Copyright Office Initiates ‘Periodic Review’ of the MLC’s Designation, Sets May 29th Deadline for Initial Public Comments

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Washington, D.C.’s James Madison Memorial Building, which houses the U.S. Copyright Office. Photo Credit: UpstateNYer

The U.S. Copyright Office (USCO) has officially initiated its first “periodic review” of the designations of the Mechanical Licensing Collective (MLC) and the Digital Licensee Coordinator (DLC).

The USCO announced the review, required under 2018’s Music Modernization Act (MMA), via a Federal Register notice; the MLC acknowledged the development with a concise release. While the USCO designated the MLC to administer the MMA-established blanket license back in 2019, the same law compels the government entity to review said designation (and that of the DLC) every half of a decade.

Now, as part of this review, the USCO has given the MLC and the DLC until April 1st (specifically at 11:59 PM EST, as is also the case with each of the below deadlines) to forward their “initial submissions,” per the appropriate Register notice.

The public, on the other hand, has until May 29th to provide written comments to the USCO, with follow-up statements due by June 28th. Finally, the MLC and the DLC will then be able to respond with different submissions yet until July 29th, according to the Register.

Notably, the breakdown of information sought by the USCO from the Mechanical Licensing Collective spans multiple pages and is perhaps best summarized with a quick list. The USCO has inquired about topics including but not limited to:

— Whether the MLC still constitutes a non-profit and whether it has the support of the majority of copyright owners

— A “detailed description explaining how the Mechanical Licensing Collective has the administrative and technological capabilities to perform its required functions,” particularly when it comes to unclaimed royalties

— All manner of information about the MLC’s effectiveness in matching royalties, including its “distribution rate (i.e., the total amount of royalties matched and paid to the Mechanical Licensing Collective’s members, compared to the total royalties reported by DMPs)”

— Various “efforts the Mechanical Licensing Collective has undertaken to enhance database and claiming portal functionality,” besides plans to handle disputes and overclaims within said portal

— How the MLC “has employed systems with APIs to support data exchange to date”

— Steps the MLC “is taking to protect against the incidence of fraudulent ownership claims and frivolous ownership disputes”

— Additional information about the MLC’s vendors, including a growing number of proper companies

— Details pertaining to the MLC’s “procedures to safeguard its use of the assessment funds against abuse, waste, and other unreasonable expenditures

Of course, given the “black-box royalties” criticism of the MLC (which has faced other scrutiny as well), evidence suggests that the public will have much to say throughout this lengthy process.

Whether these remarks and an examination of the above-noted information will prove enough to change what appears the review’s likeliest outcome – a rubber stamp for the MLC’s ongoing designation – remains to be seen.

In any event, the MLC, which is said to have paid out almost $1.7 billion in royalties since April of 2021, took the opportunity to tout the timing of its distributions (it’s “continued to distribute monthly royalty distributions, all of which have been on time or early”) and more.

“We welcome the announcement of the Register of Copyrights commencing the first review of The MLC’s designation as required by the MMA,” Mechanical Licensing Collective CEO Kris Ahrend added. “We are confident that this review will confirm that The MLC continues to meet all of the criteria set out in the MMA, while affording us the opportunity to highlight the many successes our team and our stakeholders have achieved since launching The MLC’s full operations.”