The US Copyright Office has initiated the first five-year review of two music licensing entities established by the Music Modernization Act of 2018: The Mechanical Licensing Collective (MLC) and the Digital Licensee Coordinator (DLC).
The MMA was signed into law by then-President Donald Trump in October 2018. The law reformed mechanical licensing through the creation of MLC, a nonprofit organization that facilitates royalty payments to songwriters and publishers for the use of their works by digital music services in the US.
The DLC, meanwhile, represents digital service providers (DSPs) in matters related to the administration of the MMA’s blanket compulsory license, which allows eligible services to use copyrighted music for a set fee.
Both entities were initially designated by the Copyright Office in 2019. Under the MMA, a periodic review is required every five years, starting this year.
The law requires the Register of Copyrights to conduct a periodic review of The MLC and DLC, and publish a notice of the review in the Federal Register. It will subsquently be published every five years in January.
“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.”
Kris Ahrend, MLC
The MLC and DLC are permitted to submit statements supporting their ongoing designation by April 1. Members of the public can file comments on these submissions until May 29, with an opportunity to respond to initial public comments until June 28. The MLC and DLC can reply to comments by July 28.
The Register holds the authority to conduct additional proceedings as deemed appropriate. While it can either continue the designation of The MLC or DLC or make new designations, it is restricted from altering MMA provisions, governance structures, or blanket license royalty rates and terms.
Following the conclusion of the proceedings, the Register will publish a decision in the Federal Register along with the rationale behind it.
During the initial designation process in 2019, The MLC was the sole entity that met all criteria outlined by the MMA for qualification. Presently, in its fourth year of operations, The MLC has disbursed nearly $1.7 billion in royalties since the first distribution in April 2021, according to a press release on Tuesday (January 30).
In late October, The MLC said it paid out over $1.5 billion to songwriters since its inception, indicating that $200 million has been paid from November to January.
“We welcome the announcement of the Register of Copyrights commencing the first review of The MLC’s designation as required by the MMA,” said Kris Ahrend, The MLC’s CEO.
“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,” Ahrend added.
Earlier this month, The MLC issued notices of intent to conduct audits of Digital Service Providers (DSPs) that started operating under the compulsory blanket license administered by the collective in 2021. The MLC sent audit notices to nearly 50 DSPs including Spotify, SoundCloud and Apple Music.
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