforts of the collective to locate and identify copyright owners of 
unmatched musical works (and shares of works)'' with respect to 
administration of the U.S. blanket license under section 115. 17 
U.S.C. 115(d)(3)(D)(vii)(I)(hh).
    \261\ The MLC, Transparency, https://themlc.com/faqs/categories/transparency (last visited Sept. 1, 2020) (noting that the MLC will 
``promote transparency'' by ``[p]roviding an annual report to the 
public and to the Copyright Office detailing the operations of The 
MLC, its licensing practices, collection and distribution of 
royalties, budget and cost information, its efforts to resolve 
unmatched royalties, and total royalties received and paid out'').
    \262\ 85 FR at 22572; see also National Association of 
Independent Songwriters (``NOIS'') et al. Initial September NOI 
Comment at 16; MAC Initial September NOI Comment at 2; Lowery Reply 
September NOI Comment at 8; SGA Reply September NOI Comment at 5.
---------------------------------------------------------------------------

    In response, the DLC, SGA, and FMC agree that the MLC's annual 
report should be used to provide transparency on the collective's 
activities more generally,\263\ with both the DLC and FMC stating that 
the annual report should include information about board governance and 
the selection and criteria used for the collective's vendors.\264\ 
CISAC & BIEM maintain that the annual report should include information 
regarding the ``global amount of accrued undistributed royalties.'' 
\265\ SGA proposes that a section of the annual report ``be dedicated 
to an independent report by the board's music creator representatives 
on their activities in support of songwriter and composer interests, 
the handling of conflict-related problems by the board and its various 
controlled committees, and the issues of conflict that remain to be 
addressed and resolved.'' \266\ Other commenters asked for MLC 
oversight to ensure disclosure of certain information, though without 
directly linking such oversight to the annual report. For example, one 
commenter expressed concern about the ability of the MLC to apply 
unclaimed accrued royalties on an interim basis to defray the 
collective's costs (and the transparency of any decisions to do so), 
should the administrative assessment fail to cover current collective 
total costs.\267\ In the Office's separate rulemaking regarding royalty 
statements, other commenters expressed a desire to impose a deadline on 
the MLC's distribution of royalties to copyright owners to ensure 
prompt

[[Page 58187]]

payment, but presumably also to provide copyright owners some 
estimation as to when they will be paid.
---------------------------------------------------------------------------

    \263\ See DLC April NOI Comment at 3 (stating that the 
transparency requirements in the annual report ``are critical to 
ensuring that all industry participants--songwriters, publishers, 
licensees, and the Copyright Office itself--can confirm that the MLC 
is operating effectively and in the best interests of the 
industry.''); SGA April NOI Comment at 6 (``As the Copyright Office 
stated in its Notice, another `avenue for transparency with respect 
to the MLC is through its annual report.' SGA emphatically agrees 
with this assessment . . .''); FMC April NOI Comment at 1 (agreeing 
that the annual report should include information about board 
governance, the manner in which the collective will distribute 
unclaimed royalties, development updates and certifications related 
to its IT systems, and the collective's efforts to identify 
copyright owners); see id. (``Annual reports would ideally also 
offer a sense where the areas of growth and needs for additional 
effort might lie, with regards to demographics and genres; this sort 
of candid self-assessment, would help writers and industry allies be 
effective partners to the MLC in reaching these populations most 
effectively.'').
    \264\ DLC April NOI Comment at 3; FMC April NOI Comment at 1.
    \265\ CISAC & BIEM April NOI Comment at 2.
    \266\ SGA April NOI Comment at 7. Although the Office 
tentatively declines to require an independent report from the 
board's music creator representatives through regulation, the Office 
fully expects the MLC to give voice to its board's songwriter 
representatives as well as its statutory committees, whether through 
its annual reporting or other public announcements.
    \267\ See Castle April NOI Comment at 13 (stating Office 
``regulations should provide that there be some written public 
statement by The MLC's CFO . . . that these funds are being approved 
by the board for disbursement before the taking along with a 
justification statement. The MLC board should have to sign up to 
that statement with full transparency of why there is this 
compelling need and why that need can only be met this way.''); 17 
U.S.C. 115(d)(7)(C).
---------------------------------------------------------------------------

    For its part, although the MLC states that it ``is committed to 
providing additional information about other areas of its operations in 
the annual report or in other public disclosures,'' \268\ and that it 
``is making public a substantial amount of information concerning its 
operations and communications as such information becomes available,'' 
\269\ it ``does not believe that such further regulation in this area 
is necessary, as the MMA already identifies with sufficient detail the 
subjects that the MLC is to report on in the annual report,'' \270\ and 
any such regulation would be ``premature.'' \271\ The MLC contends that 
it ``has already publicly disclosed substantial details of the process 
by which it selected its primary technology and royalty administration 
vendors, and publicly filed copies of its [request for information] and 
[request for proposals],'' \272\ and regarding ``the selection process 
of its initial board of directors and statutory committees,'' with 
future board and committee selections being made pursuant to the MLC's 
by-laws, which are currently public.\273\ The MLC expresses concern 
that disclosure regarding vendor selection ``will likely have a 
chilling effect on vendor participation in future RFIs and RFPs because 
bidders that do not want information in their proposals to be made 
publicly available will elect not to participate,'' \274\ while noting 
that statutory-required reporting regarding ``aggregated royalty 
receipts and payments'' and ``efforts to locate and identify copyright 
owners of unmatched works (and shares of works)'' will speak to vendor 
performance.\275\ The MLC maintains that if the Office does decide to 
require disclosure of vendor selection information in the annual 
report, the term ``vendor'' should mean ``any vendor who is both 
performing services related to the mechanical licensing collective's 
matching and royalty accounting responsibilities and who received 
compensation in an amount greater than 10% of the mechanical licensing 
collective's budget.'' \276\ In addition, the MLC notes that ``[i]t is 
not common practice to publish the details of how a conflicts policy is 
implemented or applied, because such publication may violate 
confidentiality obligations of board members that may be subject to 
separate confidentiality agreements,'' and that ``it is appropriate for 
the MLC's conflicts policy to be enforced internally, with directors 
having the option to share any conflicts concerns privately with the 
MLC's counsel and recuse themselves from votes if appropriate.'' \277\
---------------------------------------------------------------------------

    \268\ MLC April NOI Comment at 4.
    \269\ Id. at 7.
    \270\ Id. at 3.
    \271\ Id. at 4.
    \272\ Id. at 5.
    \273\ Id. at 6; see The MLC, Governance and Bylaws, https://themlc.com/governance (last visited Sept. 1, 2020). The MLC notes 
that the collective's board appointments are subject to additional 
oversight given that they require the approval of the [Library of 
Congress].'' MLC April NOI Comment at 6. The Copyright Office also 
makes available information concerning the MLC's board membership 
and the procedure to fill MLC board and statutory committee 
vacancies. See U.S. Copyright Office, MLC and DLC Contact 
Information, Boards of Directors, and Committees, https://www.copyright.gov/music-modernization/mlc-dlc-info/ (last visited 
Sept. 1, 2020).
    \274\ MLC April NOI Comment at 5.
    \275\ Id. at 6. The MLC also suggests that because the statute 
requires the annual report to include information regarding 
``expenses that are more than 10 percent of the annual mechanical 
licensing collective budget,'' ``[t]his definition will include the 
MLC's primary vendor, and thus provide even further disclosures.'' 
MLC Ex Parte Letter #7 at 7; 17 U.S.C. 115(d)(3)(D)(vii)(I)(gg). 
Identification of the MLC's vendors, should they exceed ten percent 
of the MCL's budget, is not the same as identifying the criteria 
used to select those vendors, although the Office agrees this 
statutory requirement should encourage the MLC to be hearty in its 
annual reporting with respect to the performance of primary vendors 
as a result.
    \276\ MLC Ex Parte Letter #7 at 7. The MLC's startup assessment 
is $33,500,000 and its 2021 annual assessment is $28,500,000, 
indicating that a 10% threshold would limit disclosure to vendors 
paid several million dollars. See 37 CFR 390.2(a), (b).
    \277\ MLC April NOI Comment at 6.
---------------------------------------------------------------------------

    Given the overwhelming desire for transparency regarding the MLC's 
activities, and the ability of the annual report to provide such 
transparency, the proposed rule requires the MLC to disclose certain 
information in its annual report besides the statutorily-required 
categories of information. First, the annual report must disclose the 
MLC's selection of board members and criteria used in selecting any new 
board members during the preceding calendar year. Second, the annual 
report must disclose the MLC's selection of new vendors hired to assist 
with the technological or operational administration of the blanket 
license during the preceding calendar year, including the criteria used 
in deciding to select such vendors, and any performance reviews of such 
vendors.\278\ The proposed rule intends to include vendors directly 
involved with collective's administration of the section 115 license, 
versus any vendors it may hire, generally (e.g., water delivery). 
Third, the annual report must disclose whether the MLC, pursuant to 17 
U.S.C. 115(d)(7)(C), has applied any unclaimed accrued royalties on an 
interim basis to defray costs in the event that the administrative 
assessment is inadequate to cover collective total costs. Fourth, the 
annual report must disclose the average processing and distribution 
times for distributing royalties to copyright owners. And fifth, as 
noted above, the annual report must disclose whether the MLC suspended 
access to any individual or entity attempting to bypass the 
collective's right to charge a fee to recover its marginal costs for 
bulk access outlined in 17 U.S.C. 115(d)(3)(E)(v)(V) through repeated 
queries, or to otherwise be engaging in unlawful activity with respect 
to the database (including, without limitation, seeking to hack or 
unlawfully access confidential, non-public information contained in the 
database) or misappropriating or using information from the database 
for improper purposes.
---------------------------------------------------------------------------

    \278\ The statute provides that the MLC is authorized to 
``arrange for services of outside vendors and others, to support the 
activities of the mechanical licensing collective.'' 17 U.S.C. 
115(d)(3)(C)(i)(VII). The MLC selected its vendor Harry Fox Agency 
(``HFA'') without advance notice to the Office, following the 
designation of the MLC. Given commenters' concerns regarding HFA's 
past performance, the Office is receptive to receiving continual 
feedback regarding future performance of activities taken on behalf 
of the MLC. See Lowery Reply September NOI Comment at 3, 11-12; SGA 
Reply September NOI Comment at 5.
---------------------------------------------------------------------------

    As expressed in the April NOI, the Office encourages the MLC to 
publicly share with greater particularity planning information, such as 
notional schedules, beta wireframes, or other documentation, to provide 
context to MLC stakeholders in the months leading up to the license 
availability date. The Office appreciates that the MLC ``still intends 
to publicly roll out the portal for beta testing at or shortly after 
the end of the third quarter of this year,'' and that ``[t]here will 
also be alpha testing (to a smaller group) prior to beta testing.'' 
\279\
---------------------------------------------------------------------------

    \279\ MLC Ex Parte Letter #7 at 4.
---------------------------------------------------------------------------

    Relatedly, two commenters suggested that the Office's regulations 
create a ``feedback loop'' to receive complaints about the mechanical 
licensing collective.\280\ CISAC & BIEM \281\ agree that ``the 
identification of a point of contact for inquiries and complaints with 
timely redress is an indispensable feature for transparency.'' The 
Office notes that the statute requires the mechanical licensing 
collective to

[[Page 58188]]

``identify a point of contact for publisher inquiries and complaints 
with timely redress.'' \282\ The proposed rule emphasizes this 
responsibility by requiring the MLC to designate a point of contact for 
inquiries and complaints with timely redress, including complaints 
regarding the public musical works database and/or the collective's 
activities. The name and contact information for the point of contact 
must be made prominently available on the MLC's website.\283\ In 
addition, the Copyright Office always welcomes feedback relevant to its 
statutory duties or service. Members of the public may communicate with 
the Office through the webform available https://www.copyright.gov/help. The Office requests that any inquiries or comments with respect 
to the MLC or MMA be indicated accordingly.
---------------------------------------------------------------------------

    \280\ Castle April NOI Comment at 16 (contending the Office 
should create ``a complaint webform with someone to read the 
complaints as they come in as part of the Office's oversight 
role''); Lowery Reply September NOI Comment at 11 (stating 
``regulations should provide for a feedback loop that songwriters 
can avail themselves of that the Copyright Office must take into 
account when determining its re-designation'').
    \281\ CISAC & BIEM April NOI Comment at 2.
    \282\ 17 U.S.C. 115(d)(3)(D)(ix)(I)(bb).
    \283\ See U.S. Copyright Office, Section 512 of title 17 159 
(2020), https://www.copyright.gov/policy/section512/section-512-full-report.pdf (noting that while section 512 requires an online 
service provider's agent information to be ``publicly available'' on 
its website, ``there is currently no standardized practice for the 
location or content of user notifications regarding the takedown 
process,'' and that Congress could thus ``modify the language of 
section 512(c)(2) to provide that the designated agent's information 
be not just `on its website in a location accessible to the public,' 
but also `prominently displayed' ''); 17 U.S.C. 512(c)(2).
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III. Subjects of Inquiry

    The proposed rule is designed to reasonably implement a number of 
regulatory duties assigned to the Copyright Office under the MMA. The 
Office solicits additional public comment on all aspects of the 
proposed rule. If the MLC believes it will need time and/or a 
transition period to implement any aspect of the proposed rule, the 
Office asks the MLC to provide an explanation and time estimate(s) for 
such implementation.

List of Subjects in 37 CFR Part 210

    Copyright, Phonorecords, Recordings.

Proposed Regulations

    For the reasons set forth in the preamble, the Copyright Office 
proposes amending 37 CFR part 210 as follows:

PART 210--COMPULSORY LICENSE FOR MAKING AND DISTRIBUTING PHYSICAL 
AND DIGITAL PHONORECORDS OF NONDRAMATIC MUSICAL WORKS

0
1. The authority citation for part 210 continues to read as follows:

    Authority: 17 U.S.C. 115, 702.

0
2. Add Sec. Sec.  210.31 through 201.33 to read as follows:


Sec.  210.31  Musical works database information.

    (a) General. This section prescribes the rules under which the 
mechanical licensing collective will provide information relating to 
musical works (and shares of such works), and sound recordings in which 
the musical works are embodied, in the public musical works database 
prescribed by 17 U.S.C. 115(d)(3)(E), and to increase usability of the 
database.
    (b) Matched musical works. With respect to musical works (or shares 
thereof) where the copyright owners have been identified and located, 
the musical works database shall contain, at a minimum, the following:
    (1) Information regarding the musical work:
    (i) Musical work title(s);
    (ii) The copyright owner of the musical work (or share thereof), 
and the ownership percentage of that owner;
    (iii) Contact information for the copyright owner of the musical 
work (or share thereof), which can be a post office box or similar 
designation, or a ``care of'' address (e.g., publisher);
    (iv) The mechanical licensing collective's standard identifier for 
the musical work; and
    (v) To the extent reasonably available to the mechanical licensing 
collective:
    (A) Any alternative or parenthetical titles for the musical work;
    (B) ISWC;
    (C) Songwriter(s), with the mechanical licensing collective having 
the discretion to allow songwriters, or their authorized 
representatives, to have songwriter information listed anonymously or 
pseudonymously;
    (D) Administrator(s) or other authorized entity(ies) who license 
the musical work (or share thereof) and/or collect mechanical royalties 
for use of such musical work (or share thereof) in the United States;
    (E) ISNI(s) and/or IPI(s) for each musical work copyright owner, 
and, if different, songwriter, and administrator;
    (F) Unique identifier(s) assigned by the blanket licensee, if 
reported by the blanket licensee; and
    (G) For classical compositions, opus and catalog numbers.
    (2) Information regarding the sound recording(s) in which the 
musical work is embodied, to the extent reasonably available to the 
mechanical licensing collective:
    (i) ISRC;
    (ii) Sound recording name(s), including all known alternative and 
parenthetical titles for the sound recording;
    (iii) Information related to the sound recording copyright owner, 
including LabelName and PLine. Should the mechanical licensing 
collective decide to include DDEX Party Identifier (DPID) in the public 
database, the DPID party's name may be displayed, but not the numerical 
identifier;
    (iv) Featured artist(s);
    (v) Playing time;
    (vi) Version;
    (vii) Release date(s);
    (viii) Producer;
    (ix) UPC; and
    (x) Other non-confidential information commonly used to assist in 
associating sound recordings with musical works.
    (c) Unmatched musical works. With respect to musical works (or 
shares thereof) where the copyright owners have not been identified or 
located, the musical works database shall include, to the extent 
reasonably available to the mechanical licensing collective:
    (1) Information regarding the musical work:
    (i) Musical work title(s), including any alternative or 
parenthetical titles for the musical work;
    (ii) The ownership percentage of the musical work for which an 
owner has not been identified;
    (iii) If a musical work copyright owner has been identified but not 
located, the identity of such owner and the ownership percentage of 
that owner;
    (iv) The mechanical licensing collective's standard identifier for 
the musical work;
    (v) ISWC;
    (vi) Songwriter(s), with the mechanical licensing collective having 
the discretion to allow songwriters, or their authorized 
representatives, to have songwriter information listed anonymously or 
pseudonymously;
    (vii) Administrator(s) or other authorized entity(ies) who license 
the musical work (or share thereof) and/or collect mechanical royalties 
for use of such musical work (or share thereof) in the United States;
    (viii) ISNI(s) and/or IPI(s) for each musical work copyright owner, 
and, if different, songwriter and administrator;
    (ix) Unique identifier(s) assigned by the blanket licensee, if 
reported by the blanket licensee; and
    (x) For classical compositions, opus and catalog numbers.
    (2) Information regarding the sound recording(s) in which the 
musical work is embodied:
    (i) ISRC;
    (ii) Sound recording name(s), including all known alternative and 
parenthetical titles for the sound recording;
    (iii) Information related to the sound recording copyright owner, 
including

[[Page 58189]]

LabelName and PLine. Should the mechanical licensing collective decide 
to include DDEX Party Identifier (DPID) in the public database, the 
DPID party's name may be displayed, but not the numerical identifier;
    (iv) Featured artist(s);
    (v) Playing time;
    (vi) Version;
    (vii) Release date(s);
    (viii) Producer;
    (ix) UPC; and
    (x) Other non-confidential information commonly used to assist in 
associating sound recordings with musical works, and any additional 
non-confidential information reported to the mechanical licensing 
collective that may assist in identifying musical works.
    (d) Field labeling. The mechanical licensing collective shall 
consider industry practices when labeling fields in the public database 
to reduce the likelihood of user confusion, particularly regarding 
information relating to sound recording copyright owner. Fields 
displaying PLine, LabelName, or, if applicable, DPID, information may 
not on their own be labeled ``sound recording copyright owner.''
    (e) Data provenance. For information relating to sound recordings, 
the mechanical licensing collective shall identify the source of such 
information in the public musical works database.
    (f) Historical data. The mechanical licensing collective shall 
maintain at regular intervals historical records of the information 
contained in the public musical works database, including a record of 
changes to such database information and changes to the source of 
information in database fields, in order to allow tracking of changes 
to the ownership of musical works in the database over time. The 
mechanical licensing collective shall determine, in its reasonable 
discretion, the most appropriate method for archiving and maintaining 
such historical data to track ownership and other information changes 
in the database.
    (g) Personally identifiable information. The mechanical licensing 
collective shall not include in the public musical works database any 
individual's Social Security Number (SSN), taxpayer identification 
number, financial account number(s), date of birth (DOB), or home 
address or personal email to the extent it is not musical work 
copyright owner contact information required under 17 U.S.C. 
115(d)(3)(E)(ii)(III). The mechanical licensing collective shall also 
engage in reasonable, good-faith efforts to ensure that other 
personally identifying information (i.e., information that can be used 
to distinguish or trace an individual's identity, either alone or when 
combined with other information that is linked or linkable to such 
specific individual), is not available in the public musical works 
database, other than to the extent it is required by law.
    (h) Disclaimer. The mechanical licensing collective shall include 
in the public-facing version of the musical works database a 
conspicuous disclaimer that states that the database is not an 
authoritative source for sound recording information, and explains the 
labeling of information related to sound recording copyright owner, 
including the ``LabelName'' and ``PLine'' fields.


Sec.  210.32  Musical works database usability, interoperability, and 
usage restrictions.

    This section prescribes rules under which the mechanical licensing 
collective shall ensure the usability, interoperability, and proper 
usage of the public musical works database created pursuant to 17 
U.S.C. 115(d)(3)(E).
    (a) Database access. (1)(i) The mechanical licensing collective 
shall make the musical works database available to members of the 
public in a searchable, real-time, online format, free of charge. In 
addition, the mechanical licensing collective shall make the musical 
works database available in a bulk, real-time, machine-readable format 
through a process for bulk data management widely adopted among music 
rights administrators to:
    (A) Digital music providers operating under the authority of valid 
notices of license, and their authorized vendors, free of charge;
    (B) Significant nonblanket licensees in compliance with their 
obligations under 17 U.S.C. 115(d)(6), and their authorized vendors, 
free of charge;
    (C) The Register of Copyrights, free of charge; and
    (D) Any 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, which shall not be unreasonable.
    (ii) Starting July 1, 2021, the mechanical licensing collective 
shall make the musical works database available at least in a bulk, 
real-time, machine-readable format under this paragraph (a)(1) through 
application programming interfaces (APIs).
    (2) Notwithstanding paragraph (a)(1) of this section, the 
mechanical licensing collective shall establish appropriate terms of 
use or other policies governing use of the database that allows the 
mechanical licensing collective to suspend access to any individual or 
entity that appears, in the mechanical licensing collective's 
reasonable determination, to be attempting to bypass the mechanical 
licensing collective's right to charge a fee to recover its marginal 
costs for bulk access outlined in 17 U.S.C. 115(d)(3)(E)(v)(V) through 
repeated queries, or to otherwise be engaging in unlawful activity with 
respect to the database (including, without limitation, seeking to hack 
or unlawfully access confidential, non-public information contained in 
the database) or misappropriating or using information from the 
database for improper purposes.
    (b) Point of contact for inquiries and complaints. In accordance 
with its obligations under 17 U.S.C. 115(d)(3)(D)(ix)(I)(bb), the 
mechanical licensing collective shall designate a point of contact for 
inquiries and complaints with timely redress, including complaints 
regarding the public musical works database and/or the mechanical 
licensing collective's activities. The mechanical licensing collective 
must make publicly available, including prominently on its website, the 
following information:
    (1) The name of the designated point of contact for inquiries and 
complaints. The designated point of contact may be an individual (e.g., 
``Jane Doe'') or a specific position or title held by an individual at 
the mechanical licensing collective (e.g., ``Customer Relations 
Manager''). Only a single point of contact may be designated.
    (2) The physical mail address (street address or post office box), 
telephone number, and email address of the designated point of contact.


Sec.  210.33  Annual reporting by the mechanical licensing collective.

    (a) General. This section prescribes the rules under which the 
mechanical licensing collective will provide certain information in its 
annual report pursuant to 17 U.S.C. 115(d)(3)(D)(vii).
    (b) Contents. Each of the mechanical licensing collective's annual 
reports shall contain, at a minimum, the following information:
    (1) The operational and licensing practices of the mechanical 
licensing collective;
    (2) How the mechanical licensing collective collects and 
distributes royalties, including the average processing and 
distribution times for distributing royalties for the preceding 
calendar year;
    (3) Budgeting and expenditures for the mechanical licensing 
collective;
    (4) The mechanical licensing collective's total costs for the 
preceding calendar year;

[[Page 58190]]

    (5) The projected annual mechanical licensing collective budget;
    (6) Aggregated royalty receipts and payments;
    (7) Expenses that are more than 10 percent of the annual mechanical 
licensing collective budget;
    (8) The efforts of the mechanical licensing collective to locate 
and identify copyright owners of unmatched musical works (and shares of 
works);
    (9) The mechanical licensing collective's selection of board 
members and criteria used in selecting any new board members during the 
preceding calendar year;
    (10) The mechanical licensing collective's selection of new vendors 
during the preceding calendar year, including the criteria used in 
deciding to select such vendors, and any performance reviews of the 
mechanical licensing collective's current vendors. Such description 
shall include a general description of any new request for information 
(RFI) and/or request for proposals (RFP) process, either copies of the 
relevant RFI and/or RFP or a list of the functional requirements 
covered in the RFI or RFP, the names of the parties responding to the 
RFI and/or RFP. In connection with the disclosure described in this 
paragraph (b)(10), the mechanical licensing collective shall not be 
required to disclose any confidential or sensitive business 
information. For the purposes of this paragraph (b)(10), ``vendor'' 
means any vendor performing materially significant technology or 
operational services related to the mechanical licensing collective's 
matching and royalty accounting activities;
    (11) Whether during the preceding calendar year the mechanical 
licensing collective, pursuant to 17 U.S.C. 115(d)(7)(C), applied any 
unclaimed accrued royalties on an interim basis to defray costs in the 
event that the administrative assessment is inadequate to cover 
collective total costs, including the amount of unclaimed accrued 
royalties applied and plans for future reimbursement of such royalties 
from future collection of the assessment; and
    (12) Whether during the preceding calendar year the mechanical 
licensing collective suspended access to the public database to any 
individual or entity attempting to bypass the collective's right to 
charge a fee to recover its marginal costs for bulk access outlined in 
17 U.S.C. 115(d)(3)(E)(v)(V) through repeated queries, or to otherwise 
be engaging in unlawful activity with respect to the database 
(including, without limitation, seeking to hack or unlawfully access 
confidential, non-public information contained in the database) or 
misappropriating or using information from the database for improper 
purposes. If the mechanical licensing collective so suspended access to 
the public database to any individual or entity, the annual report must 
identify such individual(s) and entity(ies) and provide the reason(s) 
for suspension.

    Dated: September 4, 2020.
Regan A. Smith,
General Counsel and Associate Register of Copyrights.
[FR Doc. 2020-20078 Filed 9-16-20; 8:45 am]
BILLING CODE 1410-30-P