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The proposed Music Online Competition Act is a bill the U.S. Congress will consider in the future. Sponsored by Rep. Rick Boucher (D, Va.) and Chris Cannon (R, Ut.), the bill would affect songwriters and their interests. Its ostensible purpose is to facilitate the online distribution of music, increase online competition, and prevent currently entrenched music business interests from monopolizing the digital world. This article highlights some of the bill’s important provisions. Although much of the MOCA deals with sound recording copyrights, to the extent that changes to the rules governing those rights affect owners of song compositions, they are relevant to writers and publishers.

1. Nondiscriminatory Licensing. MOCA states that if a record company licenses to broadcast or distribute internet music interactively, the company must make the sound recordings available on no less favorable terms to other entities that offer similar services. Some have called this a “quasi-compulsory license”, i.e. it doesn’t force the copyright owner to license, but states that if the owner chooses to license to one, it must offer the same terms to all.

2. Ephemeral Recordings. Present copyright law allows a webcaster to make and retain a single ephemeral copy of a sound recording necessary to facilitate transmission, provided certain conditions are met. This is problematic for webcasters because they need to make multiple ephemeral copies to accommodate various codecs and bitrates. MOCA covers this situation by allowing for the creation of multiple copies to facilitate the transmission of a performance, and also allows webcasters to store copies on geographically diverse servers. Importantly, these provisions are only available to those who currently hold statutory licenses.

3. Online Performance Exemption. Copyright law allows “brick & mortar” retail stores to play songs to promote record sales without paying performance license fees. MOCA extends that performance right exemption online. Effectively, it codifies what has evolved as industry practice, limiting the amount of time of the clip to 30 or 60 seconds, depending on various factors.

4. License Streamlining. MOCA provides that a person who wants to obtain a compulsory mechanical license to file an application directly with the U.S. Copyright Office and deposit the royalty fee there, instead of serving notice on the copyright owner. It also instructs the C.O. to establish an electronic notification method. MOCA extends the application of the compulsory to “limited digital phonographic deliveries”, i.e. “time-outs”, etc.

5. Incidental and Archive Copying. Incidental, or “buffer” copies are those made by a user’s computer in RAM when listening to a stream or initiating a download. MOCA characterizes them as having no real economic value, and therefore exempts them from an owner’s exclusive rights. It also legalizes the creation of archival or backup copies of music purchased over the internet.

6. Direct Artist Compensation. MOCA mandates that the sound recording performance royalties labels must share with artists be paid directly to the recording artists. In other words, the artist’s digital public performance royalties would be treated similarly to a writer’s PRO monies—paid directly and non-recoupable.

It remains to be seen whether this bill will receive any significant attention in the near future, and whether its provisions will undergo major changes in the process. Initial label reaction to the bill has not been positive, with the primary claim that it is unwise for the government to intervene in a nascent market. Look for future updates on this and other proposed legislation in future columns.