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> (does it count as commercial when they are not charging users for the video, but are monetizing the site with advertising?

Yes.

The license[1] mentions both 'free television' and 'renumeration from other sources'

[1] http://www.mpegla.com/main/programs/avc/Documents/AVC_TermsS...

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They specifically grant a perpetual royalty-free license for internet broadcast where the end user doesn't pay a subscription or per-video fee, though:

In the case of Internet Broadcast AVC Video (AVC Video that is delivered via the Worldwide Internet to an End User for which the End User does not pay remuneration for the right to receive or view, i.e., neither Title-by-Title nor Subscription), there will be no royalty for the life of the License.

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