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Federal Register / Vol. 86, No. 42 / Friday, March 5, 2021 / Rules and Regulations interpreting the term voluntary license in section 115d4AiiII in the manner the DLC requests while reading the same term more broadly elsewhere in section 115, such as in the introductory paragraph of section 115d4Aii.30 In response, the DLC
and ARM put forward several legal arguments supporting the Offices authority.31 While the Office does not necessarily agree on every point asserted, the Office ultimately concurs that the DLCs proposal is not contrary to the statute and that the Office has the authority to adopt it and that as a matter of policy, it is appropriate to do so in light of the unanimous public comments in support of the proposal.
Specifically, the Office has analyzed the interrelationships among sections 115d3GiIbb, 115d4Aii, 115d4AiiIbb, and 115d4AiiII, which address the MLCs obligations and DMP reporting requirements with respect to voluntary licenses and individual download licenses.32 Under section 115d3GiIbb, the MLC has a duty to confirm uses of musical works subject to voluntary licenses and individual download licenses, and the corresponding pro rata amounts to be deducted from royalties that would otherwise be due under the blanket license. 33 And pursuant to the introductory paragraph of section 115d4Aii, DMPs, in reporting to the MLC, must provide usage data for musical works used under the blanket license and usage data for musical works used in covered activities under voluntary licenses and individual download licenses. 34 But under section 115d4AiiII one of multiple subparts providing further specificity under this introductory paragraph, DMPs are required to report musical work copyright owner identity and contact information only for works embodied in sound recordings as to which a voluntary license, rather than the blanket license, is in effect with respect to the uses being reported. 35
Individual download licenses are conspicuously absent from this subpart, although the introductory paragraph of section 115d4Aii requires
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30 Id.
31 DLC Supplemental Interim Rule Comment at 24; ARM Supplemental Interim Rule Comment at 23.
32 While the first two provisions expressly refer to both voluntary licenses and individual download licenses, the third does not explicitly refer to either, and the fourth only mentions voluntary licenses.
33 17 U.S.C. 115d3GiIbb emphasis added.
34 Id. at 115d4Aii emphasis added.
35 Id. at 115d4AiiII.

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reporting of usage data under these licenses and the MLC must receive at least some sort of information about these licenses in order to be able to carry out its obligations under section 115d3GiIbb. This suggests the Office should specify the information required to be reported with respect to individual download licenses pursuant to section 115d4AiiIII, which requires DMPs to provide such other information as the Register of Copyrights shall require by regulation, 36 in addition to the Offices general authority under section 115d12A.
With respect to section 115d4AiiIIs usage of the phrase voluntary license, when read against these other provisions and the overall licensing framework, the Office believes this phrase is best read as referring only to voluntary licenses that DMPs have entered into directly with musical work copyright owners or their agents, leaving a reporting gap for voluntary pass-through licenses for which the Office should detail requirements by regulation. By requiring identity and contact information for the relevant musical work copyright owners and omitting reference to individual download licenses, the provision implies a direct relationship between DMPs and the musical work copyright owners that does not exist with passthrough licenses. As the DLC notes, not only do DMPs not have this information, they often do not even know if the relevant pass-through licenses are voluntary or compulsory because that license belongs to the record label.37 If Congress had meant for this provision to cover voluntary passthrough licenses, it would have likely included a reference to individual download licenses as well; there does not seem to be any reason to distinguish between them for reporting purposes.38
36 See
id. at 115d4AiiIII.
Ex Parte Letter at 5 Nov. 10, 2020
Download stores are not even aware when a label is relying on a compulsory license and when it is relying on a voluntary variant thereof. Nor have they ever received contact information for musical work copyright owners from record labels.; DLC
Supplemental Interim Rule Comment at 3 It would be unusual for a service to have contact information for a musical work copyright owner with whom it has no direct contractual relationship..
38 In adopting the September 2020 rule, and in the absence of any contrary comments at that time, the Office had read the provision as inadvertently omitting individual download licenses, and so adopted regulations requiring reporting of copyright owner identity and contact information for both voluntary licenses and individual download licenses. See 37 CFR 210.24b8, 210.25b6, 210.27c5, 210.28c5. While that interpretation is also reasonable, in light of the DLCs postissuance comments about that approach, the Office 37 DLC

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If the provision were read to include voluntary pass-through licenses, DMPs would have to obtain the relevant information from the sound recording copyright owners or licensors that have the direct relationship with the musical work copyright owners, but nothing in the statute compels them to provide such information to DMPs. Such a requirement would also be in tension with section 115d4AiiIbb, which requires DMPs to report musical work copyright owner information for the musical works embodied in reported sound recordings only to the extent acquired by the digital music provider in the metadata provided by sound recording copyright owners or other licensors of sound recordings in connection with the use of sound recordings of musical works to engage in covered activities. 39
Additionally, the MMAs definition of voluntary license is very broad: A
license for use of a musical work or share thereof other than a compulsory license obtained under this section. 40
Especially given that this definition is not even limited to covered activities, examining the context of the provision in which the term appears is critical.
Here, as the foregoing shows, it is clear from reading the whole of section 115d4Aii together in context that section 115d4AiiII is meant to be referring to voluntary licenses for covered activities that are not passthrough licenses. This is in contrast, for example, to the introductory paragraph of section 115d4Aii where it is obviously meant to more broadly refer to both direct voluntary licenses and voluntary pass-through licenses.
This result is consistent with Congresss expressed intent to maintain the pass-through license for record labels to obtain and pass through mechanical license rights for individual permanent downloads. 41
Reading the statute in a way that frustrates the continuation of download stores or pass-through licensing for permanent downloads would be contrary to Congresss wishes.
Accordingly, the Office has adopted the proposal with a minor modification.
The Office is omitting the qualifying phrase where such authority applies to the exclusion of the blanket license authority pursuant to 17 U.S.C.
now finds it more persuasive that the omission of individual download licenses was intentional, and that, instead, this provision simply did not specify that it was not intended to apply to voluntary passthrough licenses.
39 See 17 U.S.C. 115d4AiiIbb.
40 Id. at 115e36.
41 See H.R. Rep. No. 115651, at 4; S. Rep. No.
115339, at 4; Conf. Rep. at 3.

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