Fees for Late Royalty Payments under the Music Modernization Act’s Blanket Mechanical License

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The Copyright Office has issued an interpretive rule addressing when fees for late royalty payments should be assessed in connection with reporting by digital music providers under the Music Modernization Act’s blanket mechanical license. This interpretive rule terminates a notification of inquiry addressing this issue published in February 2023.

Having carefully considered the statutory text, legislative history, and public comments, the Office concludes that the statute’s due date provisions are unambiguous. The statute’s reference to “due date for payment” clearly refers to the date on which monthly royalty payments are required to be delivered to the MLC, i.e., no later than forty-five days after the end of the monthly reporting period.

Further, the Office agrees with commenters that late fees do not apply to adjustments resulting from the change in rates and terms following the Copyright Royalty Judges’ Phonorecords III Remand determination.