Chris Castle looks at the hype around Copyright Royalty Board Reform

Government, like most institutions, likes to “reform” (aka fix) things. Chris Castle looks at what the current hype and unintended consequences if the buzz about reforming the Copyright Royalty Board becomes a reality.

Op-Ed by CHRIS CASTLE of Music Tech Policy

“CRB reform” (whatever that means) is all the rage. “[FILL IN THE BLANK] reform” usually means “change the status quo to give me more” or “I screwed up but if I can get you to believe it wasn’t my incompetence but an insurmountable obstacle, then you won’t notice I still got my undeserved bonus.”

One of the asides in the IP Subcommittee hearing yesterday was some loose talk about CRB reform to give the Copyright Royalty Board “more resources”. Turning the Copyright Royalty Board into a financial printer with groaning craft services tables, massages and nap rooms for a…ahem…quick nap is not going to change a thing about outcomes.

There is also loose talk about paying the Judges more so that the position would have higher prestige in the Imperial City allowing greater job opportunities after leaving government service–which is the point, after all, dear readers. But here’s the thing about that–the Judges are administrative law judges, not Article III judges, and it is unlikely that the position will ever be moved to the Judicial Branch. So what are the implications of that for the CRJs or those who would pay them higher salaries?

First, compensation for the CRJs is baked into the Copyright Act (17 USC §802(e)(1):

The Chief Copyright Royalty Judge shall receive compensation at the rate of basic pay payable for level AL–1 for administrative law judges pursuant to section 5372(b) of title 5, and each of the other two Copyright Royalty Judges shall receive compensation at the rate of basic pay payable for level AL–2 for administrative law judges pursuant to such section. The compensation of the Copyright Royalty Judges shall not be subject to any regulations adopted by the Office of Personnel Management pursuant to its authority under section 5376(b)(1) of title 5.

So the “more money for the Judges” idea has to fit into both the Library of Congress budget and also the federal Executive Schedule established by the Office of Personnel Management for administrative law judges.  There are three levels for administrative law judges (AL-1, AL-2, AL-3 with subcategories for AL-3).  The Copyright Act specifies that the Chief Copyright Royalty Judge is paid at AL-1 and the other two judges are paid at AL-2.  AL-1 and AL-2 for Washington, DC are both $187,300 based on research (https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2022/ALJ_LOC.pdf).

Looking forward to hearing from the smart people how this is going to work since it will require opening up the Copyright Act and all the other ALJs in the federal government may have something to say. So that idea doesn’t seem like it’s going to make a difference.

Neither will a nicer (or any) courtroom or more staff. Why? Because the problems are not in the physical, food or headcount. The problem is that there is no cap on the legal fees and dozens of the highest paid lawyers in the world are playing smashmouth on the songwriters dime regardless of the transaction costs (like millions in legal fees). Because make no mistake, when the transaction costs go up, the payments to songwriters go down particularly when the combined billing rate is in the vicinity of $100,000 an hour. There is no free lunch. They have to be able to tell you that all those costs resulted in some benefit, but imagine if those legal fees got paid to songwriters. And then there’s the commissions.

But all of this happy talk in the mumbletank is designed for one thing–making the bubble bigger that protects the Imperial City. There’s a reason why the five richest counties in the US border Washington DC.

Rather than making the bubble bigger, make the table longer. Another way to make the CRB process more efficient is for there to be less of it because more was decided through voluntary agreements among more people. 

Take the frozen mechanicals success as an example. The insiders got in their bubble and cooked up a settlement which was resoundingly rejected by the Judges. Everyone went to their corner and came up with a solution–the longer table. That solution was accepted by the Judges and the entire issue was resolved in record time. If it had just started with more people talking to each other it would have been even quicker. Mind you, I have no illusions that dealing with the labels is by far easier than dealing with the DSPs. But there’s a lesson there for everyone.

The true CRB reform is having a longer table with more people at it–but with everyone listening to each other. That doesn’t require a change in the law, that requires a change in the mindset. Much cheaper and no lobbyists allowed.