13 The online transmission right should be subject to a statutory license and administered by a single rights collective on behalf of all rights holders of musical works and sound recordings.

14 Rights holders and service operators must cooperate in the development and deployment of a uniform rights management system for monitoring which works were transmitted and by whom. To this end, rights holders would identify the works in which they claim protection. They would also provide a technological means for marking individual works and tracking them when transmitted online. For their part, service operators wishing to qualify for the statutory license must ensure that they only transmit properly marked works and that they keep track of the works they transmit .

15 The statutory license fee for each service would be based on its revenue or its operating expenses, whichever is greater. Adjustments could be made to the fee to reflect differences among services in the prominence of their use of music as well as in the relative proportion of copyrighted and public domain works they transmit. Within this framework, the statutory license fee rate could be set by voluntary negotiations between the rights collective and service operator representatives. Failing voluntary agreement, the rate would be established by government-supervised arbitration following an evidentiary hearing.

16 In addition, a flat monthly license fee would be charged for members of peer-to-peer file sharing networks and similar online communities wishing to avail themselves of the statutory license.

17 Royalty distribution would be based on a full census of licensed transmissions. In this way, royalty payments would correspond precisely with online transmissions and they would be made only to those rights holders whose works were actually transmitted by licensed services. Disputes regarding royalty distribution could be settled either by voluntary agreement or by arbitration.

18 An online transmission right, collectively administered, and subject to a statutory license, is the best model for the administration of online rights in music and sound recordings. By these means, the ongoing public policy deadlock over the online use and protection of music could be broken and an online marketplace for music could flourish.... A very serious fleshing out of these themes follow. Two questions emerge immediately: why does he address music files only? How does he engorce the licensing requirement on decentralized P2P networks? (thanks to Kevin Marks)