Intellectual Property Bill [HL]

Lord Foulkes of Cumnock Excerpts

Tuesday 23rd July 2013 Lords Chamber

[Lord Clement-Jones]

My Lords, this is a rerun of an amendment I tabled in Grand Committee. On 18 June in Committee, the Minister said in response to this particular amendment:

“Given the interrelation between Section 73 and many other rules and regulations, it is key that this is looked at in the context of the wider framework”.

He said that the DCMS was essentially leading the work on this and that the department,

“will set out the next steps on this issue when it publishes its approach to digital connectivity, content and consumers, which is planned for publication before the end of July”.

I hope that the Minister can give us some news on that hot off the press but I am not totally optimistic. He also said:

“It is right and proper that any proposal will be consulted on with the relevant stakeholders and interested parties. This proposed amendment to the CDPA would pre-empt the Government’s approach to this area”.—[Official Report, 18/6/13; col. GC 94.]

I set out, fairly comprehensively, the reasons why it was not right to retain Section 73 of the CDPA, largely because of the outcome of the case involving an app that is retransmitting ITV and other commercial—

[Lord Foulkes of Cumnock]

I wonder whether the noble Lord will give way. He has spoken eloquently and diligently in Committee and now on Report on this matter, as he did on the previous amendment. I wonder whether he could give the House and me some reassurance as to whether there is any link between any of these subjects and the interest that he has declared in the register.

[Lord Clement-Jones]

My Lords, there is no connection at all. I am very surprised, quite honestly, that the noble Lord is asking that question, since I have spoken on this issue both in Committee and today.

[Lord Foulkes of Cumnock]

So none of the clients of DLA Piper UK have interests in any of these matters—is that correct?

[Lord Clement-Jones]

My Lords, none of those clients of DLA Piper are personal clients and therefore I have no obligation either to include them in the register or to declare them when I stand up in the House. I am sure that when the noble Lord reads the Code of Conduct, he will be absolutely clear on that point.

--- Later in debate ---

[Lord Foulkes of Cumnock]

I was not raising it as a question of obligation or, indeed, challenging what he has properly declared in the register. All I was seeking to ascertain was whether any of the many clients of DLA Piper—personal or otherwise—have interests in these matters. I wonder whether he could clarify that.

[Lord Clement-Jones]

My Lords, DLA Piper has something like 80,000 clients. I am sure that some of them have interests in virtually everything that passes through this House on a daily basis. However, that does not require a partner in a law firm, like me, to make a declaration or, indeed, to state who their clients are. Otherwise, I would take up even more of the House’s time than I already am. Perhaps I could continue.

The current regulatory regime governing the relationship between PSB channels and TV platforms rests on three assumptions: that some of the analogue terrestrial value enjoyed by the PSBs should be used to encourage platform competition in the UK; that platforms effectively offer audiences to commercial PSBs to sell to advertisers; and that platforms do not inhibit the ability of commercial PSBs to exploit content, originally delivered free to air, in secondary markets.

The first assumption no longer holds—there is no analogue spectrum and there is a highly successful and well resourced pay-TV platform in the UK. Increasingly, however, the second and third assumptions are also in jeopardy, in particular as a result of the rise of subscription-based, high-capacity personal video recorders. PVRs are now in the vast majority of Sky and Virgin households and are key to both platforms’ proposition to consumers. PVRs are rented or sold by the main pay-TV platforms to their subscribers as added-value services and enable pay-TV platform customers to record and keep copies of very significant amounts of commercial PSB content. They also allow viewers to skip the advertising in such content, as they are doing in increasing volumes, particularly in genres such as drama.

For example, the Sky+HD 2TB box is now capable of recording the entire ITV peak-time schedule for 11 months of the year, and storage space is expanding exponentially. The concern is not about PVRs per se—they are a great enhancement to consumer choice—but rather the fact that the regulatory regime now allows platform operators to extract further value from PSB content, which is supplied either for free or, worse still, following payment to the platform operator in the first place. The PSBs are not able to capture any of this value by renegotiating the original terms of supply to the platform, as a result of the following components of the current regulatory regime: Section 73, which this amendment attempts to deal with; the Ofcom-regulated technical platform services regime, under which PSBs have to provide content for free and have to pay several million pounds to a platform operator for the technical platform services that enable viewers to receive the PSB channels; and thirdly, the time-shifting exception to copyright that allows customers to record and keep TV content. Around 10% of all viewing is now time-shifted, which is nearly five times greater than the highest level of time-shifting in the VCR era. PSB content is the most time-shifted—drama in particular, where levels of time-shifting and advertising-skipping are far higher.