Reform Proposals

We have outlined the problems with the current licensing regime under Section 115 of the Copyright Act—but what are the potential solutions? Several reforms have been proposed over the years, ranging from a complete elimination of the license in favor of marketplace-driven negotiations to smaller changes that would only require clarification of specific ambiguities in the scope of the license. Here are a few of the more notable proposals.

Elimination of the License

In her testimony before the House Subcommittee on Courts, Internet and Intellectual Property, Marybeth Peters, the U.S. Register of Copyrights, proposed a complete elimination of the Section 115 license. The Register argued that the license limited the bargaining power of authors. She explained that the performance rights societies—ASCAP, BMI and SESAC—have functioned efficiently without a compulsory license and the same model should be adopted for licensing mechanical rights. Expanding on this testimony a year later, the Register proposed the introduction of the 21st Century Music Reform Act. Under this Act, Music Rights Organizations (MROs) would be created with the right to license performance, reproduction and distribution rights. Thus, the functions performed by ASCAP, BMI, SESAC and The Harry Fox Agency would all be subsumed by one entity. This would eliminate the need to license different rights from different entities in order to use one piece of music.

Unilicense

This proposal was put forth by the Songwriters Guild of America in 2005. The Guild proposed a blanket license for licensing reproduction, distribution and performance rights. The royalty would be 16 and 2/3 percent of the gross Internet subscription revenues with a minimum dollar fee as the floor. Songwriters and publishers would each share 50 percent of the royalties. This proposal, like the 21st Century Music Reform Act, would provide for one-stop shopping for all rights needed to transmit a piece of music.

Shifting the burden to record companies

Another proposal put forth by the Copyright Office was to shift the burden of obtaining a license to transmit a DPD to the record company. Register Peters, in her testimony before the House Subcommittee on Courts, the Internet and Intellectual Property, explained that current law allows record companies to seek permission from recording artists, in their contracts, to make music available through DPDs. This provision could be clarified and expanded upon to funnel payments for DPDs through record companies.