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Federal Register / Vol. 86, No. 27 / Thursday, February 11, 2021 / Rules and Regulations
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asserted that MLC governance requires seeing DMP-specific information, subject to appropriate written confidentiality agreements and the restriction that they not see information relating to specific, identified copyright owners. Other commenters supported either a more limited or a broader approach. These comments are discussed in turn below.
The DLC contends that it is absolutely critical that the Office maintain a strict firewall between the MLC Board and the sensitive information provided by digital music providers to the MLC, 102 and that it would likewise be inappropriate for the MLC Board to gain information about the identity of digital music providers voluntary license partners, or the terms of those licenses. 103 The DLC suggests that the MLCs forty employees are the ones who should be running the day-today operations of the MLC, and reporting high-level, anonymized, aggregate information to the Board, sufficient for the Board to engage in oversight. 104 The DLC states that the MMA requires the MLCs officers to be independent of the Board, prohibiting anyone serving as an officer of the MLC
to simultaneously also be an employee or agent of any member of the board of directors of the collective or any entity represented by a member of the board of directors, and that it would be improper for MLC Board members to circumvent this restriction by becoming directly involved in the day-to-day operations of the MLC, especially if it means demanding special access to commercially sensitive information from digital music providers as a result. 105 The DLC expresses concern about music publishers serving on the MLC Board and having access to sensitive financial and business information about DMPs, as they would gain a special advantage in any commercial negotiations with a digital music provider, which harms both the digital music providers, and crucially publishers that do not serve on the Board, who will be at a competitive disadvantage. 106
The DLC proposes that at most, members of MLC and DLC boards and committees should be given access only 102 DLC Ex Parte Letter Oct. 14, 2020 DLC Ex Parte Letter 6 at 5; see id. This is particularly so because, in addition to the regular usage and royalty reporting that digital music providers will provide to the MLC the Offices interim rule gives the MLC access to a broad range of additional information through the records of use provision..
103 Id. at 6.
104 Id. citation omitted.
105 Id. quoting 17 U.S.C. 115d3Dviii.
106 Id.

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to aggregated and anonymized dataa category of information that the Proposed Rule already excludes from the definition of Confidential Information. 107 The DLC also argues that the final rule needs to address in some manner the confidentiality of information that the MLC and DLC
themselves generate as part of their own operations, while maintaining the ability for DLC members to get and share information related to MLC
operations. 108 To achieve this, the DLC
proposes creating categories of MLC
Internal Information and DLC Internal Information that may be more widely shared amongst the MLC and DLC
because these categories would encompass information that may be confidential from the perspective of the MLC and DLC, but do not include information specific to a particular digital music provider or licensee, and so are less likely to create a risk that the Office expressed concern aboutof confidential information from being misused by competitors for commercial advantage. 109
The DLCs proposal would also specify conditions under which DLC
members of the MLC board and committees could share information about MLC operations with its membership, and with appropriate personnel within DLC member companies, as well as DLC
activities.110 Under the DLCs approach, the MLC could share MLC Internal Information with representatives of the DLC who serve on the board of directors or committees of the MLC, only to the extent necessary for such persons to know such information, only when necessary to carry out their duties for the DLC, and subject to an appropriate written confidentiality agreement.111
107 DLC

NPRM Comment at 6.
at 5.
109 Id. at 67 quoting 85 FR at 22564. The DLC
proposes defining MLC Internal Information as sensitive financial or business information created or collected by the mechanical licensing collective for purposes of its internal operations, such as personnel, procurement, or technology information. DLC Ex Parte Letter Dec. 11, 2020
DLC Ex Parte Letter 8 at 5. The DLC also proposes that MLC Internal Information would be subject to certain exclusion provisions in the proposed rule so as not to include documents or information that are public or may be made public as well as top-level compilation data presented in anonymized format. DLC Ex Parte Letter 8 at 5.
The DLC similarly proposes a category of information called DLC Internal Information to cover sensitive financial or business information created or collected by the digital licensee coordinator for purposes of its internal operations.
DLC NPRM Comment at 67, Add. A2A3; DLC
Ex Parte Letter 8 at 5.
110 DLC NPRM Comment at 5.
111 Id. at Add. A3. As discussed more below, the DLC proposes that confidentiality agreements
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The DLC proposes that DLC recipients of this information may further share such MLC Internal Information with 1
employees, agents, consultants, vendors, and independent contractors of the DLC, only to the extent necessary for the purpose of performing their duties during the ordinary course of their work for the DLC, only to the extent necessary for such persons to know such information, subject to an appropriate written confidentiality agreement; 2
individuals serving on the board of directors and committees of the DLC, only to the extent necessary for such persons to know such information and only when necessary to carry out their duties for the DLC, subject to an appropriate written confidentiality agreement; and 3 individuals otherwise employed by members of the DLC, only to the extent necessary for such persons to know such information and only when necessary for the DLC to perform its duties, subject to an appropriate written confidentiality agreement.112 DLC Internal Information could be shared with members of the DLC board of directors and committees, subject to an appropriate written confidentiality agreement.113
By contrast, the MLC contends that it would not be appropriate to promulgate a regulation that prevents the MLCs governance from seeing DMPspecific information, subject to appropriate written confidentiality agreements and the restriction that they not see information relating to specific, identified copyright owners. 114 The MLC asserts that because the MLC
board oversees the blanket license administration and administrative assessment collection processes, it must be able to be informed as to compliance with these processes, and that because compliance is an individual DMP issue, not an industry
108 Id.

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covering MLC Internal Information may be executed by the employers of the DLC representatives serving on the MLC board of directors or committees. DLC
NPRM Comment at 3, Add. A3.
112 DLC NPRM Comment Add. at A3.
113 Id. In response to the NOI, the DLC initially proposed making a category of information called MLC Confidential Information available to DLC
representatives serving on the boards or committees of the MLC, which the DLC defined as any nonpublic financial or business information created by the mechanical licensing collective. DLC Reply NOI Comment Add. at A22 emphasis added. In the NPRM, the Office noted that without more background, the Office was not sure this approach was advisable. It was not immediately clear to the Office whether the MLC would be able to recreate information that would otherwise not be accessible to board and committee members, and so the Office tentatively concluded that the proposed rule offered a reasonable alternative. 85 FR at 22564
n.55.
114 MLC Ex Parte Letter Oct. 15, 2020 MLC Ex Parte Letter 9 at 2.

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