begin reporting usage and paying 
royalties for such musical work 
(or share thereof) for such re-
porting period and reporting pe-
riods thereafter to the mechanical 
licensing collective, as required 
under this subsection and appli-
cable regulations. 
‘‘(III) If a copyright owner of an 
unmatched work (or share thereof) is 
not identified and located by the li-
cense availability date, the digital 
music provider shall— 
‘‘(aa) within 45 days after 
the 
license 
availability 
date, 
transfer all accrued royalties to 
the mechanical licensing collec-
tive, such payment to be accom-
panied 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 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00088
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
owner from initial use of the 
work in accordance with this sec-
tion and applicable regulations, 
including the requisite certifi-
cation under subsection (c)(5), 
and accompanied by an addi-
tional certification by a duly au-
thorized officer of the digital 
music provider that the digital 
music provider has fulfilled the 
requirements of clauses (i) and 
(ii) of subparagraph (B) but has 
not been successful in locating or 
identifying the copyright owner; 
and 
‘‘(bb) as of the monthly roy-
alty reporting period commencing 
on the license availability date, 
begin reporting usage and paying 
royalties for such musical work 
(or share thereof) for such period 
and reporting periods thereafter 
to the mechanical licensing collec-
tive, as required under this sub-
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00089
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
section and applicable regula-
tions. 
‘‘(v) SUSPENSION OF LATE FEES.—A 
digital music provider that complies with 
the requirements of this paragraph with 
respect to unmatched musical works (or 
shares of works) shall not be liable for or 
accrue late fees for late payments of royal-
ties 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 collec-
tive, as applicable. 
‘‘(C) ADJUSTED
STATUTE
OF
LIMITA-
TIONS.—Notwithstanding anything to the con-
trary in section 507(b), with respect to any 
claim of infringement of the exclusive rights 
provided by paragraphs (1) and (3) of section 
106 against a digital music provider arising 
from the unauthorized reproduction or distribu-
tion of a musical work by such digital music 
provider to engage in covered activities that ac-
crued no more than 3 years prior to the license 
availability date, such action may be com-
menced within 3 years of the date the claim ac-
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00090
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
crued, or up to 2 years after the license avail-
ability date, whichever is later. 
‘‘(D) OTHER RIGHTS AND REMEDIES PRE-
SERVED.—Except as expressly provided in this 
paragraph, nothing in this paragraph shall be 
construed to alter, limit, or negate any right or 
remedy of a copyright owner with respect to un-
authorized use of a musical work. 
‘‘(11) LEGAL PROTECTIONS FOR LICENSING AC-
TIVITIES.— 
‘‘(A) EXEMPTION
FOR
COMPULSORY
LI-
CENSE
ACTIVITIES.—The antitrust exemption 
set forth in subsection (c)(3)(B) shall apply to 
negotiations and agreements between and 
among copyright owners and persons entitled to 
obtain a compulsory license for covered activi-
ties under this subsection, and common agents 
acting on their behalf, including with respect to 
the administrative assessment established under 
this subsection. 
‘‘(B) LIMITATION ON COMMON AGENT EX-
EMPTION.—Notwithstanding the antitrust ex-
emption provided in subsection (c)(3)(B) and 
subparagraph (A), except for the administrative 
assessment, neither the mechanical licensing 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00091
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
collective nor the digital licensee coordinator 
shall serve as a common agent with respect to 
the establishment of royalty rates or terms 
under this section. 
‘‘(C) ANTITRUST EXEMPTION FOR ADMIN-
ISTRATIVE
ACTIVITIES.—Notwithstanding any 
provision of the antitrust laws, copyright own-
ers and persons entitled to obtain a compulsory 
license under this section may designate the 
mechanical licensing collective to administer vol-
untary licenses for the reproduction or distribu-
tion of musical works in covered activities on 
their behalf; provided, however, that— 
‘‘(i) each copyright owner shall estab-
lish the royalty rates and material license 
terms of any such voluntary license indi-
vidually and not in agreement, combina-
tion, or concert with any other copyright 
owner; 
‘‘(ii) each person entitled to obtain a 
compulsory license under this section shall 
establish the royalty rates and material li-
cense terms of any such voluntary license 
individually and not in agreement, com-
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00092
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
bination, or concert with any other digital 
music provider; and 
‘‘(iii) the mechanical licensing collec-
tive shall maintain the confidentiality of 
the voluntary licenses in accordance with 
the confidentiality provisions prescribed by 
the Register of Copyrights under sub-
section (d)(12)(C). 
‘‘(D) LIABILITY FOR GOOD-FAITH ACTIVI-
TIES.—The mechanical licensing collective shall 
not be liable to any person or entity based on 
a claim arising from its good-faith administra-
tion of policies and procedures adopted and im-
plemented to carry out the responsibilities set 
forth in subparagraphs (J) and (K) of para-
graph (3), except to the extent of correcting an 
underpayment or overpayment of royalties as 
provided in paragraph (3)(L)(i)(VI); provided, 
however, 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 action. For purposes of this subparagraph, 
‘good-faith administration’ means administra-
tion in a manner that is not grossly negligent. 
VerDate Sep 11 2014 
20:32 Jan 03, 2018
Jkt 079200
PO 00000
Frm 00093
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
‘‘(E) PREEMPTION
OF
STATE
PROPERTY 
LAWS.—The holding and distribution of funds 
by the mechanical licensing collective in accord-
ance with this subsection shall supersede and 
preempt any State law (including common law) 
concerning escheatment or abandoned property, 
or any analogous provision, that might other-
wise apply. 
‘‘(12) REGULATIONS.— 
‘‘(A) ADOPTION
BY
REGISTER
OF
COPY-
RIGHTS 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 subsection, except for regula-
tions concerning proceedings before the Copy-
right Royalty Judges to establish the adminis-
trative assessment, which shall be adopted by 
the Copyright Royalty Judges. 
‘‘(B) JUDICIAL
REVIEW
OF
REGULA-
TIONS.—Except as provided in paragraph 
(7)(D)(vii), regulations adopted under this sub-
section shall be subject to judicial review pursu-
ant to chapter 7 of title 5. 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00094
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
‘‘(C) PROTECTION OF CONFIDENTIAL IN-
FORMATION.—The Register of Copyrights shall 
adopt regulations to provide for the appropriate 
procedures to ensure that confidential, private, 
proprietary, or privileged information contained 
in the records of the mechanical licensing collec-
tive and digital license coordinator is not im-
properly disclosed or used, including through 
any disclosure or use by the board of directors 
or personnel of either entity, and specifically in-
cluding the unclaimed royalties oversight com-
mittee and the dispute resolution committee of 
the mechanical licensing collective. 
‘‘(13) SAVINGS CLAUSES.— 
‘‘(A) LIMITATION
ON
ACTIVITIES
AND 
RIGHTS
COVERED.—This subsection applies 
solely to uses of musical works subject to licens-
ing under this section. The blanket compulsory 
license established hereunder shall not be con-
strued to extend or apply to activities other 
than covered activities or to rights other than 
the exclusive rights of reproduction and dis-
tribution licensed under this section, or serve or 
act as the basis to extend or expand the com-
pulsory license under this section to activities 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00095
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
and rights not covered by this section as of the 
enactment date. 
‘‘(B) RIGHTS
OF
PUBLIC
PERFORMANCE 
NOT AFFECTED.—The rights, protections, and 
immunities granted under this subsection, the 
data concerning musical works collected and 
made available under this subsection, and the 
definitions set forth in subsection (e) shall not 
extend to, limit, or otherwise affect any right of 
public performance in a musical work.’’; and 
(5) by adding at the end the following new sub-
section: 
‘‘(e) DEFINITIONS.—As used in this section: 
‘‘(1) ACCRUED INTEREST.—The term ‘accrued 
interest’ means interest accrued on accrued royal-
ties, as described in subsection (d)(3)(I)(ii). 
‘‘(2) ACCRUED ROYALTIES.—The term ‘accrued 
royalties’ means royalties accrued for the reproduc-
tion or distribution of a musical work (or share 
thereof) in a covered activity, calculated in accord-
ance with the applicable rate under this section. 
‘‘(3) ADMINISTRATIVE ASSESSMENT.—The term 
‘administrative assessment’ means the fee to be paid 
by digital music providers and significant nonblanket 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00096
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
licensees that is established pursuant to subsection 
(d)(7)(D). 
‘‘(4) BLANKET LICENSE.—The term ‘blanket li-
cense’ means a compulsory license to engage in cov-
ered activities as described in subsection (d)(1). 
‘‘(5) BUDGET.—The term ‘budget’ means a 
statement of the financial position of the mechanical 
licensing collective for a fiscal year or quarter there-
of based on estimates of expenditures during the pe-
riod and proposals for financing them, including a 
calculation of total costs. 
‘‘(6) COPYRIGHT OWNER.—The term ‘copyright 
owner’— 
‘‘(A) means the owner of the exclusive 
right of reproduction or distribution in a musi-
cal work, in all or in part, as provided in sec-
tion 201 of this title; and 
‘‘(B) does not refer to ownership of any 
other right. 
‘‘(7) COVERED ACTIVITY.—The term ‘covered 
activity’ means the activity of making a digital pho-
norecord delivery of a musical work, including in the 
form of a permanent download, limited download, or 
interactive stream, where such activity is subject to 
compulsory licensing under this section. 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00097
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
‘‘(8) DIGITAL
MUSIC
PROVIDER.—The term 
‘digital music provider’ means a person (or persons 
operating under the authority of that person) that, 
with respect to a service engaged in covered activi-
ties licensed under this subsection— 
‘‘(A) has a direct contractual, subscription, 
or other economic relationship with end users of 
the service, or, if no such relationship with end 
users exists, exercises direct control over the 
provision of the service to end users; 
‘‘(B) is able to fully report on any revenues 
and consideration generated by the service; and 
‘‘(C) is able to fully report on usage of 
sound recordings of musical works by the serv-
ice (or procure such reporting). 
‘‘(9) DIGITAL
LICENSEE
COORDINATOR.—The 
term ‘digital licensee coordinator’ means the entity 
described in subsection (d)(5). 
‘‘(10) DIGITAL PHONORECORD DELIVERY.—The 
term ‘digital phonorecord delivery’ means each indi-
vidual delivery of a phonorecord by digital trans-
mission of a sound recording that results in a spe-
cifically identifiable reproduction by or for any 
transmission recipient of a phonorecord of that 
sound recording, regardless of whether the digital 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00098
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
transmission is also a public performance of the 
sound recording or any musical work embodied 
therein, and includes a permanent download, a lim-
ited download, or an interactive stream. A digital 
phonorecord delivery does not result from a real- 
time, 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 audible. A digital pho-
norecord delivery does not include the digital trans-
mission of sounds accompanying a motion picture or 
other audiovisual work as defined in section 101 of 
this title. 
‘‘(11) ENACTMENT
DATE.—The term ‘enact-
ment date’ means the date of enactment of the 
Music Modernization Act of 2017. 
‘‘(12) INDIVIDUAL DOWNLOAD LICENSE.—The 
term ‘individual download license’ means a license 
obtained by a record company under subsection 
(b)(3) to make and distribute, or authorize the mak-
ing and distribution of, permanent downloads em-
bodying a specific musical work (or share of a work). 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00099
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
100 
‘‘(13) INTERACTIVE STREAM.—The term ‘inter-
active stream’ means a digital transmission of a 
sound recording of a musical work in the form of a 
stream, where the performance of the sound record-
ing by means of such transmission is not exempt 
under section 114(d)(1) and does not in itself, or as 
a result of a program in which it is included, qualify 
for statutory licensing under section 114(d)(2). An 
interactive stream is a digital phonorecord delivery. 
‘‘(14) INTERESTED.—The term ‘interested’, as 
applied to a party seeking to participate in a pro-
ceeding under subsection (d)(7)(D), is a party as to 
which the Copyright Royalty Judges have not deter-
mined that the party lacks a significant interest in 
such proceeding. 
‘‘(15) LICENSE AVAILABILITY DATE.—The term 
‘license availability date’ means January 1 following 
the second anniversary of the enactment of the 
Music Modernization Act of 2017. 
‘‘(16) LIMITED DOWNLOAD.—The term ‘limited 
download’ means a digital transmission of a sound 
recording of a musical work in the form of a 
download, where such sound recording is accessible 
for listening only for a limited amount of time or 
specified number of times. 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00100
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
101 
‘‘(17) MATCHED.—The term ‘matched’, as ap-
plied to a musical work (or share thereof), means 
that the copyright owner of such work (or share 
thereof) has been identified and located. 
‘‘(18) MECHANICAL LICENSING COLLECTIVE.— 
The term ‘mechanical licensing collective’ means the 
entity described in subsection (d)(3)(A). 
‘‘(19) MUSICAL WORKS DATABASE.—The term 
‘musical works database’ means the database de-
scribed in subsection (d)(3)(E). 
‘‘(20) NOTICE OF LICENSE.—The term ‘notice 
of license’ means a notice from a digital music pro-
vider provided under subsection (d)(2)(A) for pur-
poses of obtaining a blanket license to engage in cov-
ered activities under subsection (d). 
‘‘(21) NOTICE
OF
NONBLANKET
ACTIVITY.— 
The term ‘notice of nonblanket activity’ means a no-
tice from a significant nonblanket licensee provided 
under subsection (d)(6)(A) for purposes of notifying 
the mechanical licensing collective that it has been 
engaging in covered activities. 
‘‘(22) PERMANENT
DOWNLOAD.—The term 
‘permanent download’ means a digital transmission 
of a sound recording of a musical work in the form 
of a download, where such sound recording is acces-
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00101
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
102 
sible for listening without restriction as to the 
amount of time or number of times it may be 
accessed. 
‘‘(23) QUALIFIED AUDITOR.—The term ‘quali-
fied auditor’ means an independent, certified public 
accountant with experience performing music royalty 
audits. 
‘‘(24) RECORD
COMPANY.—The term ‘record 
company’ means an entity that invests in, produces, 
and markets sound recordings of musical works, and 
distributes such sound recordings for remuneration 
through multiple sales channels. 
‘‘(25) 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 (d)(4)(A). 
‘‘(26) REQUIRED
MATCHING
EFFORTS.—The 
term ‘required matching efforts’ means efforts to 
identify and locate copyright owners of musical 
works as described in subsection (d)(10)(B)(i). 
‘‘(27) SERVICE.—The term ‘service’, as used in 
relation to covered activities, means any site or other 
facility through which sound recordings of musical 
works are made available by digital transmission to 
members of the public. 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00102
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
103 
‘‘(28) SHARE.—The term ‘share’, as applied to 
a musical work, means a fractional ownership inter-
est in such work. 
‘‘(29) SIGNIFICANT NONBLANKET LICENSEE.— 
The term ‘significant nonblanket licensee’ means an 
entity, including a group of entities under common 
ownership or control that, acting under the authority 
of one or more voluntary or individual download li-
censes, offers a service engaged in covered activities, 
where such entity or group of entities— 
‘‘(A) 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 sub-
section (d)(4)(A); 
‘‘(B) has a direct contractual, subscription, 
or other economic relationship with end users of 
the service or, if no such relationship with end 
users exists, exercises direct control over the 
provision of the service to end users; and 
‘‘(C) either— 
‘‘(i) at any time in a calendar month, 
makes more than 5,000 different sound re-
cordings 
of 
musical 
works 
available 
through its service; or 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00103
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS
104 
‘‘(ii) derives revenue or other consid-
eration in connection with such covered ac-
tivities greater than 50,000 dollars in a 
calendar month, or total revenue or other 
consideration greater than 500,000 dollars 
during the preceding 12 calendar months. 
‘‘(30) SONGWRITER.—The term ‘songwriter’ 
means the author of all or part of a musical work, 
including a composer or lyricist. 
‘‘(31) TOTAL
COSTS.—The term ‘total costs’ 
means the total costs of establishing, maintaining, 
and operating the mechanical licensing collective to 
fulfill its statutory functions, including startup costs; 
financing, legal, and insurance costs; investments in 
information technology, infrastructure, and other 
long-term resources; outside vendor costs; costs of li-
censing, royalty administration, and enforcement of 
rights; costs of bad debt; and costs of automated 
and manual efforts to identify and locate copyright 
owners of musical works (and shares thereof) and 
match sound recordings to the musical works they 
embody; provided, however, that total costs shall not 
include any added costs incurred by the mechanical 
licensing collective to provide services under vol-
untary licenses. 
VerDate Sep 11 2014 
23:52 Dec 22, 2017
Jkt 079200
PO 00000
Frm 00104
Fmt 6652
Sfmt 6201
E:\BILLS\H4706.IH
H4706
lotter on DSKBCFDHB2PROD with BILLS