Federal Register / Vol. 88, No. 170 / Tuesday, September 5, 2023 / Rules and Regulations 60587 

1 88 FR 11398 (Feb. 23, 2023). 

2Perez v. Mortgage Bankers Ass’n, 575 U.S. 92, 

97 (2015) (quoting Shalala v. Guernsey Mem. Hosp., 

514 U.S. 87, 99 (1995)). 

3See 5 U.S.C. 553(b)(A), (d)(2). 

4The Office may issue a notice of proposed 

rulemaking regarding outstanding issues relating to 

adjustments (e.g., regarding the timing of royalty 

payments, invoices, and response files) at a later 

date. See 88 FR 6630 (Feb. 1, 2023). 

5Public Law 115–264, 132 Stat. 3676 (2018). 

6 84 FR 32274 (July 8, 2019). 

7 17 U.S.C. 115(d). Alternatively, DMPs have the 

option to engage in these activities, in whole or in 

part, through voluntary licenses with copyright 

owners. 

8 Id. at 115(d)(4)(A)(i). 

9 Id. at 115(d)(8)(B)(i). 

10 Id. at 115(c)(E)–(F), (d)(8)(B)–(D); id. at 

801(b)(1). 

11 Id. at 803(c)(7); see also id. at 115(d)(8)(B). 

12 Id. at 115(d)(8)(B)(i). 

13 Id. at 115(d)(4)(A)(ii)(III), (iii), (iv). 

14 Id. at 115(d)(4)(A)(iv)(II). 

15H.R. Rep. No. 115–651, at 5–6 (2018); S. Rep. 

No. 115–339, at 5 (2018); Staff of S. and H. Comms. 

On the Judiciary, 115th Cong., Report and SectionContinued 

Docket No. Type of regulation Location Enforcement 

date 

USCG–2023–0221 .................. Safety Zones (Parts 147 and 165) .................. Miami, FL ......................................................... 3/17/2023 

Michael Cunningham, 

Chief, Office of Regulations and 

Administrative Law, United States Coast 

Guard. 

[FR Doc. 2023–19058 Filed 9–1–23; 8:45 am] 

BILLING CODE 9110–04–P 

LIBRARY OF CONGRESS 

Copyright Office 

37 CFR Part 210 

[Docket No. 2023–2] 

Fees for Late Royalty Payments Under 

the Music Modernization Act 

AGENCY: U.S. Copyright Office, Library 

of Congress. 

ACTION: Interpretive rule; termination of 

notification of inquiry 

SUMMARY: The U.S. Copyright Office 

adopts the following interpretive rule 

regarding fees for late royalty payments 

under the Music Modernization Act’s 

statutory mechanical blanket license 

and terminates its notification of inquiry 

on this subject that was published on 

February 23, 2023. 

DATES: Effective September 5, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Rhea Efthimiadis, Assistant to the 

General Counsel, by email at meft@

copyright.gov or telephone at 202–707– 

8350. 

SUPPLEMENTARY INFORMATION: 

I. Background 

On February 23, 2023, the Copyright 

Office (‘‘Office’’) published a 

notification of inquiry (‘‘NOI’’) in the 

Federal Register seeking public 

comments regarding when fees for late 

royalty payments should be assessed in 

connection with reporting by digital 

music providers (‘‘DMPs’’) under the 

Orrin G. Hatch-Bob Goodlatte Music 

Modernization Act’s (‘‘MMA’s’’) 

statutory mechanical blanket license 

(the ‘‘blanket license’’).1 The Office 

opened the February NOI based on 

interested parties’ requests for guidance 

on this matter. 

Having carefully considered the 

comments and thoroughly examined the 

statute and legislative history, the Office 

is terminating the inquiry without 

issuing any regulations on this subject. 

Rather, the Office is issuing an 

interpretive rule to provide the 

mechanical licensing collective 

(‘‘MLC’’), DMPs, and other parties with 

its conclusion that the statute’s due date 

provisions are unambiguous. 

Interpretive rules ‘‘advise the public of 

the agency’s construction of the statutes 

and rules which it administers.’’ 2 Under 

the Administrative Procedure Act, 

interpretive rules are not subject to 

notice and comment procedures and can 

be published with an immediate 

effective date.3 Consequently, the 

publication of this document concludes 

this proceeding.4

A. Statutory Background 

The MMA substantially modified the 

statutory ‘‘mechanical’’ license for 

reproducing and distributing 

phonorecords of nondramatic musical 

works under 17 U.S.C. 115, including by 

switching from a song-by-song licensing 

system to a blanket licensing regime that 

became available on January 1, 2021 

(the ‘‘license availability date’’), 

administered by the MLC designated by 

the Office.5 The Office also designated 

a digital licensee coordinator (the 

‘‘DLC’’) to represent DMPs in 

proceedings before the Copyright 

Royalty Judges (‘‘CRJs,’’ also sometimes 

referred to as the ‘‘Copyright Royalty 

Board’’ or ‘‘CRB’’). The DLC also serves 

as a non-voting member of the MLC and 

carries out other functions.6 Under the 

MMA, DMPs are able to obtain the 

blanket license to make digital 

phonorecord deliveries of nondramatic 

musical works, including in the form of 

permanent downloads, limited 

downloads, or interactive streams, 

subject to various requirements, 

including payment and reporting 

obligations.7

As relevant to this proceeding, the 

MMA states that with respect to DMPs’ 

payment and reporting obligations 

under the blanket license, ‘‘monthly 

reporting shall be due on the date that 

is 45 calendar days . . . after the end of 

the monthly reporting period.’’ 8 The 

MMA also states that ‘‘[l]ate fees for past 

due royalty payments shall accrue from 

the due date for payment until payment 

is received by the [MLC].’’ 9 Other 

reporting and payment deadlines, 

including regulations governing 

estimates and adjustments, are 

regulatory in nature. These provisions 

are further discussed below. 

1. Statutory Division of Responsibility 

The Copyright Act, as amended by the 

MMA, assigns different responsibilities 

to the CRJs and Office with respect to 

the blanket license. Congress granted 

the CRJs the responsibility to set the 

blanket license’s royalty rates and 

terms.10 As part of this ratesetting 

authority, the CRJs’ determinations 

‘‘may include terms with respect to late 

payment[s].’’ 11 These ‘‘late fees’’ are a 

consequence of late royalty payments. 

While the CRJs’ authority to set such 

late fees predated the MMA, the MMA 

added a provision stating that, with 

respect to the blanket license, ‘‘[l]ate 

fees for past due royalty payments shall 

accrue from the due date for payment 

until payment is received by the 

[MLC].’’ 12

The Office’s responsibilities under the 

MMA include overseeing the 

administration of the blanket license, 

including by promulgating various 

regulations specifically required by 

Congress, such as those governing 

reporting and payment requirements for 

DMPs.13 Relevant to this proceeding, 

Congress directed the Office to adopt 

regulations ‘‘regarding adjustments to 

reports of usage by digital music 

providers, including mechanisms to 

account for overpayment and 

underpayment of royalties in prior 

periods.’’ 14 Additionally, Congress 

granted the Office ‘‘broad regulatory 

authority’’ 15 to ‘‘conduct such 


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60588 Federal Register / Vol. 88, No. 170 / Tuesday, September 5, 2023 / Rules and Regulations 

by-Section Analysis of H.R. 1551 by the Chairmen 

and Ranking Members of Senate and House 

Judiciary Committees, at 4 (Comm. Print 2018), 

https://www.copyright.gov/legislation/mma_

conference_report.pdf. 

16 17 U.S.C. 115(d)(12)(A). 

17 85 FR 58114 (Sept. 17, 2020). That proceeding 

involved multiple rounds of public comments 

through a notification of inquiry, 84 FR 49966 

(Sept. 24, 2019), a notice of proposed rulemaking 

(‘‘NPRM’’), 85 FR 22518 (Apr. 22, 2020), and an ex 

parte communications process. Guidelines for ex 

parte communications, along with records of such 

communications, including those referenced herein, 

are available at https://www.copyright.gov/ 

rulemaking/mma-implementation/ex-partecommunications.html. All Office rulemaking 

activity, including public comments, as well as 

educational material regarding the MMA, can 

currently be accessed via navigation from https:// 

www.copyright.gov/music-modernization. 

References to public comments in the Office’s 

proceedings are either cited in full or are by party 

name (abbreviated where appropriate), followed by 

‘‘NPRM Comments,’’ ‘‘Initial Comments,’’ ‘‘Reply 

Comments,’’ or ‘‘Ex Parte Letter,’’ as appropriate. 

18 37 CFR 210.27(d)(2)(i), (f), (g)(3)–(4). 

19 Id. at 210.27(k). 

20MLC NPRM Comments at 36–37, App. C at xiv; 

MLC Ex Parte Letter at 7–8 (Feb. 26, 2020); see also 

AIMP NPRM Comments at 4–5 (‘‘[L]ate royalty 

payments have been a significant problem for 

copyright owners, and the implementation of a late 

fee for any royalty amounts paid late was a 

significant step forward. The regulations as 

proposed, should remove any doubt that might 

interfere with those late fee payments.’’); Peermusic 

NPRM Comments at 5 (‘‘[W]e appreciate the 

Copyright Office’s rejection of the DLC request that 

underpayments, when tied to ‘estimates,’ should 

not be subject to the late fee provision of the CRJ 

regulations governing royalties payable under 

Section 115, and we would request that the 

regulations be clear on this point.’’ (citation 

omitted)). 

21 DLC NPRM Comments at 14. 

22 85 FR 58114, 58137; see also 85 FR 22518, 

22530 (‘‘Any applicable late fees are governed by 

the CRJs, and any clarification should come from 

them.’’). 

23 88 FR 54406 (Aug. 10, 2023). 

24 87 FR 80448 (Dec. 30, 2022). 

25Before participants settled the Phonorecords IV 

proceeding, DMPs Spotify and Amazon each 

proposed a version of what the DLC proposes 

here—that late fees would not be owed for most 

types of permitted adjustments to monthly or 

annual reports of usage. Corrected Written Direct 

Statement of Spotify USA Inc. at Tab B, 10–11, 

Determination of Royalty Rates and Terms for 

Making and Distributing Phonorecords 

(Phonorecords IV), No. 21–CRB–0001–PR (2023– 

2027) (CRB Oct. 29, 2021), https://app.crb.gov/ 

document/download/25899; Amazon’s Am. Written 

Direct Statement, Ex. A.1 at 10, Determination of 

Royalty Rates and Terms for Making and 

Distributing Phonorecords (Phonorecords IV), No. 

21–CRB–0001–PR (2023–2027) (CRB Mar. 8, 2022), 

https://app.crb.gov/document/download/26286. 

These proposals were not included in the final 

settlement, as approved by the CRJs. 

26This provision states that, except as provided 

in section 115(d)(4)(A)(i), ‘‘royalty payments shall 

be made on or before the twentieth day of each 

month and shall include all royalties for the month 

next preceding.’’ 17 U.S.C. 115(c)(2)(I). 

27This provision states that ‘‘[a] digital music 

provider shall report and pay royalties to the [MLC] 

under the blanket license on a monthly basis in 

accordance with . . . subsection (c)(2)(I), except 

that the monthly reporting shall be due on the date 

that is 45 calendar days, rather than 20 calendar 

days, after the end of the monthly reporting 

period.’’ Id. at 115(d)(4)(A)(i). 

28 37 CFR 385.3. 

29 Id. Parties in the most recent section 115 

ratesetting proceeding recognized that this language 

‘‘does not acknowledge that the [MLC] has 

responsibility for collecting payment under the 

blanket license for digital uses’’ and moved to add 

the following language to the end of the quoted 

language: ‘‘except that where payment is due to the 

mechanical licensing collective under 17 U.S.C. 

115(d)(4)(A)(i), late fees shall accrue from the due 

date until the mechanical licensing collective 

receives payment.’’ Mot. to Req. Issuance of 

Amendment to Determination of Royalty Rates and 

Terms for Making and Distributing Phonorecords 

(Phonorecords IV) Pursuant to 17 U.S.C. [sec.] 

803(C)(4) at 1–2, Determination of Royalty Rates 

and Terms for Making and Distributing 

Phonorecords (Phonorecords IV), No. 21–CRB– 

0001–PR (2023–2027) (CRB Jan. 10, 2023), https:// 

app.crb.gov/document/download/27417. 

30 87 FR 80448, 80452 n.20. 

31 37 CFR 385.21 (covering the Phonorecords IV 

period); id. at pt. 385, App. A, 385.21 (covering the 

Phonorecords III period). 

32 87 FR 31422 (May 24, 2022). 

33MLC Ex Parte Letter at 8 (Oct. 17, 2022); MLC 

Ex Parte Letter at 2–5 (Dec. 21, 2022); Comments 

proceedings and adopt such regulations 

as may be necessary or appropriate to 

effectuate the provisions of [the MMA 

pertaining to the blanket license].’’ 16

B. Regulatory Background 

On September 17, 2020, the Office 

issued an interim rule adopting 

regulations concerning reporting and 

payment requirements under the 

blanket license (the ‘‘September 2020 

Rule’’).17 The September 2020 Rule 

addressed the ability of DMPs to make 

adjustments to monthly and annual 

reports and related royalty payments, 

including to correct errors and replace 

estimated royalty calculation inputs 

(e.g., the amount of applicable public 

performance royalties) with finally 

determined figures.18 The interim 

regulations permit DMPs to make 

adjustments in other situations as well, 

such as in exceptional circumstances, 

following an audit, or in response to a 

change in the applicable statutory rates 

or terms adopted by the CRJs.19

During the rulemaking proceeding 

that culminated in the September 2020 

Rule, the MLC and DLC raised differing 

views about when a payment should be 

considered ‘‘late,’’ thus triggering the 

obligation to pay a late fee, in the 

context of the MMA, the Office’s 

adjustments to reports of usage 

regulations, and the CRJs’ late fee 

regulations. The MLC’s view was that 

the MMA requires a DMP’s payment to 

be considered ‘‘late’’ if not received by 

the 45th calendar day after the end of 

the monthly reporting period.20 The 

DLC took an opposing view and 

contended that late fees should not be 

due for any timely adjustments to good 

faith estimates made pursuant to the 

Office’s regulations or in response to a 

change in rates and terms made by the 

CRJs.21 At the time of the September 

2020 Rule, the Office declined to 

address the interplay between the 

statute, the CRJs’ late fee regulation, and 

the Office’s provisions for adjustments, 

in part, because it believed that ‘‘the 

CRJs may wish themselves to . . . 

update their operative regulation in 

light of the [September 2020 Rule].’’ 22

Since the Office issued the September 

2020 Rule, the CRJs published two 

ratesetting determinations applicable to 

the blanket license: the Phonorecords III 

Remand determination (covering the 

2018–2022 rate period) 23 and the 

Phonorecords IV determination 

(covering the 2023–2027 rate period).24

Neither determination addressed the 

competing views within the industry on 

when the CRJ’s late fee provisions are 

triggered. 

The Phonorecords IV determination, 

which adopted the terms of the 

participants’ settlement,25 contains the 

current late fee regulation, which states 

that, ‘‘[a] Licensee shall pay a late fee of 

1.5% per month, or the highest lawful 

rate, whichever is lower, for any 

payment owed to a Copyright Owner 

and remaining unpaid after the due date 

established in 17 U.S.C. 115(c)(2)(I) 26 or 

17 U.S.C. 115(d)(4)(A)(i),27 as applicable 

and detailed in part 210 of [the Office’s 

regulations governing reporting and 

payments under the statutory 

mechanical license].’’ 28 It further 

provides that ‘‘[l]ate fees shall accrue 

from the due date until the Copyright 

Owner receives payment.’’ 29 In 

approving the parties’ settlement, the 

CRJs found that the late fee provision 

was ‘‘not unreasonable.’’ 30

Both the Phonorecords III Remand 

and Phonorecords IV determinations 

resulted in rate calculations that use 

multiple steps to ultimately determine 

royalties due under the blanket 

license.31 These calculations require 

inputs that may not be known at the 

time a DMP’s reporting is due under the 

MMA, including the amounts expensed 

by DMPs for sound recording licenses 

and for musical works’ public 

performance licenses as a factor in the 

calculation to determine mechanical 

royalties due under the blanket license. 

In late 2022, before the CRJs’ 

Phonorecords III Remand and 

Phonorecords IV determinations were 

finalized, the MLC and DLC submitted 

comments to the Office following a May 

2022 amendment 32 to the September 

2020 Rule and again raised the issue of 

late fees, confirming their continued 

disagreement on the subject.33 Both the 


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of DLC to Suppl. Interim Rule Concerning Reports 

of Adjustment and Annual Reports of Usage at 3, 

MMA Notice of License, Notices of Nonblanket 

Activity, Data Collection and Delivery Efforts, 

Reports of Usage and Payment, No. 2020–5 (U.S. 

Copyright Office July 8, 2022) (‘‘DLC July 2022 

Comments’’), https://www.regulations.gov/ 

comment/COLC-2020-0005-0029. 34See 85 FR at 58136–37; MLC Ex Parte Letter at 

8 (Oct. 17, 2022); MLC Ex Parte Letter at 2–5 (Dec. 

21, 2022); DLC July 2022 Comments at 3. 35 DLC July 2022 Comments at 3. 36MLC Ex Parte Letter at 2–5 (Dec. 21, 2022). 37MLC Ex Parte Letter at 8 (Oct. 17, 2022). 38See 17 U.S.C. 115(d)(8)(B)(i) (‘‘Late fees for past 

due royalty payments shall accrue from the due 

date for payment until payment is received by the 

mechanical licensing collective.’’). 39The Office also received letters from members 

of Congress reflecting their views that any late fees 

for underpayments begin to accrue starting 45 days 

after the end of a monthly reporting period. Letter 

from Ted W. Lieu, Ben Cline, Jerrold Nadler, Henry 

C. ‘‘Hank’’ Johnson, Laurel M. Lee, Adam B. Schiff 

& Harriet M. Hageman, Members of Congress to 

Shira Perlmutter, Register of Copyrights (May 9, 

2023), https://www.copyright.gov/rulemaking/mmalate-fees/mma-late-fee-letter-house.pdf; Letter from 

Thom Tillis, Chris Coons, Marsha Blackburn, Bill 

Hagerty & Mazie Hirono, Members of Congress to 

Shira Perlmutter, Register of Copyrights (May 9, 

2023), https://www.copyright.gov/rulemaking/mmalate-fees/mma-late-fee-letter-senate.pdf. 

40See Copyright Alliance Reply Comments at 2; 

Dina LaPolt Initial Comments at 3–4; MLC Initial 

Comments at 2–3; NMPA Initial Comments at 2; 

NSAI Reply Comments at 2; SONA Initial 

Comments at 2; Songwriters Guild of Am., Inc., 

Soc’y of Composers & Lyricists, and Music Creators 

N. Am. Initial Comments at 3. 

41NMPA Initial Comments at 2; see also MLC 

Initial Comments at 10–11 (calling the provisions at 

issue ‘‘unambiguous’’ and ‘‘detailed’’ and 

identifying that ‘‘[f]or the blanket license, the MMA 

specifically changes the due date from 20 days to 

45 days after the end of the month’’), 11–12 

(‘‘Neither the ability to use estimates, nor the 

requirement to follow up to correct those estimates, 

changes the fact that DSPs are responsible for the 

payment of ‘all royalties’ by the statutory due date, 

and that late fees ‘shall accrue’ from that mandated 

due date.’’); NSAI Reply Comments at 1–2 (noting 

that Congress’s intention was ‘‘clear’’ when it 

passed the late fee provisions). 

42Copyright Alliance Reply Comments at 2, n.2 

(citing H.R. Rep. No. 115–651, at 27 (2018)). 

43NMPA Initial Comments at 4. 

44 Id. (citing 17 U.S.C. 115(d)(10)(B)(v)). 

45See, e.g., Copyright Alliance Reply Comments 

at 2; NSAI Reply Comments at 2 (‘‘Because DMPs 

are permitted to make good-faith estimates when 

reporting and paying royalties, there must be a 

safeguard in place to hold them accountable.’’); 

SONA Initial Comments at 2 (‘‘If late fees were to 

apply only after the adjustment due date, DMPs will 

have latitude to underestimate amounts due and 

make more gains at the expense of songwriters and 

copyright holders by continuing to have those 

additional funds in their possession for as long as 

possible without incentive to change their royalty 

reporting practices.’’); Songwriters Guild of Am., 

the Soc’y of Composers & Lyricists, and Music 

Creators N. Am. Initial Comments at 3 (adding that 

the ‘‘Congressional resort to late fees as a motivator 

was necessary in light of the fact that the MMA 

limits the ability of music creators and copyright 

owners to utilize copyright infringement litigation 

as an alternative means to compel accurate and 

timely royalty compliance’’). 

46See, e.g., Copyright Alliance Reply Comments 

at 3; Dina LaPolt Initial Comments at 7 (‘‘[B]y the 

valuation and market capitalization of the DMPs 

noted, they could conceivably make an 

overestimation on their monthly royalty payments 

to avoid paying a late fee and would not be 

burdened, whereas making an underestimation 

severely impacts the daily lives of songwriters 

forcing them to wait for their adjusted income.’’); 

SONA Initial Comments at 5 (‘‘[P]aying late fees or 

otherwise making an overestimation on the DMPs’ 

monthly royalty payments is not a severe burden to 

these companies, whereas making an 

underestimation significantly and negatively 

impacts the daily lives of songwriters.’’). 

47NSAI Reply Comments at 2. 

48 DLC Initial Comments at 1. 

MLC and DLC requested the Office 

provide guidance and regulatory 

amendments.34 The DLC requested that 

the Office ‘‘specify that when both the 

initial estimated payments and the later 

adjustment of such payments to account 

for the updated and finalized 

information are made according to the 

timelines established in the regulations, 

such payments are proper and have 

been made by the ‘due date for payment’ 

as set forth in 17 U.S.C. [sec.] 

115(d)(8)(B)(i).’’ 35 The MLC opposed 

the DLC’s position 36 and instead 

proposed regulatory language providing 

that nothing in the adjustment 

provisions ‘‘shall change a blanket 

licensee’s liability for late fees, where 

applicable.’’ 37

II. Discussion 

The Office’s February NOI sought 

public comments on this disagreement 

and explained that, while it ‘‘typically 

does not offer interpretations of the 

CRJs’ regulations,’’ the Office is squarely 

within its authority to advise the public 

on the construction of the Copyright 

Act.38 Interested parties, including the 

MLC, National Music Publishers’ 

Association (‘‘NMPA’’), DLC, 

publishers, groups representing 

songwriters, and others submitted 

comments responding to the Office’s 

NOI.39

A. Responsive Comments 

1. Commenters Supporting the MLC’s 

Interpretation 

The Copyright Alliance, Dina LaPolt, 

NMPA, Nashville Songwriters 

Association International (‘‘NSAI’’), 

Songwriters of North America 

(‘‘SONA’’), Songwriters Guild of 

America, Society of Composers & 

Lyricists, and Music Creators North 

America supported the MLC’s position 

that the MMA’s plain language indicates 

that the due date for payment is 45 

calendar days after the end of a monthly 

reporting period and that late fees begin 

accruing after that point in time or that 

equitable policy considerations dictate 

the same result.40

These parties generally argued that 

the MMA’s plain language is conclusive 

with respect to the blanket license’s 

‘‘due date for payment.’’ The NMPA 

reasoned that ‘‘Congress was clear and 

unambiguous in establishing precisely 

when late fees shall begin to accrue,’’ as 

‘‘the date that is 45 calendar days . . . 

after the end of the monthly reporting 

period.’’ 41 The Copyright Alliance 

echoed this reasoning, adding that there 

is language in the MMA’s legislative 

history stating that a DMP must provide 

the MLC certain data ‘‘along with its 

royalty payments due 45 calendar days 

after the end of a monthly reporting 

period.’’ 42

The NMPA added that the statute 

does not contain any exceptions for 

underpayments, including for those 

‘‘caused by an error, a misestimate, or 

any other reason,’’ including ‘‘where the 

DMP later corrects its underpayment 

through an adjustment.’’ 43 It noted that 

Congress could have created an 

exemption to when late fees accrue, as 

it did for royalty payments under the 

optional statutory limitation on liability 

for certain unlicensed uses prior to the 

license availability date, but it did not 

do so.44

These parties also made policy 

arguments supporting their view that 

late fees should begin to accrue starting 

after 45 calendar days after the end of 

a monthly reporting period. For 

example, they argued that their 

approach would incentivize DMPs to 

pay the MLC—and, in turn, songwriters 

and publishers—accurately and on time 

and that the DLC’s opposing 

interpretation, discussed below, would 

disincentivize accurate and timely 

royalty payments.45 Some argued that 

the harm to songwriters under the DLC’s 

position would be significant, while the 

MLC’s position would not cause 

significant harm to DMPs.46 As NSAI 

explained, ‘‘[a]n underpayment of even 

a few hundred dollars for a few months 

can mean meaningful life decisions for 

a songwriter. The gravity of that must be 

considered against the inconsequential 

burden a minimal late fee imposes on a 

DMP.’’ 47

2. The DLC’s Interpretation 

The DLC contends that ‘‘the clear text 

of the statute and relevant regulations, 

unbroken historical precedent, and 

interests of efficiency and equity’’ 

support its position that late fees are not 

due for payments that are compliant 

with the Office’s estimate and 

adjustment reporting regulations.48 The 

DLC explained that because the MMA 

states that monthly payments must 

‘‘comply with requirements that the 

Register of Copyrights shall prescribe by 

regulation’’ and because the CRJs 

referenced the Office’s section 115 


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49 I.e., the Office’s ‘‘reporting regulations in part 

210 of title 37 of the CFR.’’ DLC Reply Comments 

at 7. 

50 DLC Initial Comments at 4–5. 

51 Id. at 2–3. 

52 DLC Reply Comments at 8–9. 

53 DLC Initial Comments at 5. 

54 DLC Reply Comments at 6. 

55Courts commonly review a statute’s text, 

context, statutory scheme, and cannons of statutory 

construction when considering whether a statute is 

ambiguous. See, e.g., Household Credit Servs., Inc. 

v. Pfennig, 541 U.S. 232, 239–42 (2004); Zuni Pub. 

School Dist. No. 89 v. Dept. of Ed., 550 U.S. 81, 98– 

99 (2007); FDA v. Brown & Williamson Tobacco 

Corp., 529 U.S. 120, 133 (2000); Dole v. United 

Steelworkers of Am., 494 U.S. 26, 36 (1990). 

56 17 U.S.C. 115(d)(8)(B)(i). 57Perrin v. United States, 444 U.S. 37, 42 (1979). 58 Date, Black’s L. Dictionary (11th ed. 2019) 

(defining ‘‘due date’’ in the definition of ‘‘date’’). 59 17 U.S.C. 115(d)(4)(A)(i) (emphasis added). 60 Id. at 115(c)(2)(I) (emphasis added). The Office 

previously addressed the interaction between 

sections 115(c)(2)(I) and 115(d)(4)(A)(i), concluding 

that ‘‘both provisions must be read as referring to 

both reporting and payment.’’ 85 FR 22518, 22527. 

61 DLC Reply Comments at 6. 

62Pub. Citizen v. U.S. Dep’t of Just., 491 U.S. 440, 

454 (1989) (quoting Green v. Bock Laundry Machine 

Co., 490 U.S. 504, 509 (1989)) (‘‘Where the literal 

reading of a statutory term would ‘compel an odd 

result,’ we must search for other evidence of 

congressional intent to lend the term its proper 

scope.’’). 

63For example, one such input is the amount 

paid for the public performance of musical works. 

It is common for those public performance rates to 

be set on an interim basis, with final rates set later 

and applying retroactively. U.S. Copyright Office, 

Copyright and the Music Marketplace 41–42 (2015), 

https://www.copyright.gov/policy/ 

musiclicensingstudy/copyright-and-the-musicmarketplace.pdf. 

64See 37 CFR 385.12(b)(1), (b)(2) (2009) (using 

both percentage of service revenue and royalties for 

the public performance of musical works as inputs 

to determine a DMPs’ mechanical royalty rate); 74 

FR 4510, 4531 (Jan. 26, 2009). 

65A group representing copyright owners 

proposed ‘‘a unitary rate structure for all interactive 

streaming and limited downloads’’ in the 

Phonorecords III proceeding. Johnson v. Copyright 

Royalty Bd., 969 F.3d 363, 371 (D.C. Cir. 2020) 

(citing 84 FR 1918, 1924, 1930–1931 (Feb. 5, 2019)). 

regulations in their late fee provision,49

‘‘[t]aken together, these provisions 

compel the conclusion that when a 

payment is made on or before the due 

date, and is made in compliance with 

the regulatory requirements, it is not 

‘late’ or otherwise legally deficient, even 

if it is based on estimated inputs, or is 

an adjustment to a payment made 

earlier.’’ 50 It asserts that ‘‘estimates and 

adjustments are a necessary 

consequence of the CRB’s . . . rate 

structure’’ because the required inputs 

under the rate structure (e.g., royalties 

for sound recordings or the public 

performance of musical works) may not 

be final or known when reporting is due 

to the MLC, therefore DMPs must be 

allowed to rely on estimates and 

adjustments and not incur late fees 

when doing so.51

The DLC also offered policy-based 

reasons in support of its position. For 

example, it claimed that ‘‘[i]f DMPs are 

threatened with late fees for every 

routine royalty payment, one can 

reasonably expect that at least some 

[DMPs] will systematically over pay 

royalties’’ and subsequent 

‘‘clawback[s]’’ would cause operational 

challenges for the MLC and harm to 

songwriters and publishers.52 Finally, 

the DLC claimed that ‘‘[i]t defies 

common sense that failing to guess at 

and pay royalties at not-yet-determined 

rates would trigger late fees,’’ 53 and 

suggested that Congress would not have 

intended such a ‘‘facially illogical 

result.’’ 54

B. Statutory Analysis 

1. Monthly Royalty Payments Made to 

the MLC More Than 45 Days After the 

End of the Applicable Monthly 

Reporting Period Are Late Under the 

Statute 

The Office has reviewed the MMA’s 

text, context, and statutory scheme 

along with cannons of statutory 

construction in its consideration of 

whether the statute is ambiguous.55 It 

concludes that the statute’s (i) due date 

provisions, (ii) direction to the Office to 

adopt regulations governing 

adjustments, and (iii) delegation of 

authority to the CRJs to promulgate late 

fee provisions are compatible and 

unambiguous. The Office, therefore, 

declines to issue any associated 

regulations. 

Starting with the statute’s text, section 

115(d)(8)(B)(i) states that CRJ-adopted 

‘‘[l]ate fees for past due royalty 

payments [under blanket licenses] shall 

accrue from the due date for payment 

until payment is received by the 

mechanical licensing collective.’’ 56 The 

phrase ‘‘due date for payment’’ is 

undefined and, therefore, these words 

must ‘‘be interpreted as taking their 

ordinary, contemporary, common 

meaning.’’ 57 Black’s Law Dictionary 

defines ‘‘due date’’ as ‘‘[t]he date on 

which something is supposed to 

happen, esp. as a matter of 

requirement.’’ 58

In the Office’s view, ‘‘due date for 

payment’’ unambiguously refers to the 

‘‘date on which’’ monthly royalty 

payments are required to be delivered to 

the MLC. Section 115(d)(4)(A)(i) 

provides that ‘‘[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 . . . subsection 

(c)(2)(I), except that the monthly 

reporting shall be due on the date that 

is 45 calendar days, rather than 20 

calendar days, after the end of the 

monthly reporting period.’’ 59 Section 

(c)(2)(I), in turn, states that monthly 

‘‘royalty payments . . . shall include all 

royalties for the month next 

preceding.’’ 60 Taken together, the plain 

and natural meaning of the statute is 

that ‘‘all royalties’’ for a given monthly 

reporting period are ‘‘due’’ no later than 

45 days after the end of the monthly 

reporting period. Thus, any royalties 

received by the MLC for such reporting 

period after this ‘‘due date for payment’’ 

are late. They are ‘‘past due royalty 

payments’’ that are subject to such ‘‘late 

fees’’ as the CRJs may adopt. 

The DLC argues that this construction 

of the statute yields an absurd result.61

While a statutory ambiguity can be 

found if clear statutory text would 

produce an absurd result,62 that is not 

the case here. Rather, the Office 

understands that the DLC’s concerns are 

really aimed at the potential effect of the 

CRJs’ regulations, not the statute itself. 

The fact that the final amount due on 

the statutory due date may not be 

known to a DMP on that date is a 

product of the rate structure adopted by 

the CRJs, which involves calculating 

royalties using inputs that may not be 

finally determined at the time the 

royalty is due, necessitating the use of 

estimates and adjustments.63

To the extent Congress disapproved of 

this result, and instead intended the 

result advocated for by the DLC, 

Congress either would not have adopted 

the version of section 115(d)(8)(B)(i) that 

it did or it would have made other 

changes to the statute. A version of the 

CRJs’ current rate structure has been in 

place since the Phonorecords I 

settlement,64 which predated the 

MMA’s enactment by nine years. 

Congress would have been aware of the 

CRJs’ longstanding rate structure in 

passing the MMA, including with 

respect to the operation of estimates and 

adjustments, therefore the decision to 

enact section 115(d)(8)(B)(i) and the rest 

of the MMA against that backdrop must 

be understood as intentional. 

This understanding is not 

incompatible with the MMA’s direction, 

in section 115(d)(4)(A)(iv)(II), for the 

Office to adopt regulations regarding 

adjustments. First, while the MMA 

requires the Office to establish 

regulations regarding adjustments, it 

does not require the CRJs to set royalty 

rates and terms using inputs that are not 

final at the time the royalties are due. 

For example, the CRJs could have set a 

per-stream rate that did not use any 

such inputs.65 Second, while DMPs who 

take advantage of the Office’s estimate 


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Federal Register / Vol. 88, No. 170 / Tuesday, September 5, 2023 / Rules and Regulations 60591 

66 It appears that not all DMPs use the adjustment 

provisions. MLC Ex Parte Letter at 4 (Dec. 21, 2022) 

(noting that ‘‘over half of the blanket licensees 

submitted annual reports of usage for 2021 without 

any concurrent adjustment’’). 

67MLC Initial Comments at 8. 

68NMPA Initial Comments at 4 (citing 17 U.S.C. 

115(d)(10)(B)(v)). 

69Bittner v. United States, 598 U.S. 85, 94 (2023). 

70MLC Initial Comments at 6 n.1. 

71NMPA Initial Comments at 8. 

72 DLC Initial Comments at 6; DLC Reply 

Comments at 6 (‘‘It is entirely unclear why that is 

true for interim section 115 rates but not true for 

interim rates or payments to PROs or labels.’’). 

73 17 U.S.C. 115(c)(1)(C). 

74See id. at 115(c)(2)(I). 

75See id. at 115(d)(4)(A)(i). 

76See id. at 115(c)(1)(C). 

77See id. 

and adjustment regulations 66 may have 

to pay late fees under the CRJs’ 

regulations for any underpayments, that 

has no bearing on whether the statutory 

text is ambiguous. As the MLC points 

out, the estimate and adjustment 

regulations adopted by the Office 

pursuant to that provision allow DMPs 

‘‘to use estimates where appropriate 

without violating the law[,] . . . but not 

the ability to pay royalties later than the 

statutory due date.’’ 67

Further, as the NMPA noted, Congress 

knows how to exempt certain types of 

royalty payments from incurring late 

fees, as it did with the optional statutory 

limitation on liability for certain 

unlicensed uses prior to the license 

availability date.68 Under the negativeimplication cannon of statutory 

construction, ‘‘[w]hen Congress 

includes particular language in one 

section of a statute but omits it from a 

neighbor, we normally understand that 

difference in language to convey a 

difference in meaning,’’ 69 i.e., that 

textual difference is presumed to be 

intentional. 

2. Distinguishing the Phonorecords III 

Remand Determination 

Commenters appear to be in 

agreement that late fees do not apply to 

adjustments resulting from the change 

in rates and terms following the CRJs’ 

Phonorecords III Remand 

determination. For example, the MLC 

reasoned that where applicable royalty 

rates are changed, as with the 

Phonorecords III Remand proceeding, 

there would be no underpayment to 

trigger late fees, as the ‘‘rates were not 

in effect at those times.’’ 70 Similarly, 

the NMPA states that ‘‘where rates have 

not yet been determined, payment 

under the not-yet determined rates are 

not ‘due’ ’’ and ‘‘[payment] only 

become[s] ‘due’ when [the rates] are 

determined.’’ 71 The DLC believes that it 

would be illogical and inconsistent for 

DMPs’ ‘‘true-up’’ payments made after 

the Phonorecords III Remand 

determination to be considered 

‘‘late.’’ 72

The Office concurs that no late fees 

are owed in connection with any 

Phonorecords III Remand adjustments. 

Under section 115(c)(1)(C), for digital 

phonorecord deliveries (including uses 

under the blanket license), ‘‘the royalty 

payable shall be the royalty prescribed 

under subparagraphs (D) through (F), 

paragraph (2)(A), and chapter 8.’’ 73

Therefore, what constitutes ‘‘all 

royalties’’ 74 that are ‘‘due’’ for any given 

monthly reporting period 75 are the 

royalties ‘‘prescribed’’ under the rates 

and terms that are in effect at that 

time.76 By definition, the newer rates 

and terms, despite having retroactive 

effect, were not ‘‘the royalty prescribed’’ 

at the time the previous payment was 

due, and therefore did not constitute 

‘‘the royalty payable’’ at that time.77

Previously timely payments cannot 

subsequently be rendered late because 

of a retroactive change in the rates and 

terms adopted by the CRJs. 

C. The CRJs’ Authority To Set Late Fees 

As noted above, the Copyright Office 

concludes that the MMA’s provisions 

are not ambiguous or silent on the issue 

of when royalty payments are due; 

therefore our inquiry ends here. To the 

extent that interested parties have 

competing policy concerns about when 

or how late fees should be incurred, 

such concerns must be addressed either 

to Congress or the CRJs, as Congress 

delegated authority over the substance 

of late fees to the CRJs and not the 

Office. 

While we offer no views regarding 

what late fee regulations should be 

adopted by the CRJs, if any, the Office 

does take the position that the CRJs have 

broad and flexible authority under 

section 803(c)(7) to adopt late fee terms, 

including by adopting differentiated or 

variable late fees (e.g., where the 

amounts can change over time), if the 

CRJs see fit to do so and such 

regulations are otherwise consistent 

with title 17 and based on an 

appropriate record. Nothing in title 17 

suggests that the CRJs cannot adopt 

different late fees (whether with respect 

to their amount(s) or how they operate) 

based on competing policy concerns. 

Dated: August 23, 2023. 

Suzanne V. Wilson, 

General Counsel and Associate Register of 

Copyrights. 

[FR Doc. 2023–18609 Filed 9–1–23; 8:45 am] 

BILLING CODE 1410–30–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R01–OAR–2023–0189; FRL–10876– 

02–R1] 

Air Plan Approval; Connecticut; New 

Source Review Permit Program State 

Plan Revision 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is approving revisions to 

the Connecticut State Implementation 

Plan (leSIP) concerning ruits New 

Source Review (NSR) permit program. 

The Connecticut Department of Energy 

and Environmental Protection (CT 

DEEP) submitted these revisions on 

December 15, 2020, as well as a 

supplemental letter on February 14, 

2023. The revised SIP incorporates 

various updates to CT DEEP’s NSR 

procedural requirements, substantive 

review criteria, provisions related to the 

control of volatile organic compounds 

(VOCs), and clarifying revisions to 

existing SIP-approved regulations. EPA 

is also fully approving the state’s 

infrastructure SIP for the 2015 National 

Ambient Air Quality Standards 

(NAAQS) ozone standard, which was 

previously conditionally approved. 

DATES: This rule is effective on October 

5, 2023. 

ADDRESSES: EPA has established a 

docket for this action under Docket 

Identification No. EPA–R01–OAR– 

2023–0189. All documents in the docket 

are listed on the https://

www.regulations.gov website. Although 

listed in the index, some information is 

not publicly available, i.e., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

is not placed on the internet and will be 

publicly available only in hard copy 

form. Publicly available docket 

materials are available at https://

www.regulations.gov or at the U.S. 

Environmental Protection Agency, EPA 

Region 1 Regional Office, Air and 

Radiation Division, 5 Post Office 

Square—Suite 100, Boston, MA. EPA 

requests that if at all possible, you 

contact the contact listed in the FOR

FURTHER INFORMATION CONTACT section to 

schedule your inspection. The Regional 

Office’s official hours of business are 

Monday through Friday, 8:30 a.m. to 

4:30 p.m., excluding legal holidays and 

facility closures due to COVID–19. 

FOR FURTHER INFORMATION CONTACT: 

Jessica Kilpatrick, Air Permits, Toxics, 


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