The Mother’s Milk of Algorithms: Google Expands Its Data Center Lobbying Footprint in Minnesota–Home to Senator Amy Klobuchar

January 14, 2019 Comments off

Data profiling requires a lot of computing power.  Really a whole bunch.  When you’re talking that much electricity, you’re talking government.  When you’re talking government, you’re talking lobbying.

And in this case, looking at the political landscape from the data center point of view might explain a whole lot of oddball results.  Like why do Senators from Oregon and Nebraska seem ready to abandon their constituents in favor of a bunch of out-of-staters that don’t have another connection to their states?  And which moves are Google making now that might position them to be influential again in US presidential politics in 2020 and also be bad for the creative community?  Maybe having juice all comes down to having the juice.

When Google and Facebook are scraping all your personal information and hosting all that user-generated pirated content, they need to really work over their algorithms.  Bigly.  And crunching algorithms requires gigantic data centers and gigantic data centers don’t run on magic elves.

No, electricity is the mothers milk of algorithms and electricity doesn’t come from magic elves generating special energy on treadmills imported from the Undying Lands.

How much electricity does it take for Google to invade your privacy…sorry…be Google?  Google has not, to my knowledge, updated its voluntary 2011 disclosures on energy use. In 2011, Google’s continuous energy needs were roughly what it would take to power 200,000 homes in the U.S.–say Salt Lake City, Yonkers or Little Rock.  Approximately 80% of that electricity is Google’s data centers.  And that was eight years ago.  According to a 2016 feature in the Guardian, Google accounts for the lions share of approximately 2% of greenhouse gas emissions in the world that power data centers.  That’s right–the world.  So presumably the reason they haven’t updated those 2011 disclosures is because the Google climate news isn’t good.

Google would like you to believe that they offset their carbon footprint through investing in renewable energy, which they do to a degree.  But the people who really do the big investing in Google’s renewable energy needs are not just Google–they are that old standby, the old reliable for corporate welfare, the innovator of last resort.  That’s right.

You.

We’ll come back to how you do that in a minute, but rest assured.  You won’t be shocked, shocked.  And we’ll always have Paris.

Regardless of who’s building their infrastructure, Google’s energy drain would make Google a very big electricity customer–very big.  And then there’s Amazon and Facebook, too.  Internet Association types, you get the idea.  (Someone has to pay for Michael Beckerman’s $4,000 shoes.)

My bet is that the demand for electricity to run those algorithms needs to be spread out so hopefully nobody will notice the affect on the climate that the Silicon Valley party is having.  This is due to the massive draw down of electricity and the crowding out of local users in the lucky localities where the taxpayer pays Google to locate their data centers.  Where these data centers are located can create considerable political leverage for the already over-leveraged Google.

Let’s take a look at the most recent example, Google’s new data center in Minnesota, home to Senator Amy Klobuchar. (Senator Klobuchar was included in the recent list of potential 2020 Democratic Party presidential candidates in Politico.)  Senator Klobuchar is–or at least was–a long-time ally of artists in the U.S. Senate.

According to Minnesota Public Radio, the biggest utility in Minnesota is selling over 300 acres of land to Google to locate a new $600 million data center in the city of Becker, Minnesota not far from Minneapolis.  Fair market value, right?  Maybe not.

After the data center is built, Google will immediately become one of the utility’s five largest customers.  Although the utility “plans” to have “most” of Google’s data center needs met by renewable energy by 2050, it currently operates the largest coal-fired generator in Minnesota and is scheduled to replace that plant with a natural gas facility in the near future.

In order to get that natural gas plant paid for and opened, former Governor Mark Dayton side-stepped the customary process before the Minnesota Public Utilities Commission.   How?  Google’s favorite method of avoiding local elected officials–lobbying the state legislature.

What a coincidence.

And why was that new plant so important?  According to local press, “[p]roponents say the legislation [authorizing the natural gas generator] is necessary to stabilize the Sherburne County economy, which will be hurt by the coal generators’ demise.”  Sounds important.  Sounds like back scratching–we can only get Google to move here if we get rid of coal, and we can’t get rid of coal without spending some more of the taxpayers’ money–not Google’s money, your money–on a new power plant.

How do you think the Mayor of Becker (population 4,568) feels about Google coming to her town?  Think she’ll get in the way after the Governor and the state legislature have already mandated what is to go down?  Because the county economy is dependent on the new power plant and the new power plant will in large part be dependent on Google.

Do data centers produce a huge number of jobs that might justify paying a company like Google to move to Becker, Minnesota?  Not once they’re built--“the Minnesota Department of Employment and Economic Development said the…data center would involve 2,000 construction jobs and employ about 50 full-time workers.

That’s right–50 jobs.  So we build you a power plant and you give us…50 jobs.

This is about the same result as Senator Ron Wyden enjoyed from the data centers built in The Dalles along Oregon’s Columbia River watershed.  (That would be the same Ron Wyden who is the former chair of the United States Senate Finance Subcommittee on Energy, Natural Resources, and Infrastructure….  No connection, I’m sure.)

But it seems that a handful of jobs is worth poking his finger in the eyes of the Oregon music community in Portland and beyond by consistently opposing fair copyright reforms and protecting Google’s cherished Section 230 safe harbor–which he’s proud to tell you he wrote.  It’s also worth opposing the Stop Enabling Sex Trafficking Act and generally being as close to Google as one is to two.

You might also find that Nebraska’s wind farms explain Senator Ben Sasse’s sudden interest in screwing pre-72 artists in line with Google’s desire to block the CLASSICS Act, particularly when you find out that Nebraska is in an internecine struggle with neighbor Iowa to get another of Google’s data centers.

So the question is–now that Google is building a data center in Minnesota, will we discover that Senator Klobuchar and her colleague Tina Smith are suddenly finding that protecting Minnesota artists like Jimmy Jam, Terry Lewis,  Sounds of Blackness, Prince and that Zimmerman kid from the ravages of multinational corporations is just not their thing after all?

 

 

@Europarl_EN Statement Explains Article 13 and Google’s Fake “Lobbying”

January 12, 2019 Comments off

This week the European Parliament issued a scathing rejection of Google and Facebook’s massive lobbying campaign against Members of the European Parliament over what’s often called “Article 13”, or the Directive on Copyright in the Digital Single Market.  Article 13 is the first meaningful attempt to reverse the European safe harbor income transfer and close the value gap.  

Europe’s Global Influence

Beyond its benefits inside the European Union, Article 13 is also a crucial step toward restoring creator rights outside Europe.  Passing this watershed legislation will be in important first step toward safe harbor reform around the world, hopefully as a positive influence on reforming the U.S. version commonly called the “DMCA” copyright infringement safe harbor. Congress may well pick up that DMCA safe harbor reform in this session.   

Another benefit to Article 13 is that it’s another step toward encouraging legislative bodies to continue closing Big Tech’s cherished loopholes in other areas of the law, such another U.S. loophole beloved by Big Tech that is commonly called “Section 230.”   Congress cut back Section 230 last session.

Section 230 not only allows Google to profit from a wide variety of non-controversial behavior, but also from human trafficking, illegal drugs and counterfeit goods.  Google’s Section 230 safe harbor was significantly rolled back with the Stop Enabling Sex Trafficking Act (“SESTA”) in the last Congress.  Google fought SESTA with by launching an “off the shelf” SOPA-style, faux apocalyptica, end-of-days campaign against the U.S. Congress to preserve their human trafficking profits and stop “SESTA”, but failed.

European Commission is Also Closing De Facto Loopholes

The European Parliament historic action on Article 13 likely was of particular concern to Google because the European Commission has been closing a de facto safe harbor that protected Google’s obscene commercial overreach.  The EC brought the first two of what may be many cases against Google for competition law violations with fines in the many billions of euros.  The most recent fine in those competition law cases came down days after the first of a series of votes on Article 13.  Personally, I feel that all these events must be read of a piece.

European Parliament Tells Us That Goliath Never Learns

Google’s response to all of them appears to me to also be of a piece—barrages of fake emails and robocalls to deceive MEPs into thinking there were actual constituents who supported safe harbors for multinational U.S. corporations that violate privacy and steal culture.  (If there were real constituent voices they were drowned out or irreparably tainted by Google’s fake lobbying.)

Of course, it must be said that Big Tech’s barrage of fakery was as much directed at artists as it was at elected officials.  The campaign against Article 13 is remarkable for how much it revealed that  Big tech is as out of step with cultural history in the countries where it does business as it is failing with honest advocacy.

The fakery has gotten so bad that the European Parliament found the need to release a “myths and facts” style question and answer document regarding Article 13.  Here’s a choice passage:

The draft directive has been the subject of intense campaigning. Indeed, some statistics inside the European Parliament show that MEPs have rarely or even never been subject to a similar degree of lobbying before (such as telephone calls, emails etc.). The companies to be most affected by the directive have multi-billion dollar yearly revenues (for example Google’s revenue for 2017 was $110 billion and Facebook’s was $40.7 billion).

Such wide-ranging campaigning generally does lead to impressive claims snowballing; there are claims that the draft directive risks “breaking the internet”, or “killing the internet”. Since the draft directive does not confer any new rights on creators, nor impose new obligations on internet platforms/news aggregators, such claims seem excessive.

There are numerous precedents of lobbying campaigns predicting catastrophic outcomes, which have never come true.

For example, telecom companies claimed phone bills would explode as a result of caps on roaming fees; the tobacco and restaurant lobbies claimed people would stop going to restaurants and bars as a result of the smoking ban in bars and restaurants; banks said they would have to stop lending to businesses and people, due to tougher laws on how they operated and the duty-free lobby even claimed that airports would close down as a result of the end of duty-free shopping in the single market. None of this happened.

The document comes down to this—the Parliament is not buying Google’s jive.  Let’s hope the U.K. Parliament and the U.S. Congress take note.

Europe Defends the Human Rights of Artists

For most of the 20th century, the world shared values that authors rights were to be respected and even cherished.  These values were passed into international laws that protected creator rights.  Authors rights are human rights and authors rights are memorialized in a host of human rights documents from the U.S. Constitution to the Universal Declaration of Human Rights and well beyond.  

Those rights were largely defended and violators of those rights were reviled.  A country’s treatment of artists from writers to poets to musicians and composers, screenwriters and directors defined that society. Crackdowns were shameful events, from the Red Scare to the gulags, from Tiananmen Square to the Arab Spring.

But when profit from violating the rights of authors becomes too tempting, the siren call of greenbacks breaks down what you learned from parents, teachers, rabbis, priests or pastors or even the very secular culture under attack.  In the 1990s and to the present day, a group of commercial actors in the Internet space demanded that they be given a special mandate in which to operate—a Neverland of legislated “safe harbors” ostensibly to protect the sainted innovation.  

Largely based in the Silicon Valley protectorate and backed by venture capitalists, these folks wanted a kind of autonomous or near-autonomous zone where the human rights of authors could be abridged and outright violated, largely with impunity.  Why?  Make no mistake, they didn’t do it for “freedom,” exploration of new frontiers, innovation or substantial non infringing uses—they did it for the money.

In fact, taking an inverted page straight out of Tom Wolfe’s Radical Chic and Mau-Mauing the Flak Catchers, violating the human rights of authors even became fashionable in the fast-buck, get big fast world of the dot bomb redshift of money, money, money.  Artists who expected their human rights would be at least tolerated by the anarcho-technocrats of the 99ers got a big surprise.  Imagine the hell-bent Kafka-esque spawn of Bill Jackson’s Youth of the Future and George Orwell’s Ministry of Truth.  The mish mash elites of Creative Commons, the Electronic Frontier Foundation and the Free Software Foundation sprang up from their Palo Alto petrie dish to mau-mau both Hollywood and Silicon Valley.  They gave us a mantra straight out of Orwell’s Minitrue:  WAR IS PEACE, FREEDOM IS SLAVERY and of course COPYRIGHT IS CENSORSHIP.

These first-generation Californian startup elites didn’t know Lawrence Ferlinghetti from Carol Doda or Sam Andrew from Neil Cassidy.  They didn’t know the Henry Miller’s Rosy Crucifixion series, but they knew all about the rights, preferences and privileges of the Series A.  They went to Silicon Valley for the same reason Willie Sutton robbed banks—because that’s where the money was.

And thus began in 1998 one of the biggest income transfers in commercial history that continues to this day.  But after 20 years, the tech bros who wouldn’t grow up may find that the world has had enough of their hysteria and heartlessness and that spring cleaning time has come for them.

MTP Podcast: Spotify’s Direct Public Offering

January 10, 2019 Comments off

 

Chris Castle explains Spotify’s direct public offering (compared to a traditional IPO) and commentary on how the stock is performing (NOT investment advice).

According to the Spotify Case Study:

As of March 28, 2018, the average first-day return for 2018 IPOs was 13.2%. [4] On April 3, 2018, when Spotify opened for trading on the NYSE, the NYSE’s initial reference price that was published to the market pre-trading was US$132.00 per share the opening price of the shares was US$165.90 per share, or approximately 25.7% higher than the NYSE reference price. Trading in Spotify’s shares closed at a price of US$149.01 per share, which was approximately 10.2% below the opening price and 12.9% above the reference price….Spotify disclosed recent high and low sales prices per share in recent private transactions on the cover page of the preliminary prospectus and the final prospectus [to arrive at the reference price of $132].

Spotify Buyback

Spotify Case Study: Structuring and Executing a Direct Listing 

MusicTech Solutions: Why Will Spotify’s Price Tank?

Barrons: Spotify Stock Is Up This Year, but Analysts Say Don’t Get Too Excited

Spotify stock, up almost 6% this year, have dropped about 27% in the last 3 months, more than twice as far as theS&P 500’s decline.

On Monday, Stifel’s John Egbert reiterated a Buy rating on the stock, while lowering his target price to $170 from $210. That’s in part based on his estimate of the fair value of its stake inTencent Music Entertainment (TME). But he also trimmed some margin estimates based on the likely costs of global expansion.

“We remain bullish on Spotify’s subscriber growth prospects and believe the company could deliver upside to our 2019 subscriber addition forecast of 24 million, particularly if newly (and soon-to-be) launched markets become material,” Egbert wrote.

Deutsche Bank ’s Lloyd Walmsley maintained a Hold rating on the shares, cutting his price target to $135 from $152 in a Sunday note. Nomura Instinet’s Mark Kelley, meanwhile, wrote Sunday that Spotify was “among the most oversold stocks in our coverage.”

Spotify SEC Ruling on Reference Price for SPOT shares

Postdicting the Future: Five Things Congress Could Do for Music Creators That Wouldn’t Cost the Taxpayer a Dime from The Hill

January 8, 2019 Comments off

[This is a July 30, 2013 summary from The Hill of my series that first appeared in the Huffington Post on July 26, 2013–let’s see how I did after the Music Modernization Act.]

1.  Create an Audit Right for Songwriters for Compulsory Licenses:  One of the oldest compulsory licenses in the Copyright Act is the “mechanical license”, the statutory mandate forcing songwriters to license songs that dates from 1909.  The government mandates the license and also mandates the rate that songwriters are paid—from 1909 until 1977 that rate was set at 2¢ per recording.  Although that rate was eventually indexed to inflation leading to the current 9.1¢ minimum, songwriters had to dig out of a deep hole.

Getting paid is another story.  This statutory license requires songwriters be sent “statements of account” for royalties—but songwriters are not allowed to conduct a “royalty compliance” examination (called an “audit”).  The law requires a company officer and a CPA to certify the company’s statements—a practice rarely complied with.  As recently demonstrated by Aimee Mann’s lawsuit against Medianet, if songwriters don’t get paid there’s not much they can do except sue—a costly process.

The government tells the songwriter “trust—but don’t verify.”  This is an easy fix.  Congress could give songwriters an audit right as they did for stakeholders in the contemporary digital performance compulsory license for satellite radio and Internet radio.

2.  Allow Artists and Songwriters to Opt Out of the Compulsory License:  The recent blow-up regarding the so-called “Internet Radio Fairness Act” and the related ASCAP and BMI rate court proceedings should let the Congress know that there are many artists and songwriters who want to be able to decide who gets to license their songs.  Again, the digital performance compulsory license allows copyright owners to control “interactive” uses of their works—why not at least do the same for the mechanical license as well?

3. Require Digital Royalties for pre-72 Sound Recordings:  Sound recordings did not receive federal copyright protection until 1972.  When the Congress established the digital performance royalty, it seemed to clearly apply to all recordings and did not arbitrarily exclude recordings prior to 1972.  However, this “gotcha” is used by SiriusXM and others to avoid paying great American artists whose records were released before 1972—jazz, R&B and rock legends get nothing.  Congress could fix this “gotcha” and secure a fair share of digital performance royalties to these authors of our musical heritage.

4.  Require All Unpaid Statutory Mechanical Royalties Be Paid to the State Unclaimed Property Offices:  As Aimee Mann’s alleged in her lawsuit against the white label provider Medianet, witnesses stated that 23 percent of the songs used by Medianet are unlicensed—which could easily be millions of songs if true.  And there are likely a number of digital music services that are arbitrarily holding unpaid royalties in an unauthorized “escrow.”

It seems that there could be substantial royalties controlled by the very retailers who must pay songwriters under the law, a potentially significant moral hazard.  Congress could require that any “escrowed” royalties be paid over under State unclaimed property laws—a lawful “escrow.”

5.  Require that Online and Offline Videos Follow the Same Rules:  As online video platforms become available through Internet enabled home televisions, attention should be paid to a frequently overlooked category of songwriter—the film and television music composers.  Current reporting by online video platforms makes it difficult for score composers to be paid for their work.  The Congress may well ask whether those who seek to replace television should be held to the same licensing standards as television.

These are but a few ideas the Congress could be addressing that might make a difference in the lives of artists and songwriters and would cost the taxpayer very little.  All leverage existing structures and bureaucracies, eliminate “gotchas,” and help to reduce the unintended consequences of government mandated compulsory licensing.

ALI’s Restatement of Copyright Scandal

January 7, 2019 Comments off

Shownotes for Restatement Scandal:

Justice Scalia provides us with an explanation of what the “modern Restatement” is (Kansas v. Nebraska, 574 U.S. ____ (2015) (Scalia, J. concurring in part, dissenting in part):

I write separately to note that modern Restatements—such as the Restatement [at issue in the case at bar]—are of questionable value, and must be used with caution. The object of the original Restatements was “to present an orderly statement of the general common law.” Restatement of Conflict of Laws, Introduction, p. viii (1934). Over time, the Restatements’ authors have abandoned the mission of describing the law, and have chosen instead to set forth their aspirations for what the law ought to be….And it cannot safely be assumed, without further inquiry, that a Restatement provision describes rather than revises current law.

ali status copyright restatement

ALI Restatement of Copyright Progress Status (note no chapters have been approved)

American Law Institute, Restatement of Copyright project

Restatement of Copyright Participants

Samuelson Letter to ALI Requesting Restatement of Copyright

Spotify Lawyer Leads Law Institute “Restatement of Copyright” Project www.hypebot.com/hypebot/2018/01/s…ake-treatise.html]

Above the Law:  ALI’s Great Copyright Caper: Has The American Law Institute Been Hijacked By Big Tech?

Introducing Christopher Sprigman

Sprigman Pro Hac Vice in Spotify case

sprigman google academics

 

Postdicting the Future: Five Things Congress Could Do for Music Creators That Wouldn’t Cost the Taxpayer a Dime Part 4: Fixing Unmatched Songwriter Royalties

January 6, 2019 Comments off

[In 2013, I wrote 5 articles on Huffington Post titled “5 Things Congress Could Do That Wouldn’t Cost Taxpayers a Dime”.  The series foreshadowed policies that were addressed in the Music Modernization Act five years later.  This is a repost of Part 4 of that series.  After the MMA, how did I do?]

The US is alone in the world in maintaining a compulsory license for songs. The government forces songwriters to license their songs at a rate approved by the government and then has rather flimsy rules about how songwriters actually get paid. These flimsy rules, I suggest, have resulted in unknown amounts of royalties not finding their way to songwriters, particularly under compulsory licenses used by on-demand digital music services.

There’s an easy fix for this — the same rule that was applied against record companies and music publishers for unclaimed royalties in the past: Pay the money to state unclaimed property offices. If songwriters are getting ripped off by brand sponsored piracy on the unlicensed sites, then let’s at least make sure they get paid on the licensed services.

The Compulsory License for Songs

When the Congress established the compulsory license in 1909, the legislative body was concerned that granting exclusive rights in “mechanical royalties” for songs in piano rolls might create a monopoly if a single publisher could buy up the market in songs. However real that concern might have been at the time, the most common complaint from digital music services about songs is that the music publishing market is too fragmented, so it seems that argument is no longer relevant.

One of the big users of compulsory licenses is, of course, Google Play. Concern about the antitrust lusting of songwriters is particularly difficult to comprehend in a world in which the same government allows Google to buy and subsidize YouTube with monopoly rents, buy Double Click to achieve a dominant position in online advertising, and is given a pass by the FTC for antitrust violations. But those songwriters…boy, we have to keep a close eye on them.

Unsupervised Digital Music Services

So what appears to be happening is this: Digital music services use the compulsory license and its labyrinthine regulations — often with notices that are too late, accountings that are noncompliant and data that is just incorrect. To give you a sense of scope, digital music services often offer 20 million or so recordings, all of which contain the co-equal copyright in the song being recorded. Songs and recordings of songs have to be separately licensed for on-demand streaming services (especially the popular “cover recordings”). Songs are frequently co-owned — so the service using the compulsory license must notify a minimum of 20 million songwriters of their use of the song and often two or more writers per song. So let’s just call it tens of millions of licenses.

The digital music services must then track the use of these songs and recordings and match the usage to licenses obtained. There inevitably will be songs for which the writers cannot be found. So even if you assume that these companies can get to the matching stage without making any mistakes at all, what happens when there is usage — and therefore payable royalties — for songs that the service is unable to match — even for the most honest of reasons.

How Digital Music Services Pay Themselves Free Money

Add to this problem another problem — digital music services frequently try to dupe songwriters — the ones they have found — into agreeing that the service need only account to them if the songwriter has over a certain amount in payable royalties — somewhere between $50 and $250 depending on the service. (Google Play, for example, has a $100 minimum threshold — unilaterally imposed — on all international and “friction free” electronic payments.)

To put some math on this, realize that there are about 20 million songs typically available in a broad based retail offering such as Google Play or Spotify. Assume that on average 50 percent achieve $25 in earnings in a given calendar quarter accounting period. (This is consistent with both the “long tail” power law type sales distribution and the miniscule royalties paid to songwriters by these services.)

If a service holds royalty payments from songwriters until payable royalties exceed $25 (such as Google Play’s $100 default threshold as stated in their “Publisher Statement of Account Preference”), this means that the service could then be sitting on up to $250,000,000 in interest-free money. Free money that they theoretically may never have to pay out and only have to pay out when the service determines that the songwriter’s account is payable. Free money that is not permitted under the compulsory license rules for songs.

And that’s one service.

This policy of withholding royalties is fraught with moral hazard and practical problems: The heirs of one songwriter recently tried to sort out these payments and were told they needed to hire a lawyer to deal with the highly litigious digital music service. They couldn’t afford a lawyer so guess what happens to the unclaimed monies? And then there’s the statute of limitations.

Unmatched and Unclaimed Royalties

But there’s another problem with the digital music services — if they service cannot match usage (and earnings) to a royalty recipient in their systems, what happens then? Particularly with monies based on a share of advertising revenue that is distributed proportionately based on usage?

In this example, if in one month all songs were played 100 times and your song was played 10 times, then you would get 10/100 (or 10 percentt) of the advertising pie for that period. But — if there were actually 120 songs played during that period but only 100 could be matched, what happens to the other 20 that were unmatched? There is a growing belief that what happens is that the services don’t count the 20 unmatched songs, and divide the pie up based on the 100 they are able to match.

That means — there are 20 songs that were exploited but that are never paid and are not on the books. Even though there should be no songs on the service that were unlicensed because the compulsory license applies. If this seems high, remember that MediaNet’s lawyers acknowledged in a declaration cited in the current case by Aimee Mann against MediaNet that 23 percent of the millions of songs on the service are unlicensed.

By not counting the unmatched (and probably also unlicensed) songs, a service could argue — albeit fallaciously — that it had no “unallocated” royalties as it allocated all payable royalties to songs it could match and did not accrue any unpaid royalties. If I’m right about this, services are overpaying the matched songs with a share of revenue from the unmatched songs (in our example, 10/120 or 8-1/3 percent instead of the overpayment of 10/100 or 10 percent).

Because the Congress does not allow songwriters to audit the digital music services, there is no real way to know whether this is happening or the degree to which it is happening. If 23 percent of the MediaNet songs are unlicensed, royalties payable on any activity on these songs seems like it should at least be accrued until the songwriters can be found.

This is, of course, why states have unclaimed property statutes. In 2004, then Attorney General Eliot Spitzer chased record companies and music publishers for unpaid royalties for artists who could not be found for a variety of reasons, some plausible, some not so plausible. Spitzer forced the royalties to be paid—like utility deposits, dividends, abandoned bank accounts, the works—to the state unclaimed property office where the monies are held forever and where somebody eventually tries to track down the rightful owner.

Of course — there is a chance that if the digital music services did this voluntarily they might be admitting that they were using unlicensed songs and they want to keep a good eye on those kinds of admissions. So they will come up with many excuses for why they should not be subject to the same laws as everyone else. It is, after all, the Internet, and you know how that can be.

An Easy Fix for Congress: Pay unclaimed money to people who deal with unclaimed money

Even if the Congress does not establish an audit right for songwriters for mechanical royalties as they have for rights holders under the more contemporary webcasting compulsory license and the Audio Home Recording Act, it would be quite simple for the Congress to clarify once and for all that unpaid royalties — whether for the unmet minimum thresholds unilaterally imposed by digital music services, unknown addresses for songwriters, or any other reason — should be paid to the state unclaimed property offices in the state of the songwriter’s last known address or at least the state where the company does business.

Companies that want to take advantage of the compulsory license rules for songs shouldn’t also get to make their own rules to take advantage of songwriters.

Postdicting the Present: Five Things Congress Could Do for Music Creators That Wouldn’t Cost the Taxpayer a Dime Part 3: Create an Audit Right for Songwriters

January 5, 2019 Comments off

In 2013, I wrote 5 articles on Huffington Post titled “5 Things Congress Could Do That Wouldn’t Cost Taxpayers a Dime”. After the MMA, how did I do?

via Postdicting the Present: Five Things Congress Could Do for Music Creators That Wouldn’t Cost the Taxpayer a Dime Part 3: Create an Audit Right for Songwriters — Artist Rights Watch

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