US House Judiciary Committee Approves Landmark New Copyright Package Seen Likely To Advance

American songwriters and performers achieved a rare feat in a highly polarized and partisan political environment: unite policymakers from all sides of the House of Representatives, and even get on board tech companies and broadcasters to support the most significant piece of copyright legislation in the United States since the 1998’s Digital Millennium Copyright Act (DMCA).

[Update: on 25 April, the House of Representatives unanimously approved the legislation, by vote of 415-0).

On 11 April, the House Judiciary Committee approved by a unanimous vote of 32-0 the Music Modernization Act (HR 5447), a bipartisan legislation that updates several key provisions of US copyright law regarding music licensing.

The MMA package, introduced by Chairman Bob Goodlatte (R-VA) and Ranking Member Jerrold Nadler (D-NY), is the combination of several different proposed bills that were introduced in the past couple of years – the Music Modernization Act (dealing with music mechanical licenses), the CLASSICS Act (introducing copyright for pre-1972 recordings) and the AMP Act (providing for the first time royalties for music producer and engineers). It was described by Goodlatte as “a comprehensive music licensing reform package.”

The proposed legislation, which will now go to the House floor for vote in the next couple of weeks, and then to the Senate, is the result of a review process started six years ago by Goodlatte which included dozens of hearings from stakeholders. It is also the product of intense behind the curtains negotiations between music industry groups – such as the National Music Publishers’ Association (NMPA) and the Recorded Music Industry Association of America – and legislators on Capitol Hill as well as with organisations representing music content users such as the Digital Media association (DIMA), the umbrella for digital music platforms such as Spotify, Amazon, Google, Apple and Pandora, among others.

Goodlatte said the committee passage of the bipartisan Music Modernization Act was “the culmination of the House Judiciary Committee’s comprehensive multi-year review of our nation’s copyright laws, as well as years of effort by interested stakeholders and many members of our Committee.” Goodlatte said the MMA was the first major update to US music licensing laws in decades that will help ensure that American music creators are properly recognized and rewarded for their works. The package, he added, “brings early 20th century music laws for the analog era into the 21st Century digital era.”

In his remarks during the Judiciary’s discussion on the proposed legislation, Nadler said the package will “finally resolve some longstanding inequities and inefficiencies in the music marketplace.” He added, “It is no small achievement that we have been able to resolve some very complex and sensitive issues to get to this point.” Nadler praised the process that led to the landmark legislation, in particular the “unprecedented level on consensus that marks a new era of collaboration” between stakeholders.

“You are about to accomplish something that has not been done in decades,” he said to a crowd that included many of the parties involved.

The MMA reforms Section 115 of the US Copyright Act dealing with mechanical reproduction rights, which have been a source of friction between rights holders and users of music. The new law will introduce for the first time a blanket licensing system to provide digital services a license covering the use of all the music repertoire on the composition side. A new single licensing entity will be created to administers the mechanical reproduction rights for all digital uses of musical compositions on interactive streaming services such as Apple Music, Spotify, Amazon Music, Pandora, Google Play and others. For digital services, the blanket license will provide a safety mechanism, preventing them from being sued by rights holders, as is the case now, if they do not identify copyright owners.

Key Issue Outstanding

One of the key issues not solved yet is the representation of rights holders at the board of the new Mechanical Licensing Collective or MLC. The current law would assign ten voting seats to members coming from the music publishing sector, and four for songwriters, with three non-voting members: one from a non-profit trade association of music publishers; one from the digital licensee sector; and one from a representative from a trade association acting on behalf of songwriters. Some songwriters such as Maria Schneider have complained that songwriters were under-represented on the board on the MLC.

The MMA also repeals Section 114(i) of the US Copyright Act which dealt with rate-setting for performance rights administered by rights societies ASCAP and BMI. Rather than having to deal with assigned judges, the new legislation calls for random assignment of judges to decide on ASCAP and BMI’s rate-setting cases.

The new bill would also require a market-based rate standard for sound recordings for statutory licenses. The Copyright Royalty Board, which is tasked with setting rates for statutory services, would be able to consider the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller.

The CLASSICS Act (Compensating Legacy Artists for their Songs, Service, & Important Contributions to Society Act) introduces copyright for recordings made before 1972 and played by digital radio services such as Pandora and Sirius XM. The administration of these royalties would be handled by neighbouring rights society SoundExchange that would distribute royalties for pre-’72 recordings played by internet, cable and satellite radio services just as it does for post-’72 recordings. Currently only sound recordings made after 1972 receive payments from digital radio services under federal law.

The AMP Act (Allocation for Music Producers Act) would introduce for the first time royalties for music producers and engineers from the use of recordings they were involved with. It ensures that record producers, sound engineers, and other creative professionals receive compensation for their work.

Not included in the package are performance rights for recordings used by terrestrial radio and the creation of a small claims tribunal (CASE Act ). Nadler, who is the sponsor of the Fair Play Fair Pay Act, which aims to introduce performance on sound recordings for terrestrial radio, lamented that “not included in this bill, unfortunately, is the creation if a terrestrial performance right.” He added that this oversight was result of timing, as the National Association of Broadcasters and the MusicFirst coalition are currently engaged in a discussion to discuss the matter. Nadler said he was “confident” that the parties “will continue to negotiate in good faith.”

Nadler also came in support of the CASE Act with “hopes to see markup in near future.” Goodlatte noted that the copyright small claims was a very important issue and would be especially vital for photographers and visual artists.

Courts, Intellectual Property, and the Internet Subcommittee Vice Chairman Doug Collins (R-Ga.), who with Rep. Hakeem Jeffries (D-N.Y.) introduced the MMA, said the 32-0 vote from the Judiciary Committee paves the way for the legislation to receive a vote on the House floor. “I’m proud to see the Judiciary Committee pass this legislation with overwhelming industry consensus and bipartisan support, and I hope to see the House vote soon to usher in the most significant music licensing updates of our generation,” said Collins, who also highlighted that the legislation was backed by many different groups, “some of whom wouldn’t even sit in the same room at the start of the process.”

Industry Praise

The Judiciary Committee’s vote was welcomed by all sides of the music industry. David Israelite, President & CEO of the NMPA, who has been extremely active in building industry consensus on this legislation, said the vote was “a critical step towards finally fixing the system to pay songwriters what they deserve.”

Cary Sherman, Chairman & CEO of the Recorded Music Association of America, echoed the same sentiment: “As this historic legislation begins to advance through Congress, we move one step closer to the finish line. A unanimous vote should send unmistakable signal to lawmakers in both chambers: this package of reforms enjoys deep, bipartisan support.”

Chris Harrison, CEO of DiMA, noted that the MMA would bring “greater transparency” and created a blanket license, which he said would be “critical to a modern licensing system” and would help fix an “outdated and inefficient music licensing system that no longer serves fans of music or creators.” He added, “Streaming services have literally saved the music industry, delivering better experiences at a better value, and growing revenue for creators. We are glad to see Congress is looking to the streaming future, and moving away from the music mess of the past.”

The copyright package was also welcomed by NAB President/CEO Gordon Smith, who said it represented “a level of compromise and consensus on music licensing issues that has eluded lawmakers for decades.” And probably with a sigh of relief, Smith praised Goodlatte,  Nadler, Collins, Jeffries, and Issa, for working “diligently to ensure that free, local, over-the-air broadcasters would not be harmed by this legislation.”

The Content Creators Coalition (c3), which regroups songwriters and performers, said the Act was “the most important legislation for musicians and songwriters in 20 years” that would “make the music ecosystem stronger and fairer.” c3 added, “It is nothing short of a major victory for artists – for performers, songwriters, and music creators of all stripes. The legislation ensures fair pay for older artists, better pay for all performers when music is played on SiriusXM, and moves forward with critical reforms to help songwriters.”

 

Image Credits: Twitter