,,ii #aaeth ,,congress #b;d ,session ,s4 #bccd ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #bd1 #bjah,mr4 ,hatch 7for himself1 ,mr4 ,whitehouse1 ,mr4 ,alexander1 ,ms4 ,harris1 ,mr4 ,corker1 ,mr4 ,durbin1 ,mr4 ,isakson1 ,mr4 ,coons1 and ,mr4 ,jones7 introduced the following bill2 which was read twice and referred to the ,committee on the ,judiciary ,a ,,bill ,to amend title #ag1 ,united ,states ,code1 to provide clarity with respect to1 and to modernize1 the licensing system for musical works under section #aae of that title1 to ensure fairness in the establishment of certain rates and fees under sections #aad and #aae of that title1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,music ,modernization ,act of #bjah4 #b4 ,blanket license for digital uses and mechanical licensing collective 7a7 ,amendment ,section #aae of title #ag1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7a7-- 7,a7 by inserting in general after ,availability and scope of compulsory license2 and 7,b7 by striking paragraph 7#a7 and inserting the following3 7#a7 7,a7 ,a person may by complying with the provisions of this section obtain a compulsory license to make and distribute phonorecords of a nondramatic musical work1 including by means of digital phonorecord delivery4 ,a person may obtain a compulsory license only if the primary purpose in making phonorecords of the musical work is to distribute them to the public for private use1 including by means of digital phonorecord delivery1 and-- 7i7 phonorecords of such musical work have previously been distributed to the public in the ,united ,states under the authority of the copyright owner of the work2 or 7ii7 in the case of a digital music provider seeking to make and distribute digital phonorecord deliveries of a sound recording embodying a musical work under a compulsory license-- 7,i7 the copyright owner of the sound recording first fixed such sound recording under the authority of the copyright owner of the musical work and is further authorized by the copyright owner of the musical work to make and distribute phonorecords embodying such work to the public in the ,united ,states2 and 7,,ii7 the copyright owner of the sound recording or its authorized distributor has authorized the digital music provider to make and distribute digital phonorecord deliveries of the sound recording to the public in the ,united ,states4 7,b7 ,a person may not obtain a compulsory license for the use of the work in the making of phonorecords duplicating a sound recording fixed by another1 including by means of digital phonorecord delivery1 unless-- 7i7 such sound recording was fixed lawfully2 and 7ii7 the making of the phonorecords was authorized by the owner of the copyright in the sound recording or1 if the sound recording was fixed before ,february #ae1 #aigb1 by any person who fixed the sound recording pursuant to an express license from the owner of the copyright in the musical work or pursuant to a valid compulsory license for use of such work in a sound recording4 2 7#b7 by striking subsection 7b7 and inserting the following3 7b7 ,procedures ,to obtain a compulsory license 7#a7 ,phonorecords other than digital phonorecord deliveries ,a person who seeks to obtain a compulsory license under this section to make and distribute phonorecords of a musical work other than by means of digital phonorecord delivery shall1 before or within #cj days after making1 and before distributing1 any phonorecord of the work1 serve notice of intention to do so on the copyright owner4 ,if the registration or other public records of the ,copyright ,office do not identify the copyright owner and include an address at which notice can be served1 it shall be sufficient to file the notice of intention in the ,copyright ,office4 ,the notice shall comply1 in form1 content1 and manner of service1 with requirements that the ,register of ,copyrights shall prescribe by regulation4 7#b7 ,digital phonorecord deliveries ,a person who seeks to obtain a compulsory license under this section to make and distribute phonorecords of a musical work by means of digital phonorecord delivery-- 7,a7 prior to the license availability date set forth in subsection 7e71 shall1 before or within #cj days after first making any such digital phonorecord delivery1 serve a notice of intention to do so on the copyright owner4 ,the notice1 which may not be filed with the ,copyright ,office1 shall comply1 in form1 content1 and manner of service1 with requirements that the ,register of ,copyrights shall prescribe by regulation2 and 7,b7 on or after the license availability date1 shall1 before making any such digital phonorecord delivery1 follow the procedure set forth in subsection 7d77#b71 except as provided in paragraph 7#c74 7#c7 ,record company download licenses ,notwithstanding anything to the contrary in this section1 a record company may1 on or after the license availability date1 obtain a license to make and distribute1 or authorize the making and distribution of1 digital phonorecord deliveries of musical works in the form of permanent downloads in the manner described in paragraph 7#b77;,a74 ,a record company that obtains a compulsory license for permanent downloads as permitted under this paragraph shall provide statements of account and pay royalties as provided in subsection 7c77#e74 7#d7 ,failure to obtain license 7,a7 ,phonorecords other than digital phonorecord deliveries ,in the case of phonorecords made and distributed other than by means of digital phonorecord delivery1 the failure to serve or file the notice of intention required by paragraph 7#a7 forecloses the possibility of a compulsory license under paragraph 7#a74 ,in the case of phonorecords made and distributed by means of digital phonorecord delivery prior to the license availability date1 the failure to serve the notice of intention required by paragraph 7#b77;,a7 forecloses the possibility of a compulsory license under paragraph 7#b77;,a74 ,in either case1 in the absence of a voluntary license1 the failure to obtain a compulsory license renders the making and distribution of phonorecords1 including by means of digital phonorecord delivery1 actionable as acts of infringement under section #eja and subject to the remedies provided by sections #ejb through #ejf4 7,b7 ,digital phonorecord deliveries ,in the case of phonorecords made and distributed by means of digital phonorecord delivery on or after the license availability date1 the failure to comply with paragraph 7#b77;,b71 or1 if applicable1 paragraph 7#c71 forecloses the possibility of a compulsory license under this section4 ,in the absence of a voluntary license1 the failure to obtain a compulsory license renders the making and distribution of phonorecords by means of digital phonorecord delivery actionable as acts of infringement under section #eja and subject to the remedies provided by sections #ejb through #ejf4 2 7#c7 in subsection 7c7-- 7,a7 by striking paragraphs 7#a7 and 7#b7 and inserting the following3 7#a7 ,to be entitled to receive royalties under a compulsory license obtained under subsection 7b77#a7 the copyright owner must be identified in the registration or other public records of the ,copyright ,office4 ,the owner is entitled to royalties for phonorecords made and distributed after being so identified1 but is not entitled to recover for any phonorecords previously made and distributed4 7#b7 ,except as provided by paragraph 7#a71 for every phonorecord made and distributed under a compulsory license under this section other than by means of digital phonorecord delivery1 with respect to each work embodied in the phonorecord1 the royalty shall be the royalty prescribed under subparagraphs 7,b7 through 7,e7 of paragraph 7#c7 and chapter #h of this title4 ,for purposes of this paragraph1 a phonorecord is considered distributed if the person exercising the compulsory license has voluntarily and permanently parted with its possession4 2 7,b7 by striking paragraph 7#c77;,a7 and inserting the following3 7#c7 7,a7 ,for every digital phonorecord delivery of a musical work made under a compulsory license under this section1 the royalty payable shall be the royalty prescribed under subparagraphs 7,b7 through 7,e7 and chapter #h of this title4 2 7,c7 in paragraph 7#c77;,c7-- 7i7 by striking the second sentence2 and 7ii7 by adding at the end the following new sentence3 ,the administrative assessment to be paid by digital music providers and significant nonblanket licensees under subsection 7d7 shall be established in separate proceedings before the ,copyright ,royalty ,judges as provided in subsection 7d77#g742 7,d7 by striking paragraph 7#c77;,d7 and inserting the following3 7,d7 ,the schedule of reasonable rates and terms determined by the ,copyright ,royalty ,judges shall1 subject to subparagraph 7,e71 be binding on all copyright owners of nondramatic musical works and persons entitled to obtain a compulsory license under subsection 7a77#a7 during the period specified in subparagraph 7,c71 such other period as may be determined pursuant to subparagraphs 7,b7 and 7,c71 or such other period as the parties may agree4 ,the ,copyright ,royalty ,judges shall establish rates and terms that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller4 ,in determining such rates and terms for digital phonorecord deliveries1 the ,copyright ,royalty ,judges shall base their decision on economic1 competitive1 and programming information presented by the parties1 including-- 7i7 whether use of the compulsory licensee's service may substitute for or may promote the sales of phonorecords or otherwise may interfere with or may enhance the musical work copyright owner's other streams of revenue from its musical works2 and 7ii7 the relative roles of the copyright owner and the compulsory licensee in the copyrighted work and the service made available to the public with respect to the relative creative contribution1 technological contribution1 capital investment1 cost1 and risk4 2 7,e7 in paragraph 7#c77;,e77i71 by striking ,librarian of ,congress and2 7,f7 in paragraph 7#c77;,g77i77,,ii7-- 7i7 by striking owner of the copyright in the sound recording or the2 and 7ii7 by striking to distribute or authorize the distribution1 by means of a digital phonorecord delivery and inserting 1 or by a record company pursuant to an individual download license1 to make and distribute phonorecords by means of digital phonorecord delivery2 7,g7 in paragraph 7#d71 by striking the first sentence and inserting ,a compulsory license obtained in accordance with subsection 7b77#a7 to make and distribute phonorecords includes the right of the maker of such a phonorecord to distribute or authorize distribution of such phonorecord1 other than by means of a digital phonorecord delivery1 by rental1 lease1 or lending 7or by acts or practices in the nature of rental1 lease1 or lending742 7,h7 in paragraph 7#e71 by striking ,royalty payments shall and inserting ,except as provided in paragraphs 7#d77;,a77i7 and 7#aj77;,b7 of subsection 7d71 royalty payments shall2 and 7,i7 in paragraph 7#f7-- 7i7 by striking ,if the copyright owner and inserting ,in the case of a license obtained under subsection 7b77#a71 7b77#b77;,a71 or 7b77#c71 if the copyright owner2 and 7ii7 by adding at the end the following sentence3 ,in the case of a license obtained under subsection 7b77#b77;,b71 license authority under the compulsory license may be terminated as provided in subsection 7d77#d77;,e742 7#d7 by amending subsection 7d7 to read as follows3 7d7 ,blanket license for digital uses1 mechanical licensing collective1 and digital licensee coordinator 7#a7 ,blanket license for digital uses ,a digital music provider that qualifies for a compulsory license under subsection 7a7 may1 by complying with the terms and conditions of this subsection1 obtain a blanket license from copyright owners through the mechanical licensing collective designated under paragraph 7#c77;,b7 to make and distribute digital phonorecord deliveries of musical works through one or more covered activities4 7,a7 ,included activities ,a blanket license obtained under this subsection-- 7i7 covers all musical works 7or shares of such works7 available for compulsory licensing under this section for purposes of engaging in covered activities1 except as provided in subparagraph 7,b72 7ii7 includes the making and distribution of server1 intermediate1 archival1 and incidental reproductions of musical works that are reasonable and necessary for the digital music provider to engage in covered activities licensed under this subsection1 solely for the purpose of engaging in such covered activities2 and 7iii7 does not cover or include any rights or uses other than those set forth in subsections 7d77#a77;,a77i7 and 7ii74 7,b7 ,other licenses ,a voluntary license for covered activities entered into between one or more copyright owners and one or more digital music providers1 or authority to make and distribute permanent downloads of a musical work obtained by a digital music provider from the copyright owner of a sound recording pursuant to an individual download license1 shall be given effect in lieu of a blanket license under this subsection with respect to the musical works 7or shares thereof7 covered by such voluntary license or individual download authority2 provided1 however1 that-- 7i7 where a voluntary or individual download license applies1 the license authority provided under the blanket license shall exclude any musical works 7or shares thereof7 subject to the voluntary or individual download license2 7ii7 an entity engaged in covered activities under a voluntary license or authority obtained pursuant to an individual download license that is a significant nonblanket licensee shall comply with paragraph 7#f77;,a72 and 7iii7 the rates and terms of any voluntary license shall be subject to the second sentence of clause 7i7 and clause 7ii7 of subsection 7c77#c77;,e7 and paragraph 7#i77;,c7 as applicable4 7,c7 ,protection against infringement actions ,a digital music provider that obtains and complies with the terms of a valid blanket license under this subsection shall not be subject to an action for infringement of the exclusive rights provided by paragraphs 7#a7 and 7#c7 of section #ajf under this title arising from use of a musical work 7or share thereof7 to engage in covered activities authorized by such license1 subject to paragraph 7#d77;,e74 7,d7 ,other requirements and conditions apply ,except as expressly provided in this subsection1 each requirement1 limitation1 condition1 privilege1 right1 and remedy otherwise applicable to compulsory licenses under this section shall apply to compulsory blanket licenses under this subsection4 7#b7 ,availability of blanket license 7,a7 ,procedure for obtaining license ,a digital music provider may obtain a blanket license under this subsection to engage in one or more covered activities by submitting a notice of license to the mechanical licensing collective described in paragraph 7#c7 that specifies the particular covered activities in which the digital music provider seeks to engage1 as follows3 7i7 ,the notice of license shall comply in form and substance with requirements that the ,register of ,copyrights shall establish by regulation4 7ii7 ,unless rejected in writing by the mechanical licensing collective within #cj days after receipt1 the blanket license shall be effective as of the date the notice of license was provided by the digital music provider4 7iii7 ,a notice of license shall not be rejected by the mechanical licensing collective unless-- 7,i7 the digital music provider or notice of license does not meet all requirements of this section or applicable regulations1 in which case the requirements at issue shall be specified with reasonable particularity in the notice of rejection1 or 7,,ii7 the digital music provider has had a license under this subsection terminated by the mechanical licensing collective within the past #c years pursuant to paragraph 7#d77;,e74 7iv7 ,if a notice of license is rejected under clause 7iii71 the digital music provider shall have #cj days after receipt of the notice of rejection to cure any deficiency and submit an amended notice of license to the mechanical licensing collective4 ,if the deficiency has been cured1 the mechanical licensing collective shall so confirm in writing1 and the license shall be effective as of the date that the original notice of license was provided by the digital music provider4 7,b7 ,blanket license effective date ,blanket licenses under this subsection shall be made available by the mechanical licensing collective as of the license availability date specified in subsection 7e77#ae74 ,no such license shall be effective prior to the license availability date4 7#c7 ,mechanical licensing collective 7,a7 ,in general ,the mechanical licensing collective shall be a single entity that-- 7i7 is a not-for-profit entity1 not owned by any other entity1 that is created by copyright owners to carry out responsibilities under this subsection2 7ii7 is endorsed by and enjoys substantial support from copyright owners of musical works that together represent the greatest share of the licensor market for uses of such works in covered activities1 as measured over the preceding #c full calendar years2 7iii7 is able to demonstrate to the ,register of ,copyrights that it has1 or will have prior to the license availability date1 the administrative and technological capabilities to perform the required functions of the mechanical licensing collective under this subsection2 and 7iv7 has been designated by the ,register of ,copyrights in accordance with subparagraph 7,b74 7,b7 ,designation of mechanical licensing collective 7i7 ,initial designation ,the ,register of ,copyrights shall initially designate the mechanical licensing collective within #i months of the enactment date as follows3 7,i7 ,within #ij days of the enactment date1 the ,register shall publish notice in the ,federal ,register soliciting information to assist in identifying the appropriate entity to serve as the mechanical licensing collective4 7,,ii7 ,after reviewing the information requested under subclause 7,i7 and making a designation1 the ,register shall publish notice in the ,federal ,register setting forth the identity of and contact information for the mechanical licensing collective4 7ii7 ,periodic review of designation ,following the initial designation of the mechanical licensing collective1 the ,register shall1 every #e years1 beginning with the fifth full calendar year to commence after the initial designation1 publish notice in the ,federal ,register in the month of ,january soliciting information concerning whether the existing designation should be continued1 or a different entity meeting the criteria set forth in subparagraph 7,a7 should be designated4 ,following publication of such notice3 7,i7 ,the ,register shall1 after reviewing the information submitted and conducting additional proceedings as appropriate1 publish notice in the ,federal ,register of a continuing designation or new designation of the mechanical licensing collective1 as the case may be1 with any new designation to be effective as of the first day of a month that is no less than #f months from the date of publication of such notice1 as specified by the ,register4 7,,ii7 ,if a new entity is designated as a mechanical licensing collective1 the ,register shall adopt regulations to govern the transfer of licenses1 funds1 records1 and administrative responsibilities from the existing mechanical licensing collective to the new entity4 7,c7 ,authorities and functions 7i7 ,in general ,the mechanical licensing collective is authorized to perform the following functions1 subject to more particular requirements as set forth in this subsection3 7,i7 ,offer and administer blanket licenses for covered activities1 including receipt of notices of license and reports of usage from digital music providers4 7,,ii7 ,collect and distribute royalties from digital music providers for covered activities4 7,,iii7 ,engage in efforts to identify musical works 7and shares of such works7 embodied in particular sound recordings1 and to identify and locate the copyright owners of such musical works 7and shares of such works74 7,,iv7 ,maintain a publicly accessible database of musical works 7and shares of such works7 and copyright owners1 and other information relevant to the administration of licensing activities under this section4 7,v7 ,administer a process by which copyright owners can claim ownership of musical works 7and shares of such works71 and a process by which royalties for works for which the owner is not identified or located are equitably distributed to known copyright owners4 7,,vi7 ,administer collections of the administrative assessment from digital music providers and significant nonblanket licensees1 including receipt of notices of nonblanket activity4 7,,vii7 ,invest in relevant resources1 and arrange for services of outside vendors and others1 to support its activities4 7,,viii7 ,engage in efforts to enforce rights and obligations under this subsection1 including in coordination with the digital licensee coordinator4 7,,ix7 ,initiate and participate in proceedings before the ,copyright ,royalty ,judges to establish the administrative assessment under this subsection4 7,x7 ,initiate and participate in proceedings before the ,copyright ,office with respect to activities under this subsection4 7,,xi7 ,gather and provide documentation for use in proceedings before the ,copyright ,royalty ,judges to set rates and terms under this section4 7,,xii7 ,maintain records of its activities and engage in and respond to audits as contemplated under this subsection4 7,,xiii7 ,engage in such other activities as may be necessary or appropriate to fulfill its responsibilities under this subsection4 7ii7 ,additional administrative activities ,subject to paragraph 7#aa77;,c7 and subsection 7e77#ca71 the mechanical licensing collective may also administer1 or assist in administering1 voluntary or individual download licenses issued by copyright owners for uses of musical works1 for which the mechanical licensing collective shall charge reasonable fees for such services4 7iii7 ,restriction on lobbying ,the mechanical licensing collective shall not engage in government lobbying activities2 provided1 however1 that it may engage in the activities set forth in subclauses 7,,ix71 7,x71 and 7,,xi7 of clause 7i74 7,d7 ,governance 7i7 ,board of directors ,the mechanical licensing collective shall have a board of directors consisting of #aj voting members and #c nonvoting members1 as follows3 7,i7 ,eight voting members shall be music publishers to which songwriters have assigned exclusive rights of reproduction and distribution of musical works with respect to covered activities2 provided1 however1 that no such music publisher member may be owned by1 or under common control with1 any other board member4 7,,ii7 ,two voting members shall be professional songwriters who have retained and exercise exclusive rights of reproduction and distribution with respect to covered activities with respect to musical works they have authored4 7,,iii7 ,one nonvoting member shall be a representative of the nonprofit trade association of music publishers that represents the greatest share of the licensor market for uses of musical works in covered activities1 as measured over the preceding #c full calendar years4 7,,iv7 ,one nonvoting member shall be a representative of the digital licensee coordinator1 provided that a digital licensee coordinator has been designated pursuant to subsection 7d77#e77;,b74 ,otherwise1 the nonvoting member shall be the nonprofit trade association of digital licensees that represents the greatest share of the licensee market for uses of musical works in covered activities1 as measured over the preceding #c full calendar years4 7,v7 ,one nonvoting member shall be a representative of a nationally recognized nonprofit trade association whose primary mission is advocacy on behalf of ,american songwriters4 7ii7 ,board meetings ,the board of directors shall meet no less than #b times per year and discuss matters pertinent to the operations1 including the budget1 of the board of directors4 7iii7 ,operations advisory committee ,the board of directors of the mechanical licensing collective shall establish an operations advisory committee consisting of no fewer than #f members to make recommendations to the board of directors concerning the operations of the mechanical licensing collective1 including the efficient investment in and deployment of information technology and data resources4 ,such committee shall have an equal number of-- 7,i7 copyright owners of musical works who are appointed by the board of directors of the mechanical licensing collective2 and 7,,ii7 representatives of digital music providers who are appointed by the digital licensee coordinator4 7iv7 ,unclaimed royalties oversight committee ,the board of directors of the mechanical licensing collective shall establish and appoint an unclaimed royalties oversight committee consisting of #aj members1 #f of which shall be copyright owners of musical works and #d of which shall be professional songwriters whose works are used in covered activities4 7v7 ,dispute resolution committee ,the board of directors of the mechanical licensing collective shall establish and appoint a dispute resolution committee consisting of no fewer than #f members1 which committee shall include an equal number of representatives of copyright owners of musical works and professional songwriters4 7,e7 ,musical works database 7i7 ,establishment and maintenance of database ,the mechanical licensing collective shall establish and maintain a database of musical works 7and shares of such works7 and1 to the extent known1 the identity and location of the copyright owners of such works 7and shares thereof7 and the sound recordings in which they are embodied4 ,in furtherance of maintaining such database1 the mechanical licensing collective shall engage in efforts to identify the musical works embodied in particular sound recordings1 as well as to identify and locate the copyright owners of such works 7and shares thereof71 and update such data as appropriate4 7ii7 ,matched works ,with respect to musical works 7and shares thereof7 that have been matched to copyright owners1 the musical works database shall include-- 7,i7 the title of the musical work2 7,,ii7 the copyright owner of the work 7or share thereof71 and such owner's ownership percentage2 7,,iii7 contact information for such copyright owner2 7,,iv7 to the extent available-- 7aa7 the international standard musical work code for the work2 and 7bb7 identifying information for sound recordings in which the musical work is embodied1 including the name of the sound recording1 featured artist1 producer1 international standard recording code1 and other information commonly used to assist in associating sound recordings with musical works2 and 7,v7 such other information as the ,register of ,copyrights may prescribe by regulation4 7iii7 ,unmatched works ,with respect to unmatched works 7and shares of works7 in the database1 the musical works database shall include-- 7,i7 to the extent available-- 7aa7 the title of the musical work2 7bb7 the ownership percentage for which an owner has not been identified2 7cc7 if a copyright owner has been identified but not located1 the identity of such owner and such owner's ownership percentage2 7dd7 identifying information for sound recordings in which the work is embodied1 including sound recording name1 featured artist1 producer1 international standard recording code1 and other information commonly used to assist in associating sound recordings with musical works2 and 7ee7 any additional information reported to the mechanical licensing collective that may assist in identifying the work2 and 7,,ii7 such other information relating to the identity and ownership of musical works 7and shares of such works7 as the ,register of ,copyrights may prescribe by regulation4 7iv7 ,sound recording information ,each copyright owner of musical works shall engage in commercially reasonable efforts to deliver to the mechanical licensing collective for use in the musical works database1 to the extent such information is not then available in the database1 information regarding the names of the sound recordings in which that copyright owner's musical works 7or shares thereof7 are embodied1 to the extent practicable4 7v7 ,accessibility of database ,the musical work database shall be accessible to the public in a searchable1 online format free of charge4 ,the mechanical licensing collective shall also make such database available free of charge in a bulk1 machine-readable format1 via a widely available software application1 to-- 7,i7 digital music providers operating under valid notices of license2 7,,ii7 significant nonblanket licensees2 and 7,,iii7 authorized vendors of the entities described in subclauses 7,i7 and 7,,ii74 7vi7 ,additional requirements ,the ,register of ,copyrights shall establish requirements by regulations to ensure the usability1 interoperability1 and usage restrictions of the musical works database4 7,f7 ,notices of license and nonblanket activity 7i7 ,in general ,the mechanical licensing collective shall receive1 review1 and confirm or reject notices of license from digital music providers1 as provided in subsection 7d77#b77;,a74 ,the collective shall maintain a current1 publicly accessible list of blanket licenses obtained by digital music providers under this subsection that includes contact information for the licensees and the effective dates of such licenses4 7ii7 ,public list of notices ,the mechanical licensing collective shall receive notices of nonblanket activity from significant nonblanket licensees1 as provided in subsection 7d77#f77;,a74 ,the collective shall maintain a current1 publicly accessible list of notices of nonblanket activity submitted by significant nonblanket licensees that includes contact information for such licensees and the dates of receipt of such notices4 7,g7 ,collection and distribution of royalties 7i7 ,in general ,upon receiving reports of usage and payments of royalties from digital music providers for covered activities1 the mechanical licensing collective shall-- 7,i7 engage in efforts to-- 7aa7 identify the musical works embodied in sound recordings reflected in such reports1 and the copyright owners of such musical works 7and shares thereof72 7bb7 confirm uses of musical works subject to voluntary and individual download licenses1 and the corresponding pro rata amounts to be deducted from royalties that would otherwise be due under the blanket license2 and 7cc7 confirm proper payment of royalties due2 7,,ii7 distribute royalties to copyright owners in accordance with the usage and other information contained in such reports1 as well as the ownership and other information contained in its records2 and 7,,iii7 deposit royalties that cannot be distributed due to an inability to identify or locate a copyright owner of a musical work 7or share thereof71 or due to a pending dispute before the dispute resolution committee of the mechanical licensing collective1 in an interest-bearing account as provided in subparagraph 7,h77ii74 7ii7 ,regulations required ,the ,register of ,copyrights shall adopt regulations regarding adjustments to reports of usage by digital music providers1 including establishing mechanisms to account for overpayments and underpayments made in prior periods4 7,h7 ,holding of accrued royalties 7i7 ,holding period ,the mechanical licensing collective shall hold accrued royalties associated with particular musical works 7and shares of works7 that remain unmatched for a period of at least #c years from the date on which the funds were received by the mechanical licensing collective1 or at least #c years from the date on which they were accrued by a digital music provider that subsequently transferred such funds to the mechanical licensing collective pursuant to paragraph 7#aj77;,b71 whichever period expires sooner4 7ii7 ,interest-bearing account ,accrued royalties for unmatched works 7and shares thereof7 shall be maintained by the mechanical licensing collective in an interest-bearing account that earns monthly interest at the ,federal1 short-term rate1 such interest to accrue for the benefit of copyright owners entitled to payment of such accrued royalties4 7,i7 ,musical works claiming process ,the mechanical licensing collective shall publicize the existence of accrued royalties for unmatched musical works 7and shares of such works7 within #f months of receiving a transfer of accrued royalties for such works by publicly listing the works and the procedures by which copyright owners may identify themselves and provide ownership1 contact1 and other relevant information to the mechanical licensing collective in order to receive payment of accrued royalties4 ,when a copyright owner of an unmatched work 7or share of a work7 has been identified and located in accordance with the procedures of the mechanical licensing collective1 the collective shall-- 7i7 update the musical works database and its other records accordingly2 and 7ii7 provided that accrued royalties for the musical work 7or share thereof7 have not yet been included in a distribution pursuant to subparagraph 7,j77i71 pay such accrued royalties and a proportionate share of accrued interest associated with that work 7or share thereof7 to the copyright owner1 accompanied by a cumulative statement of account reflecting usage of such work and accrued royalties based on information provided by digital music providers to the mechanical licensing collective4 7,j7 ,distribution of unclaimed accrued royalties 7i7 ,distribution procedures ,after the expiration of the prescribed holding period for accrued royalties provided in subparagraph 7,h77i71 the mechanical licensing collective shall distribute such accrued royalties1 along with a proportionate share of accrued interest1 to copyright owners identified in its records1 subject to the following requirements1 and in accordance with the policies and procedures established under clause 7ii73 7,i7 ,the first such distribution shall occur in the first full calendar year to commence after the license availability date1 with at least one such distribution to take place in each calendar year thereafter4 7,,ii7 ,copyright owners' payment shares for unclaimed accrued royalties for particular reporting periods shall be determined in a transparent and equitable manner based on data indicating the relative market shares of such copyright owners as reflected by royalty payments made by digital music providers for covered activities for the periods in question1 including1 in addition to royalty payments made to the mechanical licensing collective1 royalty payments made to copyright owners under voluntary and individual download licenses for covered activities1 to the extent such information is available to the mechanical licensing collective4 ,in furtherance of the determination of equitable market shares under this paragraph-- 7aa7 the mechanical licensing collective may require copyright owners seeking distributions of unclaimed accrued royalties to provide1 or direct the provision of1 information concerning royalties received under voluntary and individual download licenses for covered activities1 and 7bb7 the mechanical licensing collective shall take appropriate steps to safeguard the confidentiality and security of financial and other sensitive data used to compute market shares in accordance with the confidentiality provisions prescribed by the ,register of ,copyrights under subsection 7d77#ab77;,c74 7ii7 ,establishment of distribution policies ,the unclaimed royalties oversight committee established under paragraph 7#c77;,d77iv7 shall establish policies and procedures for the distribution of unclaimed accrued royalties in accordance with this subparagraph1 subject to the approval of the board of directors of the mechanical licensing collective4 7iii7 ,advance notice of distributions ,the mechanical licensing collective shall publicize a pending distribution of unclaimed accrued royalties at least #ij days in advance of such distribution4 7iv7 ,songwriter payments ,copyright owners that receive a distribution of unclaimed accrued royalties and accrued interest shall pay or credit a portion to songwriters 7or the authorized agents of songwriters7 on whose behalf they license or administer musical works for covered activities1 in accordance with applicable contractual terms2 provided1 however1 that notwithstanding any agreement to the contrary-- 7,i7 such payments and credits to songwriters shall be allocated in proportion to reported usage of individual musical works by digital music providers during the reporting periods covered by the distribution from the mechanical licensing collective2 and 7,,ii7 in no case shall the payment or credit to an individual songwriter be less than #ej percent of the payment received by the copyright owner attributable to usage of musical works 7or shares of works7 of that songwriter4 7,k7 ,dispute resolution ,the dispute resolution committee established under paragraph 7#c77;,d77v7 shall address and resolve in a timely and equitable manner disputes among copyright owners relating to ownership interests in musical works licensed under this section and allocation and distribution of royalties by the mechanical licensing collective1 according to a process approved by the board of directors of the mechanical licensing collective4 ,such process-- 7i7 shall include a mechanism to hold disputed funds in accordance with the requirements set forth in subparagraph 7,h77ii7 pending resolution of the dispute by the committee1 written agreement of the affected parties1 or pursuant to a binding judicial determination or arbitration2 and 7ii7 except as provided in paragraph 7#aa77;,d71 shall not affect any legal or equitable rights or remedies available to any copyright owner or songwriter concerning ownership of1 and entitlement to royalties for1 a musical work4 7,l7 ,verification of payments by mechanical licensing collective 7i7 ,verification process ,a copyright owner entitled to receive payments of royalties for covered activities from the mechanical licensing collective may1 individually or with other copyright owners1 conduct an audit of the mechanical licensing collective to verify the accuracy of royalty payments and distributions by the mechanical licensing collective to such copyright owner1 as follows3 7,i7 ,a copyright owner may audit the mechanical licensing collective only once in a year for any or all of the prior #c calendar years1 and may not audit records for any calendar year more than once4 7,,ii7 ,the audit shall be conducted by a qualified auditor1 who shall perform the audit during the ordinary course of business by examining the books1 records and systems of the mechanical licensing collective1 as well as underlying data1 according to generally accepted auditing standards and subject to applicable confidentiality requirements prescribed by the ,register of ,copyrights under subsection 7d77#ab77;,c74 7,,iii7 ,the mechanical licensing collective shall make such books1 records1 and data available to the qualified auditor and respond to reasonable requests for relevant information1 and shall use commercially reasonable efforts to facilitate access to relevant information maintained by third parties4 7,,iv7 ,to commence the audit1 the copyright owner7s7 shall file with the ,copyright ,office a notice of intent to conduct an audit of the mechanical licensing collective1 and shall simultaneously deliver a copy of such notice to the mechanical licensing collective4 ,the ,register of ,copyrights shall cause the notice of audit to be published in the ,federal ,register within #cj days of receipt4 7,v7 ,the qualified auditor shall determine the accuracy of royalty payments1 including whether an underpayment or overpayment of royalties was made by the mechanical licensing collective to the auditing copyright owner7s72 provided1 however1 that before providing a final audit report to such copyright owner7s71 the qualified auditor shall provide a tentative draft of the report to the mechanical licensing collective and allow the mechanical licensing collective a reasonable opportunity to respond to the findings1 including by clarifying issues and correcting factual errors4 7,,vi7 ,the auditing copyright owner7s7 shall bear the cost of the audit4 ,in case of an underpayment to the copyright owner7s71 the mechanical licensing collective shall pay the amounts of any such underpayment to the auditing copyright owner7s71 as appropriate4 ,in case of an overpayment by the mechanical licensing collective1 the mechanical licensing collective may debit the accounts of the auditing copyright owner7s7 for such overpaid amounts1 or such owner7s7 shall refund overpaid amounts to the mechanical licensing collective1 as appropriate4 7ii7 ,alternative verification procedures ,nothing in this subparagraph shall preclude a copyright owner and the mechanical licensing collective from agreeing to audit procedures different from those set forth herein2 provided1 however1 that notice of the audit shall still be provided to and published by the ,copyright ,office as set forth in clause 7i77,,iv74 7,m7 ,records of mechanical licensing collective 7i7 ,records maintenance ,the mechanical licensing collective shall ensure that all material records of its operations1 including those relating to notices of license1 the administration of its claims process1 reports of usage1 royalty payments1 receipt and maintenance of accrued royalties1 royalty distribution processes1 and legal matters1 are preserved and maintained in a secure and reliable manner1 with appropriate commercially reasonable safeguards against unauthorized access1 copying1 and disclosure1 and subject to the confidentiality requirements prescribed by the ,register of ,copyrights under subsection 7d77#ab77;,c7 for a period of no less than #g years from date of creation or receipt1 whichever occurs later4 7ii7 ,records access ,the mechanical licensing collective shall provide prompt access to electronic and other records pertaining to the administration of a copyright owner's musical works upon reasonable written request of such owner or the owner's authorized representative4 7#d7 ,terms and conditions of blanket license ,a blanket license obtained under this subsection is subject to1 and conditioned upon1 the following requirements3 7,a7 ,royalty reporting and payments 7i7 ,monthly reports and payment ,a digital music provider shall report and pay royalties to the mechanical licensing collective under the blanket license on a monthly basis in accordance with clause 7ii7 and subsection 7c77#e72 provided1 however1 that monthly reporting shall be due #de days1 rather than #bj days1 after the end of the monthly reporting period4 7ii7 ,data to be reported ,in reporting usage of musical works to the mechanical licensing collective1 a digital music provider shall provide usage data for musical works used under the blanket license under this subsection as well as usage data for musical works used in covered activities under voluntary and individual download licenses4 ,in its report of usage1 the digital music provider shall-- 7,i7 with respect to each musical work-- 7aa7 provide identifying information for the sound recording embodying such work1 including sound recording name1 featured artist1 producer and1 to the extent available1 producer1 international standard recording code1 and other information commonly used in the industry to identify sound recordings and match them to the musical works they embody2 7bb7 to the extent available1 provide information concerning authorship and ownership of the applicable rights in the musical work1 including songwriter7s71 publisher name7s7 and respective ownership share7s71 and the international standard musical work code2 and 7cc7 provide the number of digital phonorecord deliveries of such work1 including limited downloads and interactive streams2 7,,ii7 identify and provide contact information for all copyright owners of musical works as to which a voluntary license1 rather than the blanket license1 is in effect with respect to the uses being reported2 and 7,,iii7 provide such other information as the ,register of ,copyrights shall require by regulation4 7iii7 ,format and maintenance of reports ,reports of usage provided by digital music providers to the mechanical licensing collective shall be in a machine-readable format that is compatible with the information technology systems of the mechanical licensing collective and meets the requirements of regulations adopted by the ,register of ,copyrights4 ,the ,register shall also adopt regulations setting forth requirements under which records of use shall be maintained and made available to the mechanical licensing collective by digital music providers engaged in covered activities under a blanket license4 7,b7 ,procurement of sound recording information ,in addition to obtaining sound recording names and featured artists1 a digital music provider shall engage in good-faith1 commercially reasonable efforts to obtain from copyright owners of sound recordings made available through the service of such digital music provider-- 7i7 producers1 international standard recording codes1 and other information commonly used in the industry to identify sound recordings and match them to the musical works they embody2 and 7ii7 information concerning the authorship and ownership of musical works1 including songwriters1 publisher names1 ownership shares1 and international standard musical work codes4 7,c7 ,payment of administrative assessment ,a digital music provider and any significant nonblanket licensee shall pay the administrative assessment established under paragraph 7#g77;,d7 in accordance with this subsection and applicable regulations4 7,d7 ,verification of payments by digital music providers 7i7 ,verification process ,the mechanical licensing collective may conduct an audit of a digital music provider operating under the blanket license to verify the accuracy of royalty payments by the digital music provider to the mechanical licensing collective as follows3 7,i7 ,the mechanical licensing collective may commence an audit of a digital music provider no more than once in any #c-year period to cover a verification period of no more than the #c preceding full calendar years1 and such audit may not audit records for any such #c-year verification period more than once4 7,,ii7 ,the audit shall be conducted by a qualified auditor1 who shall perform the audit during the ordinary course of business by examining the books1 records1 and systems of the digital music provider1 as well as underlying data1 according to generally accepted auditing standards and subject to applicable confidentiality requirements prescribed by the ,register of ,copyrights under subsection 7d77#ab77;,c74 7,,iii7 ,the digital music provider shall make such books1 records1 and data available to the qualified auditor and respond to reasonable requests for relevant information1 and shall use commercially reasonable efforts to provide access to relevant information maintained with respect to a digital music provider by third parties4 7,,iv7 ,to commence the audit1 the mechanical licensing collective shall file with the ,copyright ,office a notice of intent to conduct an audit of the digital music provider1 and shall simultaneously deliver a copy of such notice to the digital music provider4 ,the ,register of ,copyrights shall cause the notice of audit to be published in the ,federal ,register within #cj days of receipt4 7,v7 ,the qualified auditor shall determine the accuracy of royalty payments1 including whether an underpayment or overpayment of royalties was made by the digital music provider to the mechanical licensing collective2 provided1 however1 that before providing a final audit report to the copyright owner7s71 the qualified auditor shall provide a tentative draft of the report to the digital music provider and allow the digital music provider a reasonable opportunity to respond to the findings1 including by clarifying issues and correcting factual errors4 7,,vi7 ,the mechanical licensing collective shall pay the cost of the audit1 unless the qualified auditor determines that there was an underpayment by the digital music provider of #aj percent or more1 in which case the digital music provider shall bear the reasonable costs of the audit1 in addition to paying the amount of any underpayment to the mechanical licensing collective4 ,in case of an overpayment by the digital music provider1 the mechanical licensing collective shall provide a credit to the digital music provider4 7,,vii7 ,a digital music provider may not assert section #ejg or any other ,federal or ,state statute of limitations1 doctrine of laches or estoppel1 or similar provision as a defense to a legal action arising from an audit under this subparagraph provided that such legal action is commenced no more than #f years after the commencement of the audit that is the basis for such action4 7ii7 ,alternative verification procedures ,nothing in this subparagraph shall preclude the mechanical licensing collective and a digital music provider from agreeing to audit procedures different from those set forth herein2 provided1 however1 that notice of the audit shall still be provided to and published by the ,copyright ,office as set forth in clause 7i77,,iv74 7,e7 ,default under blanket license 7i7 ,condition of default ,a digital music provider shall be considered generally in default under a blanket license obtained under this subsection if the digital music provider-- 7,i7 fails to provide one or more monthly reports of usage to the mechanical licensing collective when due2 7,,ii7 fails to make a monthly royalty or late fee payment to the mechanical licensing collective when due1 in all or material part2 7,,iii7 provides one or more monthly reports of usage to the mechanical licensing collective that1 on the whole1 is or are materially deficient as a result of inaccurate1 missing1 or unreadable data1 where the correct data was available to the digital music provider and required to be reported under this section and applicable regulations2 7,,iv7 fails to pay the administrative assessment as required under this subsection and applicable regulations2 or 7,v7 after being provided written notice by the mechanical licensing collective1 refuses to comply with any other material term or condition of the blanket license under this section for a period of #fj days or longer4 7ii7 ,notice of default and termination ,in case of a general default by a digital music provider1 the mechanical licensing collective may proceed to terminate the blanket license of the digital music provider as follows3 7,i7 ,the mechanical licensing collective shall provide written notice to the digital music provider describing with reasonable particularity the default and advising that unless such default is cured within #fj days from the date of the notice1 the blanket license will automatically terminate at the end of that period4 7,,ii7 ,if the digital music provider fails to remedy the default within the #fj-;day period referenced in subclause 7,i71 the license shall terminate without any further action on the part of the mechanical licensing collective4 ,such termination renders the making of all digital phonorecord deliveries of all musical works 7and shares thereof7 covered by the blanket license for which the royalty or administrative assessment has not been paid actionable as acts of infringement under section #eja and subject to the remedies provided by sections #ejb through #ejf4 7iii7 ,notice to copyright owners ,the mechanical licensing collective shall provide written notice of any termination under this subparagraph to copyright owners of affected works4 7#e7 ,digital licensee coordinator 7,a7 ,in general ,the digital licensee coordinator shall be a single entity that-- 7i7 is a not-for-profit entity1 not owned by any other entity1 that is designated by the ,register of ,copyrights to carry out responsibilities under this subsection2 7ii7 is endorsed by and enjoys substantial support from digital music providers and significant nonblanket licensees that together represent the greatest share of the licensee market for uses of musical works in covered activities1 as measured over the preceding #c full calendar years2 7iii7 is able to demonstrate that it has1 or will have prior to the license availability date1 the administrative capabilities to perform the required functions of the digital licensee coordinator under this subsection2 and 7iv7 has been designated by the ,register of ,copyrights in accordance with subparagraph 7,b74 7,b7 ,designation of digital licensee coordinator 7i7 ,initial designation ,the ,register of ,copyrights shall initially designate the digital licensee coordinator within #i months of the enactment date1 in accordance with the same procedure as set forth for designation of the mechanical licensing collective in paragraph 7#c77;,b77i74 7ii7 ,periodic review of designation ,following the initial designation of the digital licensee coordinator1 the ,register shall1 every #e years1 beginning with the fifth full calendar year to commence after the initial designation1 determine whether the existing designation should be continued1 or a different entity meeting the criteria set forth in subparagraph 7,a7 should be designated1 in accordance with the same procedure as set forth for the mechanical licensing collective in paragraph 7#c77;,b77ii74 7iii7 ,inability to designate ,if the ,register is unable to identify an entity that fulfills the qualifications set forth in subparagraph 7,a7 that is willing to serve as digital licensee coordinator1 the ,register shall decline to designate a digital licensee coordinator4 ,the ,register's inability to designate a digital licensee coordinator shall not negate or otherwise affect any provision of this subsection except to the limited extent that a provision references the digital licensee coordinator4 ,in such case1 the reference to the digital licensee coordinator shall be without effect unless and until a new digital licensee coordinator is designated4 7,c7 ,authorities and functions 7i7 ,in general ,the digital licensee coordinator is authorized to perform the following functions1 subject to more particular requirements as set forth in this subsection3 7,i7 ,establish a governance structure1 criteria for membership1 and any dues to be paid by its members4 7,,ii7 ,engage in efforts to enforce notice and payment obligations with respect to the administrative assessment1 including by receiving information from and coordinating with the mechanical licensing collective4 7,,iii7 ,initiate and participate in proceedings before the ,copyright ,royalty ,judges to establish the administrative assessment under this subsection4 7,,iv7 ,initiate and participate in proceedings before the ,copyright ,office with respect to activities under this subsection4 7,v7 ,gather and provide documentation for use in proceedings before the ,copyright ,royalty ,judges to set rates and terms under this section4 7,,vi7 ,maintain records of its activities4 7,,vii7 ,engage in such other activities as may be necessary or appropriate to fulfill its responsibilities under this subsection4 7ii7 ,restriction on lobbying ,the digital licensee coordinator shall not engage in government lobbying activities2 provided1 however1 that it may engage in the activities set forth in clause 7i77,,iii71 7,,iv71 and 7,v74 7#f7 ,requirements for significant nonblanket licensees 7,a7 ,in general 7i7 ,notice of activity ,not later than #de days after the license availability date1 or #de days after the end of the first full calendar month in which an entity initially qualifies as a significant nonblanket licensee as defined in subsection 7e77#bi71 whichever occurs later1 a significant nonblanket licensee shall submit a notice of nonblanket activity to the mechanical licensing collective4 ,the notice of nonblanket activity shall comply in form and substance with requirements that the ,register of ,copyrights shall establish by regulation1 and a copy shall be made available to the digital licensee coordinator4 7ii7 ,reporting and payment obligations ,the notice of nonblanket activity submitted to the mechanical licensing collective shall be accompanied by a report of usage that contains the information described in paragraph 7#d77;,a77ii71 as well as payment of the administrative assessment as required under this subsection and applicable regulations4 ,thereafter1 subject to clause 7iii71 a significant nonblanket licensee shall continue to provide monthly reports of usage1 accompanied by payment of the administrative assessment1 to the mechanical licensing collective1 such reports and payments to be submitted not later than #de days after the end of the calendar month being reported4 7iii7 ,discontinuation of obligations ,an entity that has submitted a notice of nonblanket activity to the mechanical licensing collective that has ceased to qualify as a significant nonblanket licensee may so notify the collective in writing4 ,in such case1 as of the calendar month in which such notice is provided1 such entity shall no longer be required to provide reports of usage or pay the administrative assessment2 provided1 however1 that should such entity once again qualify as a significant nonblanket licensee1 it shall again be required to comply with clauses 7i7 and 7ii74 7,b7 ,reporting by mechanical licensing collective to digital licensee coordinator 7i7 ,monthly reports of noncompliant licensees ,the mechanical licensing collective shall provide monthly reports to the digital licensee coordinator setting forth any significant nonblanket licensees of which the collective is aware that have failed to comply with subparagraph 7,a74 7ii7 ,treatment of confidential information ,the mechanical licensing collective and digital licensee coordinator shall take appropriate steps to safeguard the confidentiality and security of financial and other sensitive data shared under this subparagraph1 in accordance with the confidentiality requirements prescribed by the ,register of ,copyrights under subsection 7d77#ab77;,c74 7,c7 ,legal enforcement efforts 7i7 ,federal court action ,should the mechanical licensing collective or digital licensee coordinator become aware that a significant nonblanket licensee has failed to comply with subparagraph 7,a71 either may commence an action in ,federal district court for damages and injunctive relief4 ,if the significant nonblanket licensee is found liable1 the court shall1 absent a finding of excusable neglect1 award damages in an amount equal to three times the total amount of the unpaid administrative assessment and1 notwithstanding anything to the contrary in section #eje1 reasonable attorney's fees and costs1 as well as such other relief as the court deems appropriate4 ,in all other cases1 the court shall award relief as appropriate4 ,any recovery of damages shall be payable to the mechanical licensing collective as an offset to total costs4 7ii7 ,statute of limitations for enforcement action ,any action described in this subparagraph shall be commenced within the time period set forth in section #ejg7;b74 7iii7 ,other rights and remedies preserved ,the ability of the mechanical licensing collective or digital licensee coordinator to bring an action under this subparagraph shall in no way alter1 limit or negate any other right or remedy that may be available to any party at law or in equity4 7#g7 ,funding of mechanical licensing collective 7,a7 ,in general ,the total costs of the mechanical licensing collective shall be funded by-- 7i7 an administrative assessment1 as such assessment is established by the ,copyright ,royalty ,judges pursuant to subparagraph 7,d7 from time to time1 to be paid by-- 7,i7 digital music providers that are engaged1 in all or in part1 in covered activities pursuant to a blanket license under this subsection2 and 7,,ii7 significant nonblanket licensees2 and 7ii7 voluntary contributions from digital music providers and significant nonblanket licensees as may be agreed with copyright owners4 7,b7 ,voluntary contributions 7i7 ,agreements concerning contributions ,except as provided in clause 7ii71 any voluntary contributions by digital music providers and significant nonblanket licensees shall be determined by private negotiation and agreement2 provided1 however1 that-- 7,i7 the date and amount of any voluntary contribution to the mechanical licensing collective shall be documented in a writing signed by an authorized agent of the mechanical licensing collective and the contributing party1 and 7,,ii7 such agreement shall be made available as required in proceedings before the ,copyright ,royalty ,judges to establish or adjust the administrative assessment in accordance with applicable statutory and regulatory provisions and rulings of the ,copyright ,royalty ,judges4 7ii7 ,treatment of contributions ,any such voluntary contribution shall be treated for purposes of an administrative assessment proceeding as a general offset to total costs of the mechanical licensing collective that would otherwise be recovered through the administrative assessment4 ,any allocation or reallocation of voluntary contributions between or among individual digital music providers or significant nonblanket licensees shall be a matter of private negotiation and agreement among such parties and outside the scope of the administrative assessment proceeding4 7,c7 ,interim application of accrued royalties ,in the event that the administrative assessment1 together with any funding from voluntary contributions as provided in subparagraphs 7,a7 and 7,b71 is inadequate to cover current total costs of the mechanical licensing collective1 the collective1 with approval of its board of directors1 may apply unclaimed accrued royalties on an interim basis to defray such costs1 subject to future reimbursement of such royalties from future collections of the assessment4 7,d7 ,determination of administrative assessment 7i7 ,administrative assessment to cover total costs ,the administrative assessment shall be used solely and exclusively to fund the total costs of the mechanical licensing collective4 7ii7 ,separate proceeding before copyright royalty judges ,the amount and terms of the administrative assessment shall be determined and established in a separate and independent proceeding before the ,copyright ,royalty ,judges1 according to the procedures described in clauses 7iii7 and 7iv74 ,the administrative assessment determined in such proceeding shall-- 7,i7 be wholly independent of royalty rates and terms applicable to digital music providers1 which shall not be taken into consideration in any manner in establishing the administrative assessment2 7,,ii7 be established by the ,copyright ,royalty ,judges in an amount that is calculated to defray the reasonable total costs of the mechanical licensing collective1 as such total costs are defined in subsection 7e77#ca72 7,,iii7 be assessed based on usage of musical works by digital music providers and significant nonblanket licensees in covered activities under both compulsory and nonblanket licenses2 7,,iv7 may be in the form of a percentage of royalties payable under this section for usage of musical works in covered activities 7regardless of whether a different rate applies under a voluntary license71 or any other usage-based metric reasonably calculated to equitably allocate the costs of the mechanical licensing collective across digital music providers and significant nonblanket licensees engaged in covered activities1 but shall include as a component a minimum fee for all digital music providers and significant nonblanket licensees2 and 7,v7 take into consideration not only anticipated future total costs and collections of the administrative assessment1 but also1 as applicable-- 7aa7 any portion of past actual total costs of the mechanical licensing collective not funded by previous collections of the administrative assessment or voluntary contributions because such collections or contributions together were insufficient to fund such costs2 7bb7 any past collections of the administrative assessment and voluntary contributions that exceeded past actual total costs of the mechanical licensing collective1 resulting in a surplus2 and 7cc7 the amount of any voluntary contributions by digital music providers or significant nonblanket licensees in relevant periods1 as described in subparagraphs 7,a7 and 7,b7 of paragraph 7#g74 7iii7 ,initial administrative assessment ,the procedure for establishing the initial administrative assessment shall be as follows3 7,i7 ,the ,copyright ,royalty ,judges shall commence a proceeding to establish the initial administrative assessment within one year of the enactment date by publishing a notice in the ,federal ,register seeking petitions to participate4 7,,ii7 ,the mechanical licensing collective and digital licensee coordinator shall participate in such proceeding1 along with any interested copyright owners1 digital music providers or significant nonblanket licensees that have notified the ,copyright ,royalty ,judges of their desire to participate4 7,,iii7 ,the ,copyright ,royalty ,judges shall establish a schedule for submission by the parties of information that may be relevant to establishing the administrative assessment1 including actual and anticipated total costs of the mechanical licensing collective1 actual and anticipated collections from digital music providers and significant nonblanket licensees1 and documentation of voluntary contributions1 as well as a schedule for further proceedings1 which shall include a hearing1 as they deem appropriate4 7,,iv7 ,the initial administrative assessment shall be determined1 and such determination shall be published in the ,federal ,register by the ,copyright ,royalty ,judges1 within #i months of commencement of the proceeding contemplated by this clause4 ,the determination shall be supported by a written record4 ,the initial administrative assessment shall be effective as of the license availability date1 and shall continue in effect unless and until an adjusted administrative assessment is established pursuant to an adjustment proceeding under clause 7iii74 7iv7 ,adjustment of administrative assessment ,the administrative assessment may be adjusted by the ,copyright ,royalty ,judges in a proceeding to occur no more than once every #b years1 in accordance with the following procedure3 7,i7 ,the mechanical licensing collective1 digital licensee coordinator1 or one or more interested copyright owners1 digital music providers or significant nonblanket licensees may file a petition with the ,copyright ,royalty ,judges in the month of ,january to commence a proceeding to adjust the administrative assessment1 if at least #b years have expired since the date of the most recent determination of the administrative assessment by the ,copyright ,royalty ,judges4 7,,ii7 ,notice of the commencement of such proceeding shall be published in the ,federal ,register in the month of ,february1 along with a schedule of requested information and additional proceedings1 as described in clause 7iii77,,iii74 ,the mechanical licensing collective and digital licensee coordinator shall participate in such proceeding1 along with any interested copyright owners1 digital music providers or significant nonblanket licensees that have notified the ,copyright ,royalty ,judges of their desire to participate4 7,,iii7 ,the adjusted administrative assessment1 which shall be supported by a written record1 shall be published in the ,federal ,register no later than #i months after the publication of the notice of commencement of the adjustment proceeding4 ,the adjusted administrative assessment shall take effect as of ,january #a of the following year4 7v7 ,adoption of voluntary agreements ,in lieu of reaching their own determination based on evaluation of relevant data1 the ,copyright ,royalty ,judges shall approve and adopt a negotiated agreement to establish the amount and terms of the administrative assessment that has been agreed to by the mechanical licensing collective1 on the one hand1 and the digital licensee coordinator 7or if none has been designated1 interested digital music providers and significant nonblanket licensees representing more than half of the market for uses of musical works in covered activities71 on the other2 provided1 however1 that the ,copyright ,royalty ,judges shall have the discretion to reject any such agreement for good cause shown4 ,an administrative assessment adopted under this clause shall apply to all digital music providers and significant nonblanket licensees engaged in covered activities during the period it is in effect4 7vi7 ,continuing authority to amend ,the ,copyright ,royalty ,judges shall retain continuing authority to amend a determination of an administrative assessment to correct technical or clerical errors1 or modify the terms of implementation1 for good cause1 with any such amendment to be published in the ,federal ,register4 7vii7 ,appeal of administrative assessment ,the determination of an administrative assessment by the ,copyright ,royalty ,judges shall be appealable1 within #cj days after publication in the ,federal ,register1 to the ,court of ,appeals for the ,district of ,columbia ,circuit by any party that fully participated in the proceeding4 ,the administrative assessment as established by the ,copyright ,royalty ,judges shall remain in effect pending the final outcome of any such appeal2 provided1 however1 that the mechanical licensing collective1 digital licensee coordinator1 digital music providers1 and significant nonblanket licensees shall implement appropriate financial or other measures within #c months of any modification of the assessment to reflect and account for such outcome4 7viii7 ,regulations ,the ,copyright ,royalty ,judges may adopt regulations to govern the conduct of proceedings under this paragraph4 7#h7 ,establishment of rates and terms under blanket license 7,a7 ,restrictions on ratesetting participation ,neither the mechanical licensing collective nor the digital licensee coordinator shall be a party to a proceeding to determine rates and terms for activities under this section as described in subsection 7c77#c77;,c72 provided1 however1 that either may gather and provide financial and other information for the use of a party to such a proceeding and comply with requests for information as required under applicable statutory and regulatory provisions and rulings of the ,copyright ,royalty ,judges4 7,b7 ,application of late fees ,in any proceeding described in subparagraph 7,a7 in which the ,copyright ,royalty ,judges establish a late fee for late payment of royalties for uses of musical works under this section1 such fee shall apply to covered activities under blanket licenses under this subsection1 as follows3 7i7 ,late fees for past due royalty payments shall accrue from the due date for payment until payment is received by the mechanical licensing collective4 7ii7 ,the availability of late fees shall in no way prevent a copyright owner or the mechanical licensing collective from asserting any other rights or remedies to which it may be entitled under this title4 7,c7 ,interim rate agreements ,for any covered activity for which no rate or terms have been established by the ,copyright ,royalty ,judges1 the mechanical licensing collective and a digital music provider may agree to an interim rate and terms for such activity2 provided1 however1 that any such interim rate and terms-- 7i7 shall be treated as nonprecedential and not cited or relied upon in any ratesetting proceeding before the ,copyright ,royalty ,judges or any other tribunal2 and 7ii7 shall automatically expire upon the establishment of a rate and terms for such covered activity by the ,copyright ,royalty ,judges1 except as may otherwise be agreed by the parties4 7#i7 ,transition to blanket licenses 7,a7 ,substitution of blanket license ,as of the license availability date1 a blanket license obtained by a digital music provider under this subsection shall1 without any interruption in license authority enjoyed by such digital music provider1 be automatically substituted for and supersede any existing license previously obtained by the digital music provider from a copyright owner under this section to engage in one or more covered activities with respect to a musical work2 provided1 however1 that the foregoing shall not apply to authority obtained from a record company to make and distribute permanent downloads unless and until such record company terminates such authority in writing as of the end of a monthly reporting period1 with a copy to the mechanical licensing collective4 7,b7 ,expiration of existing licenses ,except to the extent provided in subparagraph 7,a71 as of the license availability date1 licenses obtained under this section for covered activities prior to the license availability date shall no longer continue in effect4 7,c7 ,treatment of voluntary licenses ,a voluntary license for a covered activity in effect as of the license availability date will remain in effect unless and until it expires according to its terms1 or the parties agree to amend or terminate the license4 ,in a case where a voluntary license for a covered activity entered into before the license availability date incorporates the terms of this section by reference1 the terms so incorporated 7but not the rates7 shall be those in effect immediately prior to the license availability date1 and those terms shall continue to apply unless and until such license is terminated or amended1 or the parties enter into a new voluntary license4 7,d7 ,further acceptance of notices for covered activities by ,copyright ,office ,as of the enactment date-- 7i7 the ,copyright ,office shall no longer accept notices of intention with respect to covered activities2 and 7ii7 previously filed notices of intention will no longer be effective or provide license authority with respect to covered activities2 provided1 however1 that there shall be no liability pursuant to section #eja for the reproduction or distribution of a musical work 7or share thereof7 under a validly filed notice of intention through the license availability date4 7#aj7 ,prior unlicensed uses 7,a7 ,limitation on liability in general ,a copyright owner that commences an action pursuant to section #eja on or after ,january #a1 #bjah1 against a digital music provider for the infringement of the exclusive rights provided by paragraph 7#a7 or 7#c7 of section #ajf arising from the unauthorized reproduction or distribution of a musical work by such digital music provider in the course of engaging in covered activities prior to the license availability date1 shall1 as the copyright owner's sole and exclusive remedy against the digital music provider1 be eligible to recover the royalty prescribed under subsection 7c77#c77;,a7 and chapter #h of this title1 from the digital music provider1 provided that such digital music provider can demonstrate compliance with the requirements of subparagraph 7,b71 as applicable4 ,in all other cases the limitation on liability under this subparagraph shall not apply4 7,b7 ,requirements for limitation on liability ,the following requirements shall apply as of the enactment date through the license availability date to digital music providers seeking to avail themselves of the limitation on liability described in subparagraph 7,a73 7i7 ,no later than #cj days after first making a particular sound recording of a musical work available through its service via one or more covered activities1 or #cj days after the enactment date1 whichever occurs later1 a digital music provider shall engage in good-faith1 commercially reasonable efforts to identify and locate each copyright owner of such musical work 7or share thereof74 ,such required matching efforts shall include3 7,i7 ,good-faith1 commercially reasonable efforts to obtain from the owner of the corresponding sound recording made available through the digital music provider's service the following information3 7aa7 ,sound recording name1 featured artist1 producer1 international standard recording code1 and other information commonly used in the industry to identify sound recordings and match them to the musical works they embody4 7bb7 ,any available musical work ownership information1 including songwriter and publisher name7s71 percentage ownership share7s71 and international standard musical work code4 7,,ii7 ,employment of one or more bulk electronic matching processes that are available to the digital music provider through third-party vendors on commercially reasonable terms2 provided1 however1 that a digital music provider may rely on its own bulk electronic matching process if it has capabilities comparable to or better than such third-party offerings4 7ii7 ,the required matching efforts shall be repeated by the digital music provider no less than once per month for so long as the copyright owner remains unidentified or has not been located4 7iii7 ,if the required matching efforts are successful in identifying and locating a copyright owner of a musical work 7or share thereof7 by the end of the calendar month in which the digital music provider first makes use of the work1 the digital music provider shall provide statements of account and pay royalties to such copyright owner in accordance with this section and applicable regulations4 7iv7 ,if the copyright owner is not identified or located by the end of the calendar month in which the digital music provider first makes use of the work1 the digital music provider shall accrue and hold royalties calculated under the applicable statutory rate in accordance with usage of the work1 from initial use of the work until the accrued royalties can be paid to the copyright owner or are required to be transferred to the mechanical licensing collective1 as follows3 7,i7 ,accrued royalties shall be maintained by the digital music provider in accordance with generally accepted accounting principles4 7,,ii7 ,if a copyright owner of an unmatched work 7or share thereof7 is identified and located by or to the digital music provider before the license availability date1 the digital music provider shall-- 7aa7 within #de days after the end of the calendar month during which the copyright owner was identified and located1 pay the copyright owner all accrued royalties1 such payment to be accompanied by a cumulative statement of account that includes all of the information that would have been provided to the copyright owner had the digital music provider been providing monthly statements of account to the copyright owner from initial use of the work in accordance with this section and applicable regulations1 including the requisite certification under subsection 7c77#e72 7bb7 beginning with the accounting period following the calendar month in which the copyright owner was identified and located1 and for all other accounting periods prior to the license availability date1 provide monthly statements of account and pay royalties to the copyright owner as required under this section and applicable regulations2 and 7cc7 as of the monthly royalty reporting period commencing on the license availability date1 begin reporting usage and paying royalties for such musical work 7or share thereof7 for such reporting period and reporting periods thereafter to the mechanical licensing collective1 as required under this subsection and applicable regulations4 7,,iii7 ,if a copyright owner of an unmatched work 7or share thereof7 is not identified and located by the license availability date1 the digital music provider shall-- 7aa7 within #de days after the license availability date1 transfer all accrued royalties to the mechanical licensing collective1 such payment to be accompanied by a cumulative statement of account that includes all of the information that would have been provided to the copyright owner had the digital music provider been serving monthly statements of account on the copyright owner from initial use of the work in accordance with this section and applicable regulations1 including the requisite certification under subsection 7c77#e71 and accompanied by an additional certification by a duly authorized officer of the digital music provider that the digital music provider has fulfilled the requirements of clauses 7i7 and 7ii7 of subparagraph 7,b7 but has not been successful in locating or identifying the copyright owner2 and 7bb7 as of the monthly royalty reporting period commencing on the license availability date1 begin reporting usage and paying royalties for such musical work 7or share thereof7 for such period and reporting periods thereafter to the mechanical licensing collective1 as required under this subsection and applicable regulations4 7v7 ,suspension of late fees ,a digital music provider that complies with the requirements of this paragraph with respect to unmatched musical works 7or shares of works7 shall not be liable for or accrue late fees for late payments of royalties for such works until such time as the digital music provider is required to begin paying monthly royalties to the copyright owner or the mechanical licensing collective1 as applicable4 7,c7 ,adjusted statute of limitations ,notwithstanding anything to the contrary in section #ejg7;b71 with respect to any claim of infringement of the exclusive rights provided by paragraphs 7#a7 and 7#c7 of section #ajf against a digital music provider arising from the unauthorized reproduction or distribution of a musical work by such digital music provider to engage in covered activities that accrued no more than #c years prior to the license availability date1 such action may be commenced within #c years of the date the claim accrued1 or up to #b years after the license availability date1 whichever is later4 7,d7 ,other rights and remedies preserved ,except as expressly provided in this paragraph1 nothing in this paragraph shall be construed to alter1 limit1 or negate any right or remedy of a copyright owner with respect to unauthorized use of a musical work4 7#aa7 ,legal protections for licensing activities 7,a7 ,exemption for compulsory license activities ,the antitrust exemption set forth in subsection 7c77#c77;,b7 shall apply to negotiations and agreements between and among copyright owners and persons entitled to obtain a compulsory license for covered activities under this subsection1 and common agents acting on their behalf1 including with respect to the administrative assessment established under this subsection4 7,b7 ,limitation on common agent exemption ,notwithstanding the antitrust exemption provided in subsection 7c77#c77;,b7 and subparagraph 7,a71 except for the administrative assessment1 neither the mechanical licensing collective nor the digital licensee coordinator shall serve as a common agent with respect to the establishment of royalty rates or terms under this section4 7,c7 ,antitrust exemption for administrative activities ,notwithstanding any provision of the antitrust laws1 copyright owners and persons entitled to obtain a compulsory license under this section may designate the mechanical licensing collective to administer voluntary licenses for the reproduction or distribution of musical works in covered activities on their behalf2 provided1 however1 that-- 7i7 each copyright owner shall establish the royalty rates and material license terms of any such voluntary license individually and not in agreement1 combination1 or concert with any other copyright owner2 7ii7 each person entitled to obtain a compulsory license under this section shall establish the royalty rates and material license terms of any such voluntary license individually and not in agreement1 combination1 or concert with any other digital music provider2 and 7iii7 the mechanical licensing collective shall maintain the confidentiality of the voluntary licenses in accordance with the confidentiality provisions prescribed by the ,register of ,copyrights under subsection 7d77#ab77;,c74 7,d7 ,liability for good-faith activities ,the mechanical licensing collective shall not be liable to any person or entity based on a claim arising from its good-faith administration of policies and procedures adopted and implemented to carry out the responsibilities set forth in subparagraphs 7,j7 and 7,k7 of paragraph 7#c71 except to the extent of correcting an underpayment or overpayment of royalties as provided in paragraph 7#c77,l77i77,,vi72 provided1 however1 that it may be named as a stakeholder in an action between copyright owners if it is holding disputed funds that are the subject of such action4 ,for purposes of this subparagraph1 good-faith administration means administration in a manner that is not grossly negligent4 7,e7 ,preemption of ,state property laws ,the holding and distribution of funds by the mechanical licensing collective in accordance with this subsection shall supersede and preempt any ,state law 7including common law7 concerning escheatment or abandoned property1 or any analogous provision1 that might otherwise apply4 7#ab7 ,regulations 7,a7 ,adoption by register of copyrights and copyright royalty judges ,the ,register of ,copyrights may conduct such proceedings and adopt such regulations as may be necessary or appropriate to effectuate the provisions of this subsection1 except for regulations concerning proceedings before the ,copyright ,royalty ,judges to establish the administrative assessment1 which shall be adopted by the ,copyright ,royalty ,judges4 7,b7 ,judicial review of regulations ,except as provided in paragraph 7#g77;,d77vii71 regulations adopted under this subsection shall be subject to judicial review pursuant to chapter #g of title #e4 7,c7 ,protection of confidential information ,the ,register of ,copyrights shall adopt regulations to provide for the appropriate procedures to ensure that confidential1 private1 proprietary1 or privileged information contained in the records of the mechanical licensing collective and digital license coordinator is not improperly disclosed or used1 including through any disclosure or use by the board of directors or personnel of either entity1 and specifically including the unclaimed royalties oversight committee and the dispute resolution committee of the mechanical licensing collective4 7#ac7 ,savings clauses 7,a7 ,limitation on activities and rights covered ,this subsection applies solely to uses of musical works subject to licensing under this section4 ,the blanket compulsory license established hereunder shall not be construed to extend or apply to activities other than covered activities or to rights other than the exclusive rights of reproduction and distribution licensed under this section1 or serve or act as the basis to extend or expand the compulsory license under this section to activities and rights not covered by this section as of the enactment date4 7,b7 ,rights of public performance not affected ,the rights1 protections1 and immunities granted under this subsection1 the data concerning musical works collected and made available under this subsection1 and the definitions set forth in subsection 7e7 shall not extend to1 limit1 or otherwise affect any right of public performance in a musical work4 2 and 7#e7 by adding at the end the following new subsection3 7e7 ,definitions ,as used in this section3 7#a7 ,accrued interest ,the term accrued interest means interest accrued on accrued royalties1 as described in subsection 7d77#c77;,i77ii74 7#b7 ,accrued royalties ,the term accrued royalties means royalties accrued for the reproduction or distribution of a musical work 7or share thereof7 in a covered activity1 calculated in accordance with the applicable rate under this section4 7#c7 ,administrative assessment ,the term administrative assessment means the fee to be paid by digital music providers and significant nonblanket licensees that is established pursuant to subsection 7d77#g77;,d74 7#d7 ,blanket license ,the term blanket license means a compulsory license to engage in covered activities as described in subsection 7d77#a74 7#e7 ,budget ,the term budget means a statement of the financial position of the mechanical licensing collective for a fiscal year or quarter thereof based on estimates of expenditures during the period and proposals for financing them1 including a calculation of total costs4 7#f7 ,copyright owner ,the term copyright owner-- 7,a7 means the owner of the exclusive right of reproduction or distribution in a musical work1 in all or in part1 as provided in section #bja of this title2 and 7,b7 does not refer to ownership of any other right4 7#g7 ,covered activity ,the term covered activity means the activity of making a digital phonorecord delivery of a musical work1 including in the form of a permanent download1 limited download1 or interactive stream1 where such activity is subject to compulsory licensing under this section4 7#h7 ,digital music provider ,the term digital music provider means a person 7or persons operating under the authority of that person7 that1 with respect to a service engaged in covered activities licensed under this subsection-- 7,a7 has a direct contractual1 subscription1 or other economic relationship with end users of the service1 or1 if no such relationship with end users exists1 exercises direct control over the provision of the service to end users2 7,b7 is able to fully report on any revenues and consideration generated by the service2 and 7,c7 is able to fully report on usage of sound recordings of musical works by the service 7or procure such reporting74 7#i7 ,digital licensee coordinator ,the term digital licensee coordinator means the entity described in subsection 7d77#e74 7#aj7 ,digital phonorecord delivery ,the term digital phonorecord delivery means each individual delivery of a phonorecord by digital transmission of a sound recording that results in a specifically identifiable reproduction by or for any transmission recipient of a phonorecord of that sound recording1 regardless of whether the digital transmission is also a public performance of the sound recording or any musical work embodied therein1 and includes a permanent download1 a limited download1 or an interactive stream4 ,a digital phonorecord delivery does not result from a real-time1 noninteractive subscription transmission of a sound recording where no reproduction of the sound recording or the musical work embodied therein is made from the inception of the transmission through to its receipt by the transmission recipient in order to make the sound recording audible4 ,a digital phonorecord delivery does not include the digital transmission of sounds accompanying a motion picture or other audiovisual work as defined in section #aja of this title4 7#aa7 ,enactment date ,the term enactment date means the date of enactment of the ,music ,modernization ,act of #bjah4 7#ab7 ,individual download license ,the term individual download license means a license obtained by a record company under subsection 7b77#c7 to make and distribute1 or authorize the making and distribution of1 permanent downloads embodying a specific musical work 7or share of a work74 7#ac7 ,interactive stream ,the term interactive stream means a digital transmission of a sound recording of a musical work in the form of a stream1 where the performance of the sound recording by means of such transmission is not exempt under section #aad7;d77#a7 and does not in itself1 or as a result of a program in which it is included1 qualify for statutory licensing under section #aad7;d77#b74 ,an interactive stream is a digital phonorecord delivery4 7#ad7 ,interested ,the term interested1 as applied to a party seeking to participate in a proceeding under subsection 7d77#g77;,d71 is a party as to which the ,copyright ,royalty ,judges have not determined that the party lacks a significant interest in such proceeding4 7#ae7 ,license availability date ,the term license availability date means ,january #a following the second anniversary of the enactment of ,music ,modernization ,act of #bjah4 7#af7 ,limited download ,the term limited download means a digital transmission of a sound recording of a musical work in the form of a download1 where such sound recording is accessible for listening only for a limited amount of time or specified number of times4 7#ag7 ,matched ,the term matched1 as applied to a musical work 7or share thereof71 means that the copyright owner of such work 7or share thereof7 has been identified and located4 7#ah7 ,mechanical licensing collective ,the term mechanical licensing collective means the entity described in subsection 7d77#c77;,a74 7#ai7 ,musical works database ,the term musical works database means the database described in subsection 7d77#c77;,e74 7#bj7 ,notice of license ,the term notice of license means a notice from a digital music provider provided under subsection 7d77#b77;,a7 for purposes of obtaining a blanket license to engage in covered activities under subsection 7d74 7#ba7 ,notice of nonblanket activity ,the term notice of nonblanket activity means a notice from a significant nonblanket licensee provided under subsection 7d77#f77;,a7 for purposes of notifying the mechanical licensing collective that it has been engaging in covered activities4 7#bb7 ,permanent download ,the term permanent download means a digital transmission of a sound recording of a musical work in the form of a download1 where such sound recording is accessible for listening without restriction as to the amount of time or number of times it may be accessed4 7#bc7 ,qualified auditor ,the term qualified auditor means an independent1 certified public accountant with experience performing music royalty audits4 7#bd7 ,record company ,the term record company means an entity that invests in1 produces1 and markets sound recordings of musical works1 and distributes such sound recordings for remuneration through multiple sales channels4 7#be7 ,report of usage ,the term report of usage means a report reflecting an entity's usage of musical works in covered activities as described in subsection 7d77#d77;,a74 7#bf7 ,required matching efforts ,the term required matching efforts means efforts to identify and locate copyright owners of musical works as described in subsection 7d77#aj77;,b77i74 7#bg7 ,service ,the term service1 as used in relation to covered activities1 means any site or other facility through which sound recordings of musical works are made available by digital transmission to members of the public4 7#bh7 ,share ,the term share1 as applied to a musical work1 means a fractional ownership interest in such work4 7#bi7 ,significant nonblanket licensee ,the term significant nonblanket licensee means an entity1 including a group of entities under common ownership or control that1 acting under the authority of one or more voluntary or individual download licenses1 offers a service engaged in covered activities1 where such entity or group of entities-- 7,a7 is not currently operating under a blanket license obtained under this subsection and therefore is not obligated to provide reports of usage reflecting covered activities under subsection 7d77#d77;,a72 7,b7 has a direct contractual1 subscription1 or other economic relationship with end users of the service or1 if no such relationship with end users exists1 exercises direct control over the provision of the service to end users2 and 7,c7 either-- 7i7 at any time in a calendar month1 makes more than #e1jjj different sound recordings of musical works available through its service2 or 7ii7 derives revenue or other consideration in connection with such covered activities greater than #ej1jjj dollars in a calendar month1 or total revenue or other consideration greater than #ejj1jjj dollars during the preceding #ab calendar months4 7#cj7 ,songwriter ,the term songwriter means the author of all or part of a musical work1 including a composer or lyricist4 7#ca7 ,total costs ,the term total costs means the total costs of establishing1 maintaining1 and operating the mechanical licensing collective to fulfill its statutory functions1 including startup costs2 financing1 legal1 and insurance costs2 investments in information technology1 infrastructure1 and other long-term resources2 outside vendor costs2 costs of licensing1 royalty administration1 and enforcement of rights2 costs of bad debt2 and costs of automated and manual efforts to identify and locate copyright owners of musical works 7and shares thereof7 and match sound recordings to the musical works they embody2 provided1 however1 that total costs shall not include any added costs incurred by the mechanical licensing collective to provide services under voluntary licenses4 7#cb7 ,unclaimed accrued royalties ,the term unclaimed accrued royalties means accrued royalties eligible for distribution under subsection 7d77#c77;,j74 7#cc7 ,unmatched ,the term unmatched1 as applied to a musical work 7or share thereof71 means that the copyright owner of such work 7or share thereof7 has not been identified or located4 7#cd7 ,voluntary license ,the term voluntary license means a license for use of a musical work 7or share thereof7 other than a compulsory license obtained under this section4 4 7b7 ,technical and conforming amendments to section #hja ,section #hja7;b7 of title #ag1 ,united ,states ,code1 is amended-- 7#a7 in paragraph 7#a71 by striking ,the rates applicable under sections #aad7;f77#a77;,b71 #aae1 and #aaf shall be calculated to achieve the following objectives and inserting ,the rates applicable under sections #aad7;f77#a77;,b7 and #aaf shall be calculated to achieve the following objectives2 7#b7 by redesignating paragraph 7#h7 as paragraph 7#i72 and 7#c7 by inserting after paragraph 7#g7 the following new paragraph3 7#h7 ,to determine the administrative assessment to be paid by digital music providers under section #aae7;d74 ,the provisions of section #aae7;d7 shall apply to the conduct of proceedings by the ,copyright ,royalty ,judges under section #aae7;d7 and not the procedures set forth in this section1 or section #hjc1 #hjd1 or #hje4 4 7c7 ,effective date of amended rate setting standard ,the amendments made by subsections 7a77#c77;,d7 and 7b77#a7 shall apply to any proceeding before the ,copyright ,royalty ,judges that is pending on1 or commenced on or after1 the date of the enactment of this ,act4 7d7 ,technical and conforming amendments to title #cg1 part #che of the ,code of ,federal ,regulations ,within #i months after the date of the enactment of this ,act1 the ,copyright ,royalty ,judges shall amend the existing regulations for section #aae in part #che of title #ag1 ,code of ,federal ,regulations1 to conform definitions used in such part to the definitions of the same terms set forth in section #aae7;e7 of title #ag1 ,united ,states ,code1 as amended by subsection 7a74 ,in so doing1 the ,copyright ,royalty ,judges shall make adjustments to the language of the regulations as necessary to achieve the same purpose and effect as the original regulations with respect to the rates and terms previously adopted by the ,copyright ,royalty ,judges4 7e7 ,best practices working group ,not later than #a year after the date of the enactment of this ,act1 the ,register of ,copyrights shall establish a working group consisting of representatives of the mechanical licensing collective1 the digital licensee coordinator1 copyright owners1 digital music providers1 sound recording owners1 and performing rights societies to consider and advise on best practices to minimize the incidence of unidentified and unmatched musical works and facilitate and encourage the exchange of ownership information and prompt access to such information by and among such parties4 #c4 ,amendment to section #aad 7a7 ,repeal ,subsection 7i7 of section #aad of title #ag1 ,united ,states ,code1 is repealed4 7b7 ,proceedings not affected ,the repeal of section #aad7;i7 of title #ag1 ,united ,states ,code1 by subsection 7a7 shall not be taken into account in any proceeding to set or adjust the rates and fees payable for the use of sound recordings under section #aab7;e7 or section #aad7;f7 of such title that is pending on1 or commenced on or after1 the date of the enactment of this ,act4 7c7 ,decisions and precedents not affected ,the repeal of section #aad7;i7 of title #ag1 ,united ,states ,code1 by subsection 7a7 shall not have any effect upon the decisions1 or the precedents established or relied upon1 in any proceeding to set or adjust the rates and fees payable for the use of sound recordings under section #aab7;e7 or section #aad7;f7 of such title before the date of the enactment of this ,act4 #d4 ,random ,assignment of ,rate ,court ,proceedings ,section #acg of title #bh1 ,united ,states ,code1 is amended-- 7#a7 by striking ,the business and inserting 7a7 ,the business2 and 7#b7 by adding at the end the following new subsection3 7b7 7#a7 ,in the case of any performing rights society subject to a consent decree1 any application for the determination of a license fee for the public performance of music in accordance with the applicable consent decree shall be made in the district court with jurisdiction over that consent decree and assigned by lot to a judge of that district court according to that court's rules for the division of business among district judges currently in effect or as may be amended from time to time1 provided that any such application shall not be assigned to 7,a7 a judge to whom continuing jurisdiction over any performing rights society for any performing rights society consent decree is assigned or has previously been assigned1 or 7,b7 a judge to whom another proceeding concerning an application for the determination of a reasonable license fee is assigned at the time of the filing of the application4 ,this provision does not apply to applications to determine reasonable license fees made by individual proprietors under section #eac of title #ag4 7#b7 ,nothing in paragraph 7#a7 shall abrogate the right of any party to the applicable consent decree to make an application for a construction of any provision of the applicable consent decree to the judge to whom continuing jurisdiction over the applicable consent decree is currently assigned4 ,if a party to a consent decree makes such an application in connection with any rate proceeding1 such proceeding shall be stayed until the final determination of the construction application4 4