Politics & Policy

The Devil in the Details of the Music Modernization Act

Music-copyright reform is a worthy cause, but it has to be done right.

Recently, it was reported that members of Congress had come to a handshake agreement that brought the Music Modernization Act (MMA) one step closer to passage. By all accounts, the MMA is the first comprehensive legislation aimed at reforming music copyrights in decades. A rare coalition of music-industry professionals, including performing-rights organizations, terrestrial-radio conglomerates, digital-streaming services, tech companies, and music publishers supports the bill. While rarely agreeing on anything, these disparate groups have determined that the MMA is a step in the right direction for the music industry.

The MMA is now waiting for Senate majority leader Mitch McConnell to bring it to a vote. With lawmakers’ attention focused on November’s midterms, the bill’s proponents are concerned that the time to get it passed through this Congress is extremely limited. Amendments will slow down the process even further by requiring the House to pass the bill again before the Senate can finally vote. That’s why many of the organizations that support it are currently conducting drives to urge songwriters to convince their representatives to back its passage as-is.

But for the MMA, like any other product of government, the devil is in the details. The bill is a series of compromises that addresses some problems, ignores many more, and creates some new ones. Whether there is sufficient cause for worry to delay passage is a matter of opinion, but several issues are of particular concern to songwriters.

To fix problems pertaining to paying songwriters for their work in the streaming era, the proposed legislation mandates the creation of the Mechanical Licensing Collective (MLC). The MLC would, with full financial transparency, match copyright owners to compositions in a “searchable, online format free of charge.” A Digital Licensee Coordinator (DLC) would also be assigned to represent the interests of those who wish to purchase song licenses.

While this sounds surprisingly fair to songwriters, there are serious concerns about unfunded costs and who will be permitted to run these services on behalf of the government. The Congressional Budget Office estimates that over eight years, the MLC scheme will cost $222 million dollars while the new taxes generated from paying copyright holders will total only $175 million, leaving roughly $47 million unaccounted for. Where will that money come from?

As it stands now, language within the MMA also seems to direct the U.S. Copyright Office to select those possessing the highest market share in the music-licensing and -licensee world to run the MLC. Although providing a sweet deal for the anti-competitive performing-rights organizations and tech giants that spend tens of billions on lobbying expenditures annually, these provisions will become a headache for start-ups and songwriters if passed into law.

In free markets, start-ups must perfect their products and services in order to compete. Those vying for work in the MLC and DLC would be motivated to have a comprehensive understanding of the needs of songwriters. Google, Amazon, Facebook, and other high-market-share companies dabble in the music world, but it’s not their specialty. These corporate behemoths have repeatedly demonstrated that their interests are in direct opposition to those of songwriters, whose needs they seem not to understand.

Texas senator Ted Cruz wants assurances that the proposed MLC would not become yet another inefficient government body gifted with a regulatory monopoly. His proposal would enable private businesses to compete as vendors.

As a songwriter and recording artist with four albums of self-published work celebrating our nation’s founding principles, I find the idea that different media should pay drastically different rates for playing my music under the MMA both arbitrary and absurd. But while the proposal is not the best deal possible for songwriters, it is certainly a better one than the system that exists now.

Members of Congress have two choices: Allow the MMA to pass as-is with the hope of addressing the remaining problems at a later time or demand both transparency and competition and delay passage of the MMA until at least next year. The clock is ticking. Here’s hoping that our representatives do what they were elected to do and stand up for free-market competition before it’s too late.

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