The Devil in the Details of the Music Modernization Act

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Recently, members of Congress reportedly came to a handshake agreement that has brought the Music Modernization Act one step closer to passage. By all accounts, the MMA is the first comprehensive legislation in decades to reform music copyrights.

A rare coalition of music industry professionals, including performing rights organizations, terrestrial radio, digital streaming services, tech companies and publishers, supports the bill. While rarely agreeing on anything, these disparate groups have determined it’s good for songwriters, a step in the right direction, and born of good intentions.

The bill is awaiting Senate Majority Leader Mitch McConnell (R-Ky.) to bring it up for a vote on the Senate floor. With attention soon moving toward the November elections, 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 it 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 support it as-is.

However, like any product of government, the devil is in the details. The MMA is a series of compromises that addresses some problems, ignores many more and creates some new ones. Whether these are sufficient 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 with full financial transparency to match copyright owners with compositions through a “searchable, online format free of charge.” It also assigns a digital licensee coordinator 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, it will cost $222 million while the new taxes generated from paying copyright holders are estimated at only $175 million, leaving roughly $47 million that needs to be funded or otherwise threaten further delays. Who’s going to pay for it?

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 new music collective. Although providing a sweet deal for the two major performing rights organizations and companies like Google, Amazon and Facebook, which spend millions on lobbying expenditures annually, these provisions will become a headache for startups as well as for songwriters if passed into law.

In free markets, startups must perfect their products and services in order to compete. Those vying for the 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 behemoth companies fail to understand the needs of songwriters.

Equally important are accusations that large companies may censor political ideas they disagree with. Why would our representatives reward them for this by granting them a monopoly over music services and creating even more problems for the songwriters that the MMA was designed to help? As a songwriter and recording artist with four albums of self-published works celebrating the importance of our founding principles, the potential for censorship is of particular concern.

Texas Sen. Ted Cruz (R) wants assurances that the proposed MLC would not become yet another government body granted a monopoly that operates with the efficiency of an Obamacare-type health exchange. His proposal would enable private businesses to compete as vendors.

Members of Congress have two choices, but they’re running out of time: Allow the MMA to pass as-is with the hope of addressing the remaining problems at a later time, or demand more transparency and competition now.

The interests of songwriters and startups should always come before financial protectionism for big businesses. Here’s hoping that our representatives do what we hired them for and stand up for market competition before it’s too late.

Matt Fitzgibbons, an award-winning singer-songwriter, is a political commentator and freelance journalist that has appeared on a number of talk radio shows across the country, and he is also the founder of PatriotMusic.com and owner of LibertyWebMarketing.com.