Lord Stevenson of Balmacara
Main Page: Lord Stevenson of Balmacara (Labour - Life peer)Intellectual Property Bill [HL]
Lord Stevenson of Balmacara Excerpts
Lord Stevenson of Balmacara
My Lords, this group of amendments all relate to the proposed reporting duty placed on the Secretary of State in Clause 20 in relation to the creative industries. We welcome this proposal but the amendments, taken collectively, do two things: they build on the proposals in the Bill and they offer some alternatives for the focus of the reports that are to be made to Parliament.
Your Lordships will recall that the seeds of this debate are to be found in the discussions held on the Enterprise and Regulatory Reform Bill last Session, in particular the amendments put down to the Bill in Committee by the noble Lords, Lord Jenkin of Roding and Lord Clement-Jones, and others, which led the Minister to convene various meetings and, after discussion, to agree to introduce this proposal. Discussions of this type always make for better legislation, do they not? However, rereading the debate reminds me that then, as now, our aspirations were for a rather more expansive report than is currently proposed.
Like the Government, our amendments start from the position that IP is a hugely important component of this country’s economy. As the letter sent to the Times last March signed by members of the Creative Coalition Campaign said:
“Copyright is the central intellectual property right that underpins the creative and knowledge economy. Films, music, games, books, could not get made in their present quantity and quality without a robust system of copyright. It provides the legal foundation for the ability of companies to license or sell works, and to invest and to innovate”.
As we heard during the discussion of the ERR Bill, IP is at the heart of our economic success in this sector. The creative industries support around 1.5 million jobs and create more than £36 billion annually to UK GVA, calculated by the DCMS creative industries group. As a result of our belief in the importance of the creative industries, we believe that the annual report should not be limited, as the Government propose, to a view from the IPO, interesting though that undoubtedly would be. Surely the effect of the annual report should be a much broader review of the state of the copyright industries in the United Kingdom. The test is whether such a report will provide sufficient material to provide a discussion of how we are doing as a nation. It is not sufficient merely to hear how the IPO is doing in relation to its role of balancing the interests of intellectual property holders with the wider interests that the public may have in the extensive benefit that can be received from the early dissemination of information, knowledge and material.
In our view, it will be necessary for the annual report to cover plans for changes to legislation relating to IP and copyright; details of the expected impact on job creation; progress in supporting innovation; the impact of policy on economic growth more generally in the United Kingdom; engagement with other related government departments; engagement with stakeholders and details of lobbyists who have been in contact with the IPO; information concerning consumer behaviour and habits regarding the use of and access to copyright-infringing material and the subsequent economic impact; information containing manipulation of the internet search market; the impact of voluntary and non-voluntary action in tackling copyright infringement; and information about cross-border co-operation between our own jurisdiction and jurisdictions in the European Union and elsewhere. That is a long list, but it makes the point that what is needed is not so much a single point of view from the IPO but a broader conspectus of the current and future situation in this vital sector of our economy.
A report along the lines we are suggesting in these amendments will be an important first step in making our copyright industries a central part of our economic focus and ensuring that Parliament becomes better informed and can debate properly our progress. As my noble friend Lord Howarth of Newport said on Report on the ERR Bill, welcoming the Minister’s commitment that an annual report should be published by the IPO:
“It may not reach the top of the bestseller lists, but it is right in principle that the public should have the opportunity to be informed about what the current issues are and what developments in policy are or may be”. —[Official Report, 6/3/13; col. 1597.]
I beg to move.
Lord Jenkin of Roding
My Lords, along with a number of other noble Lords, I have several amendments in this group to which I would like to speak.
The noble Lord, Lord Stevenson, has reminded the Committee that the origin of some of this was in the debates on the Enterprise and Regulatory Reform Bill. One of the things we debated at some length was how far the IPO had a role to protect and promote the interests of intellectual property owners. With respect to my noble friend, we had an answer that was half dusty and half satisfactory. The dusty point was that he was not going to accept that the IPO should have that role and that was why we proposed having a director-general.
I am intrigued to see that the noble Lord, Lord Stevenson, has tabled what looks like exactly the same amendment as my noble friend Lord Clement-Jones and I tabled on that Bill.
Lord Stevenson of Balmacara
If I may help the noble Lord, I asked his permission—this is an intellectual property Bill, after all—and I thought that he had granted it. If he has not, I must apologise because I wanted to have exactly that point raised as it is on the agenda later on. I thought that if he would not do it, I would.
Lord Jenkin of Roding
I am most grateful to the noble Lord for his e-mail. I did not interpret it as asking for my permission because no permission would be needed. I treated it as a matter of courtesy that he was letting me know that he had tabled a similar amendment.
At this point I should say that I am in some personal difficulty today. I am speaking on the Energy Bill later and I ought to try to get back to the Second Reading debate as swiftly as I can. I will do my best to listen when the noble Lord, Lord Stevenson, moves that amendment but I am sure that he will understand if I have to desert the Committee for the Chamber.
Returning to Amendment 25F—I have amendments in the same group—the encouraging point in my noble friend’s reply in the debates on the ERR Bill was that he described himself as the Minister with the duty to promote and encourage intellectual property. We have taken that to heart. So I say at once that we welcome the clauses in the Bill which now provide for the annual report because this seems to be a valuable addition to the armoury of measures which are necessary to encourage and promote intellectual property in all its forms.
The noble Lord, Lord Stevenson, was quite right to say that we think the report ought to go wider than the Government have so far envisaged. I attach a lot of importance to that. I am grateful to the noble Lords, Lord Stevenson and Lord Young of Norwood Green, who have added their names to our amendment. Perhaps I should have added mine to theirs but that would have meant that I would have to stay, which may be difficult in the circumstances.
The imposition of a duty to produce an annual report on the work of the IPO in that form is welcome. It reflects the words that were used by the IPO’s chief executive John Alty, when he gave evidence to the Committee in the other place,
“as ensuring the IP framework supported innovation and growth”.
These are now reflected in the words in the Bill. However, it does expose one of the difficulties we face and which was faced to some extent at the last sitting of the Committee. The IPO has always claimed that weakening copyright with more and more exceptions will generate economic growth. This attitude has fuelled the anxieties of those who depend on the protection of IP for their living.
Amendment 26, to which I am grateful that others have added their names, is intended to make it completely clear that the report has to show that it is,
“the creation and exploitation of intellectual property”,
that has contributed to growth and innovation. If it is not protected, if there are too many exceptions, the incentive for people to do the work that creates and generates IP is to that extent weakened. As the noble Lord has already said, if we are a country that has to live on its wits and depend on its inventions and innovation to keep ahead of the rest of the world—in some cases I fear that we need to be catching up with the rest of the world, but that is very much part of this Government’s whole approach to these matters—we must recognise the very important role that IP plays in all this. The issues were raised very dramatically at Second Reading by my noble friend Lord Clement-Jones; I will not repeat the words but they are at col. 858.
I will deal with the other two amendments rather more briefly. The clause says that the Secretary of State should lay the report before Parliament. I do not think that that is enough. The legislation should call for a Statement, including the findings of the report and the action the Government intend to take. It should not just be lost in the tangled undergrowth of the huge tide—sorry, I am mixing my metaphors—of written reports to Parliament, of which there appear to be an increasing number. This is sufficiently important that we should require a Statement by a Minister in the House, which can of course be subject to question and answer. It will be open then to individual Members to decide if they wish to take steps to have the report debated.
Amendment 28 seeks to demonstrate the link between the role in promoting innovation and economic growth and the protection and promotion of IP; otherwise, one may find that intellectual property and rights owners’ ability to protect and monetise their rights will be seriously weakened in what it appears will be presented in the guise of pursuing economic growth. The Government are consulting on how they define and measure the creative industries in such a way that digital and tech companies will be classified as creative industries. I look forward to my noble friend correcting me, but I am concerned that, taken together, these two things could mean that the relaxation of IP rights, particularly copyright, would actually benefit the creative industries, when in truth they would benefit US-based and, increasingly, China-based global tech companies to the detriment of the UK creatives. Therefore, this amendment is intended as a safeguard for UK creatives and to ensure that the IPO takes into account how its actions affect those who create and own intellectual property.
As I have said, Clause 20 is a very welcome step forward and I would not want anything I have said to detract from that. But, as the noble Lord, Lord Stevenson, said, it needs to make it more explicit that the objectives are dependent on safeguarding the rights of IP owners.
Lord Stevenson of Balmacara
My Lords, I thank all speakers in this shortish debate. It was of high quality and we covered a lot of ground. It was particularly good that the noble Lord, Lord Jenkin, was able to stay for it. My noble friend Lord Young quipped that in these modern times perhaps the noble Lord, Lord Jenkin, given his skills, might clone himself and appear in two places at once. I quipped back immediately that that would almost certainly be, if it is not already, a crime under the intellectual property Act. It probably will be shortly and he could go to prison for trying it. We decided that that was not worth pursuing. I am sorry about that.
The debate raised a lot of issues. I thank the Minister very much indeed for his response—it was one of the best that I have heard in this Committee or in many others. He covered the ground extremely well, picked up every point and answered most of our questions in a very satisfactory way. In terms of what we are doing—trying to probe and get a sense of where the report will be coming from—I think that we are well satisfied.
However, the point is that the legislation does not quite say what the Minister said in his response. In the Explanatory Notes are simply two lines on the report in paragraph 91, which states:
“The report will cover new legislation and policy developments, including those related to copyright licensing, as well as the services delivered by the IPO”.
Given that the Minister spoke for some 10 minutes about what the report also contained, I wonder whether there is a bit of a gap between the written word and what we have heard. It may be possible to come up with a better formulation in the Bill, and we may want to come back and work further on that on Report. However, we are not far apart on this and, clearly, if the report does cover all the issues that the Minister listed, we would be well satisfied with that, in so far as it goes.
However, underlying the response was the nagging doubt about authorship. Who holds the pen in this report? That is the question we have to look at. The Minister, several times, said that it was okay because the Secretary of State would respond, not the noble Lord himself—as the Minister responsible for IP—or even the chief executive of the IPO. Later on, he changed that and said that it was “a” Secretary of State. However, there is not only one Secretary of State in the Cabinet and the Government. There is another Secretary of State, who currently has responsibility for the DCMS—although, if the rumours are to be believed, not for much longer—and who of course speaks for creators, appears at meetings speaking on intellectual property and sometimes appears with the Minister when the Minister is in his guise as intellectual property tsar. It is fairly obvious from those who attend these meetings, and I have heard a number of reports of them, that a differential approach comes across. It is impossible for the Government to have a single voice on this when the responsibilities are split. One point that has come through, in all the presentations that we have had this afternoon, is that the Government are not currently speaking for the balance of the two aspects. There is a sense here of an uncompleted need to address this issue. We might well come back to it.
The second point is that, within our debate, we picked up on a theme that has emerged in all our Committee sessions and which may run through to the end of this Bill. There is a growing unease about the way the balance is struck between the needs and rights of creators against those of wider society and between the rights of creators and of those who wish to exploit that creativity. I do not think we have settled it. I do not think it is possible to settle it in this Bill or without a lot more thought. I simply log that as being something about which we all hoped more would maybe come out in the report. This is an issue that we will have to address—if not now, then very quickly—in order to make the best of the way in which any future Government deal with intellectual property as an important sector of our economy.
As my noble friend Lord Howarth said, the most difficult question is about what our approach will be in terms of the economic return that can be earned by inventors, such that it does not squeeze out the benefits that will flow to those who wish to use and exploit those inventions. Are we thinking about intellectual enclosures or about commons? That is a very good formulation for a very complex problem, which I know that my noble friend has been dealing with for some time.
A third point comes out of this short debate. I apologise for going on at length but it is important to get it on the record. We are now satisfied that the sort of report that the Minister talked about would document very well what has happened in the Intellectual Property Office work over the year. But will it be sufficient for us to be able to address the issues of what it should be doing in future years? In other words, we have a simple written report and Written Statement—as the noble Lord, Lord Jenkin, said—simply landing in Parliament. Without the opportunity to interrogate, question and come up with ideas about what further work it might stimulate, the job will not be complete. Might the Minister think again about the point raised in the amendment of the noble Lord, Lord Jenkin, and the need not just for a report but for a Statement that could be debated? I know it is true that we can, as ordinary Members of your Lordships’ House, ask for a debate, but that is not the same as having a proper timetabled slot to look forward to, where we can consult with those outside, bring forward thoughts and events, and discuss the issue properly.
Finally, the question about how intellectual property is dealt with is so firmly in our minds that we need to think hard as we go through the rest of the Bill how we can better secure the debates that will be necessary around the wider context for this. It is true, as the Minister said, that BIS has the lead on this matter. However, without the wider community of Ministers also being engaged in it, that will not be sufficient. These are very important points to consider.
Viscount Younger of Leckie
The noble Lord’s question about who holds the pen on this report shows that everything is in the definite or indefinite article. I clarify that the Secretary of State for Business, Innovation and Skills will have the duty to report. However, the report will cover any relevant cross-cutting issues or activities, including work with DCMS or regulators such as Ofcom. I hope that that clarifies that point.
Lord Stevenson of Balmacara
I thank the Minister for picking up that point. Does it clarify it? No, but with that I withdraw the amendment.
“Future of intellectual property
Subordinate legislation to implement the government’s policy statement entitled “Modernising Copyright” published in December 2012 will not be brought forward until the Secretary of State has published, and laid before both Houses of Parliament, a report setting out the government’s long term plans for the future of intellectual property in the United Kingdom.”
Lord Stevenson of Balmacara
My Lords, this amendment is designed to probe the Government’s intentions as regards the substantial baggage of copyright exceptions which stem from the Hargreaves report. We understand the deadline for written comments on the first batch of draft legislation is 17 July 2013, and that the IPO will be holding a series of open meetings in the week commencing 8 July 2013 to give opportunity for discussion. Although we welcome this, we have not had notification so far about the other batches or, indeed, any certainty on how many of these there will be.
Therefore, can the Minister say, first, that it is intended that the Government will make the draft legislation widely available so that the finer points of wording may be examined by parties with a broad range of expertise? If so, can he spell out the various stages remaining in this process for the information of the Committee?
Secondly, may I ask how the Government will manage the need to take a view of the impact of these regulations in the round? Will there be a debate or some other opportunity for both Houses of Parliament to get involved before the regulations are introduced? On the regulations so far published, we are already aware of some significant issues which are being raised across the industry. Can the Minister share with the Committee how the proposal to introduce an exception for private copying can be squared with the requirements of the EC copyright directive and its requirements for fair compensation for rights owners? In this context, is the Minister aware of concerns about the evidence base used for the Hargreaves review? For example, the Government justify the proposal not to provide a compensation system on the basis that the exception will cause minimal, if any, harm due to the minimal impact on sales expected to arise from the introduction of this permitted act and the opportunity that it provides for the value of private copying to be priced in at the point of sale.
The impact assessment accompanying the modernising copyright documents stated on page 15 that the research into private copying appears to confirm that pricing in is possible and is taking place. However, the research by Roberto Camerani et al, which informed the impact assessment, does not come to this conclusion and instead finds, in the case of music, that
“an assumption or view that online stores embed an additional cost into their product price for copying remains ambiguous”.
Moreover, the research concludes that, in the field of music, the researchers could not find any evidence in support of a widely held view that stores are including in their price a permission to copy. The assumption that the value of private copying is priced in at the point of sale is refuted by the research commissioned by the IPO itself, so how does the Minister justify the approach now being taken?
Draft Clause 28 in the CDPA refers to permitted private copies being made from a copy that is held by an individual on a permanent basis. This expression is not clear and is not currently recognised elsewhere as a means of distinguishing one copy in the lawful possession of an individual from another copy which might not meet the test of being a permanent copy. Can the Minister elucidate this? Will he clarify the concept of permanent copies, particularly when a sound recording or a film may include underlying works which have been licensed only on a limited basis for inclusion in a so-called permanent copy?
Draft Section 28B(4) of the CDPA appears to ignore how terms and conditions permitting access to copyright works increasingly relate to the application of technical protection measures. For example, programmes which can be viewed on BBC iPlayer may also be downloaded for viewing during an agreed period, not normally beyond 30 days. If customers can override the TPM contractual provisions, any terms which are intended to distinguish access to a catch-up TV service from a full video on-demand download service will be potentially ineffective. TPM measures have never been “strictly non-contractual”. Can the Minister explain how the government drafting takes this into account?
The current wording on “cloud” storage does not appear to prevent sharing from the storage. Can the Minister confirm that the draft regulations will be tightened to ensure that no one is permitted to permit anyone else to make copies of their “private” copies?
It is hard to see how the new quotation exception can apply to all copyright works, including photographs. Section 30 of the CDPA allows fair dealing of copyright works for criticism, review and news reporting but excludes photographs from the fair dealing provision. Can the Minister confirm that a similar carve-out will be introduced for photographs? The phrase “fair dealing for the purposes of quotation” does not clearly communicate in plain English the fact that uses which are normally licensed or otherwise exploited are not included. Can the Minister confirm that this can be looked at again?
The Minister will recall that when we discussed parody at length in Committee on the ERR Bill, the suggestion was made that parodists could rely on the concept of fair dealing, so that no further definition was required. This approach was strongly challenged in Committee, not least because parody is a very popular mode of entertainment in the UK and needs certainty. I accept that this is a tricky area but do not believe that the proposed new exception for parody will be sufficient if no definition or boundaries are set out in the regulations. It is also quite surprising, given the debate referred to, that no definition is being proposed to specify what would constitute “parody”, “caricature” or “pastiche”. Would the Minister not agree that it will be necessary at least to distinguish each of those from the others? To avoid further confusion in the application of any clearly defined exception linked to each of these expressions, rights owners are likely to argue that it should be made clear that when users rely upon the proposed exception, any parody, caricature or pastiche must not infringe the moral rights of the authors or performers. Can the Minister confirm that this matter might be looked at?
I apologise to the Minister for all the detailed questions, but I hope that they exemplify why more time needs to be allowed for these important changes. Unfortunately, I doubt very much whether single debates, even on a group of SIs, will be sufficient. I beg to move.
Lord Stevenson of Balmacara
My Lords, I thank all speakers for contributing to this, and to the Minister for his very full response. I was not expecting detailed rebuttal on any of the points I made on individual copyright exceptions. I look forward to the letter, which I am sure will be very interesting.
The Minister has actually covered all the ground very satisfactorily. We were not aware of the timetable for the second group of copyright exceptions. Six weeks takes us to the end of July, so I assume that that will be finished at roughly the time that the House rises. That would be good and gives us time to come back to that. I understand the point about the disabilities exception, which I do not think is contested at all but should benefit from the further discussions in the Morocco environment that the Minister talked about.
We recognise that this is a process for which there are precedents. The affirmative resolution process is what it is, but I recognise that the Minister has indicated in the past, and has repeated today, that he would be happy to respond to requests for additional debates. I think that would be the way forward and I am sure that we could have a discussion on that and then discuss it through the usual channels.
I am also particularly grateful for the news that there will be some new impact statements. We did not feel that the previous impact statements, which attracted criticism all round the House, including from the noble Lord, Lord Clement-Jones, were up to the mark on what they were trying to justify. Seeing some reworked figures with proper calculations being done will be a huge success.
I think that the amendment has achieved what we wanted: to probe a little further on this area and to draw out the need for more time and effort to be spent on these important and good proposals. I beg leave to withdraw the amendment.
Viscount Younger of Leckie
My Lords, I will set out why the Government have tabled minor and technical amendments to this clause. The Committee will be relieved to know that my speech will be brief on this occasion.
Clause 21 is intended to simplify the way in which the UK currently meets its international obligations to extend copyright protection to works from other countries and their citizens, delivering clearer information for users. This need arises from the fact that the UK is a signatory to a number of international copyright conventions and treaties. This obliges the UK to extend copyright protection to works and performances created by citizens of other member countries, or to works that originate in other member countries. These obligations are reciprocal: UK copyright holders benefit from the same protection in those countries.
However, it became clear after the Bill was introduced that the clause as drafted would not provide the Government with the flexibility to extend as much, or as little, of the Act as is appropriate. The policy behind Section 159 is for protection to apply only where it is offered in return. This very much depends on which international agreements those other countries have signed up to, and whether they have opted out of some elements. The purpose of the Government’s technical amendments to this clause, therefore, is to better define the powers to extend only parts of the provisions of the Act to citizens and works from other countries, and where the United Kingdom is obliged to do so.
Amendment 28K is consequential and removes text that has become redundant, because the Bill will automatically ensure protection in future for works from the Channel Islands and the Isle of Man. I beg to move.
Lord Stevenson of Balmacara
My Lords, I am sure that there will be little response to the Minister’s brief but adequate explanation of these amendments. He also tried to write to us to explain what he was doing, but unfortunately the letter did not reach us until this morning. However, I have had the benefit of a brief read of that. It seems to us a sensible amendment, and we wish it well.
Viscount Younger of Leckie
I am grateful for the brief contribution from the noble Lord, Lord Stevenson. I have nothing further to add.
Lord Clement-Jones
My Lords, I am afraid I have three amendments in a row. I do not know whether it will be “three strikes and you’re out”, but Amendment 30 is the second. I will first explain that Section 73 of the Copyright, Designs and Patents Act is a provision in UK copyright law that permits the immediate retransmission of the main PSB free-to-air services by “cable” in the area where the original PSB channel was broadcast. Crucially, Section 73 provides that the copyright in the broadcast, and in any work included in the broadcast, is not infringed by such retransmission. The effect of the section is to permit “cable” operators to retransmit PSB services without agreement or consent.
What was the original purpose of the provision? The policy justification for Section 73 in its current form was to encourage cable rollout in the 1980s and 1990s as a competing platform to terrestrial television. How have the courts interpreted the provision today? In the recent TVCatchup litigation in the UK and CJEU, TVCatchup, an online TV service provider, argued that its retransmission and commercial exploitation of the PSB services via the internet was lawful under Section 73 on the basis that “cable” ought to be given its natural meaning. The judge in the High Court litigation agreed, and stated:
“I see no reason why the cabling system inherent in the internet should not be regarded as ‘cable’ for the purposes of the Section 73 defence”.
This is not an interpretation that can ever have been intended by Parliament—nor, based on correspondence with the IPO, is it one that the Government believe is correct. In that correspondence in 2008-09 the IPO stated that,
“‘cable’ in section 73 as amended must mean the same thing as ‘cable’ in the Information Society Directive, the relevant requirements of which were implemented by the section 73 amendments in question. In the Information Society Directive ‘cable’ is not synonymous with ‘wire’ and is confined (as therefore, is section 73 CDPA) to the retransmission of broadcasts by conventional cable programme providers. The foregoing supports this Office’s view that the activities of IPTV providers such as ‘Zattoo’ who purport to rely on section 73, are in fact wholly outside the scope of that provision and that there are grounds for challenging them on that basis”.
The IPO also stated in the correspondence that the interpretation of Section 73 by the IPTV providers, and confirmed by the UK courts in the TVCatchup case,
“cannot have been Parliament’s intention”.
What are the problems with Section 73 now, in the light of that case? First, economic loss for PSBs and the UK creative economy. Section 73 is now being relied on by a series of service providers, most notably TVCatchup and FilmOn, to make money from PSB channels by retransmitting them via their own online services and placing advertising in and around the channels, which include BBC channels. Not only are the PSB services being exploited without agreement or payment to anyone, including contributors, but, perversely, Section 73 effectively permits these illegitimate online services to stream a small amount of content on the PSB channels, such as a number of old series for which online rights were not obtained and some sports coverage, that the PSB services themselves cannot stream online for rights reasons. This perverse consequence of Section 73 has attracted significant attention from underlying rights holders, including UK producers and foreign providers such as US studios, as well as from other industry bodies.
Services such as TVCatchup undermine the legitimate online streaming services and on-demand catch-up services provided by PSBs which, in the case of commercial PSBs, are a core part of ongoing efforts to make a financial return on the PSB investment in original UK content.
It is increasingly clear that TVCatchup in particular is operating at scale in the UK and has many millions of users. Indeed, it claims that it has close to 12 million registered users on its site. The key losses from this exploitation for the PSBs are loss of audience from legitimate PSB online streaming services, linear broadcast viewing and on-demand services, and, for the commercial PSBs, loss of advertising and sponsorship revenue from their own channels. By contrast with PSB exploitation of channels and content online, none of the TVCatchup revenue flows back into original UK content production or to underlying talent and rights holders. The scale and problem of this free riding is likely to increase substantially over the coming years as more and more households adopt connected TV—that is, IPTV.
Secondly, the original policy rationale for Section 73 has gone. Significant cable roll-out is now a thing of the past and the TV distribution market is now highly competitive. Cable is a highly effective and well resourced competitor to Sky and Freeview/digital terrestrial television. There is no reason to continue to grant a primary legislative advantage from the 1980s to one particular platform operator in the current competitive market. Moreover, the Communications Act 2003 introduced a “must offer” obligation on the PSBs under Section 272, requiring broadcasters to offer the main PSB services for carriage on the cable, as well as satellite, platform. In addition, Virgin Media contracts with the PSBs for the supply of all the other channels offered by the PSBs that are not covered by Section 73.
Thirdly, the provision is almost certainly in breach of European law and exposes the UK Government to damages actions. In its submissions to the CJEU on the TVCatchup case, the European Commission made clear that it had grave doubts about the compatibility of Section 73 with the 2001 copyright directive. I will not go into the detail of that. The Commission went on to observe that it was “very doubtful” that the UK court’s ruling that TVCatchup could make use of Section 73 for that part of its service transmitted over the internet “could stand”. Notwithstanding the Commission’s clear position, however, the CJEU could not deal with the compatibility of Section 73 in its judgment in the TVCatchup case because the UK court had declined the request of the broadcasters to refer the question of the compatibility of Section 73 to the CJEU in the first place. What should the Government do in the face of this?
In broadcasters’ meetings with the Government to date it has been very hard to understand the remaining policy rationale for Section 73, particularly given the “must offer” obligation that applies to the PSB channels. Broadcasters believe that repeal of Section 73 would be a sensible deregulatory measure that would end the unjustifiable damage which is being suffered by the PSBs, and would ensure that the UK continues to meet its Community law obligations. They believe that the forthcoming legislative programme, including this Bill, provides the Government with an opportunity urgently to consider repealing Section 73, assuming this cannot be achieved by secondary legislation following the passage of the Enterprise and Regulatory Reform Act. Repeal of Section 73 would not only assist broadcasters in their fight against parasitic websites—we have used that term earlier today—but would also ensure that UK legislation complies with the EU acquis and therefore reduces the risk of any potential infringement proceedings against the UK.
The negative commercial impact of retaining Section 73 is significant for UK public service broadcasters, and ultimately, as a result, the producers of the audio-visual content they broadcast. This impact will continue to increase if no action is taken by the Government to repeal these provisions. I beg to move.
Lord Stevenson of Balmacara
My Lords, I declare no current interest in this matter, although I was director of the British Film Institute when the Copyright, Designs and Patents Act was enacted. I was also author of a minor monograph that is still in print.
The amendment troubles me. Section 73 of that Act is only one component of a complex web of regulation that provides equilibrium in the UK broadcast market. It ensures that consumers who have already paid for PSB content through the licence fee or indirect taxation can get access to publicly funded content through a cable platform at no additional cost. It is true that Section 73 is a relatively old provision created when the cable industry was in its infancy. It is also true that the cable industry is in a different position than when Section 73 was conceived. However, the age of something should not determine value. Attempts to delete old things from existence can surely give no Member of your Lordships’ House much comfort.
However, the amendment gives the Government a chance to look again at the objective of Section 73 and to ask themselves whether the outcomes it delivers today are still relevant to their public policy objectives. I acknowledge that the recent TVCatchup case referred to by the noble Lord, Lord Clement-Jones, raises legitimate concerns about the use of Section 73 as a defence for the retransmission of free-to-air PSB channels online.
I understand that the Government are currently looking at how Section 73 might be amended and tightened to ensure that the beneficiaries of the clause are the intended platforms that are acting within the law. Perhaps when he responds the Minister will again put on his DCMS hat and let us know what progress is being made in that review, and indeed what progress is being made on the communications White Paper—another of the vanishing opportunities for the Government to intervene in these areas, which has been promised since 2010. It seems that we are no nearer to a publication date.
However, apart from the TVCatchup issue, I understand that Section 73 continues to provide PSBs and consumers with the most efficient route to access the PSB channels that most cable subscribers want and who equally do not want to have to pay twice for. Some noble Lords may be aware of the ongoing row between the PSB community and the Sky platform about the level of fees paid to broadcast on the commercial satellite platform. Indeed, one of the major gripes that PSBs have at the moment—and I understand that they been lobbying for this through the communications review process—is that they want to see an end to fees that they have to pay to platform providers to carry their content.
However, when setting out the Government position in his speech to the Oxford Media Convention in January 2013, the Culture Minister said:
“I welcome the steps Sky have taken so far to reduce retransmission fees to a much lower level. But we want them to go further, taking into account the undoubted value that PSBs offer to satellite platforms and their viewers, so that there’s a level playing field: zero fees either way”.
This would, indeed be a good outcome for consumers. However, the question remains of how to draft a clause to ensure that there is a level playing field between all platforms, with zero fees either way.
Unlike publicly funded platforms and unlike BSkyB, cable has never charged PSB channels to carry their content. Given that this zero charge/zero pay policy is the policy outcome required by the Government, and we understand that this issue will be considered in some detail by the Government when their communications White Paper is eventually published in the summer, the amendment seems somewhat previous, as well as contrary to consumer interests.
While the recent TVCatchup case may indeed require an adjustment to the current law, abolishing the clause entirely, as the noble Lord, Lord Clement-Jones proposes, seems entirely contrary to the interests of 4 million cable customers who access public service content, at no cost to those broadcasters, through the cable platforms. I hope that the Government will firmly resist the amendment.
Viscount Younger of Leckie
My Lords, the amendment would repeal Section 73 of the Copyright, Designs and Patents Act 1988—in short, the CPDA—and thereby remove the copyright exemption for the retransmission by cable of certain public service broadcasts, known as PSBs. The UK television industry is a great success story. We are world leaders, producing great programmes and formats that are then sold the world over. We want to see the continued success and growth of this vibrant, important sector of the economy.
Section 73 of the CDPA is just one part of the overall framework that supports the availability of TV and investment in television programming in the UK. This framework consists of a variety of rules and regulations that affect the production and availability of public service programming and its relationship with the services or platforms that carry it. These include the obligations on PSBs to offer their content to all relevant platforms, the rules governing payments by broadcasters for technical platform services, and the powers for regulators to compel these services to carry PSB content.