Lord Clement-Jones
Main Page: Lord Clement-Jones (Liberal Democrat - Life peer)Wednesday 22nd February 2017
(7 years, 2 months ago)
Lords ChamberRead Full debate Digital Economy Act 2017 View all Digital Economy Act 2017 Debates Read Hansard Text Amendment Paper: HL Bill 102-I(Rev) Revised marshalled list for Report (PDF, 106KB) - (21 Feb 2017)
Lord Clement-Jones
“Bill limits for mobile phone contracts
(1) A telecommunications service provider supplying a contract relating to a handheld mobile telephone must, at the time of entering into such a contract—(a) allow the end-user the opportunity to place a financial cap on the monthly bill under that contract;(b) allow the end-user to switch (at no extra charge) to another provider, which meets the specified standards or obligation as provided for in section 3, or to deem the contract to have been terminated by a consistent breach of the standards or obligation as provided for in section 3;(c) allow the end-user to switch mobile providers according to rules set out by OFCOM in accordance with the following principles— (i) that switching must be free to the consumer, unless the consumer is aware of and has consented to fair and reasonable restrictions and charges to do so;(ii) that the switching process itself must be quick, and on an agreed date;(iii) that consumers must have access to their consumption or transaction data, and this must be in a format that can be easily reused and they must be able to authorise third parties such as comparison sites to access their data to help them to switch;(iv) that sites and tools providing comparisons to consumers that receive payments from suppliers must make clear where the payments affect the presentation of results; and(v) that there must be an effective process for consumers to receive redress if there are any problems with the service.(2) A telecommunications service provider under subsection (1) must not begin to supply a contracted service to an end-user unless the end-user has either—(a) requested the monthly cap be put in place and agreed the amount of that cap, or(b) decided, with the decision recorded on a durable medium, not to put a monthly cap in place.(3) An end-user may, after the start of the contracted service—(a) contact the service provider to require a cap to be put in place and agree the amount of that cap, or(b) require a cap to be removed, with the requirement recorded on a durable medium.(4) The end-user should bear no cost for the supply of any service above the cap if the provider has—(a) failed to impose a cap agreed under subsection (2)(a) or (3)(a); or(b) removed the cap without the end-user’s express consent, provided on a durable medium as required under subsection (2)(b) or (3)(b).”
Lord Clement-Jones (LD)
My Lords, Amendment 5 is an enhanced version of Amendments 14 and 15 in Committee, which the noble Lord, Lord Stevenson of Balmacara, introduced, but it includes additional principles that I raised and which were contained in the Government’s 2016 paper Switching Principles: Government’s Response and Action Plan. It deals with two issues very close to the interests of consumers: billing and switching. As the noble Lord, Lord Stevenson, said in Committee, mobile phone billing is,
“one of the most complicated areas of domestic expenditure”.—[Official Report, 31/1/17; col. 1145.]
There may be, in particular, some danger of vulnerable customers getting into difficulty and it should be possible for a consumer to set a cap on expenditure on their mobile phone.
As my noble friend Lord Foster pointed out in Committee, most mobile phone contracts are similar to credit card contracts, in that,
“they are a credit agreement, paying retrospectively for services that have been received. Yet with the credit card, of course, a limit is imposed upon you, which is not currently the case with mobile phones”.
He cited evidence from Citizens Advice that,
“in 2014-15 it helped no fewer than 27,000 customers who had problems with mobile phone debts”.—[Official Report, 31/1/17; col. 1147.]
He reminded us that Ofcom alerted us to this problem five years ago and proposed that it could be addressed by mobile service providers offering an opt-in cap to their consumers. The remainder of the amendment would give explicit power to Ofcom to set the gaining provider-led switching rules, which we all want to see, and sets out the principles which the rules must follow—the very principles which the Government themselves have set out.
We would like to see both these aspects enshrined in primary legislation. In her reply to these amendments in Committee, I am afraid that the Minister—the noble Baroness, Lady Buscombe—was not convincing when she talked of providers offering apps, warning text messages and the like to manage usage, the Government’s expectations for providers to manage bill shock, and of course the guidance issued by Ofcom, which I am sure every consumer reads avidly. That is not enough in this day and age. This is not a draconian requirement. This is a voluntary, opt-in capping system that is being proposed.
As regards switching, the Minister said that Ofcom was being given the necessary powers by Clause 2 and had an existing overarching duty to consumers. This is a much more explicit duty. It also ensures that the Government’s own principles are enshrined in a duty to make rules, which the Minister, however, could not assure me were the ones in contemplation by Ofcom. I hope that the Government will welcome this carefully thought-through amendment as being very much in the interests of consumers when mobile phone usage is, if anything, even more important than broadband. I beg to move.
Lord Mendelsohn
My Lords, I support the amendment and thank the noble Lord, Lord Clement-Jones, for an outstanding summary. In relation to caps, it is important to understand the consequences of bills which cause stress to people in particular circumstances, and why this is another part of ensuring that we have the right social impact in such policies. Mobile phones are not luxury products. Actually, low-income households are more reliant on their mobile phones than other households: they are five times more likely to be mobile- only—that is, no landline or broadband—than the highest earning groups. The major cause of mobile phone debt is unexpectedly high bills which are usually caused by consumers using services not included in their standard monthly tariffs—very frequently with no real conception about how the complexity of the tariff has an impact on their bills. These unanticipated bills can make it harder for consumers to budget, especially if they are on a low income. Unexpected bills can exacerbate a consumer’s debt problems. Citizens Advice reports that 70% of its clients who receive mobile phone debt service also receive advice on other debts. The consequences are significant and only these measures outlined in this amendment will in our view have the impact to address this problem. In other ways, complicated information and other consequences will limit the capacity of people to manage their debts.
I must confess that I think ensuring roaming capacity —not a national roaming programme—for those people in the absence of service in order to increase their ability to access mobile services is a terrific idea. I thought it was a very good idea when I first heard it, so I got one, and it is outstanding. I have cracked many of the problems of very poor mobile service, including in that far-fetched place, which never seems to have decent service, called Hampstead. I now have perfect service—it is an absolutely terrific system.
I think that there is a very strong case for this. We are not talking about a national programme, but it certainly addresses a large part of the problem about coverage. There seems to be no particular issue: it gives us good customer experience, it is not particularly difficult to roll out, and that is why it is sensible and worth while for it to be in this Bill. Now that I have another phone, I of course endorse the provisions on switching, but I would make this point about switching and compensation. These strengthen and make explicit the powers of Ofcom to require certain changes in relation to compensation to make sure that companies automatically compensate customers who experience poor levels of service. I think there is a very strong consensus, and that Ofcom will come to the conclusion that it is vital that consumers are financially compensated. An automatic compensation scheme will act as an incentive to telecoms companies to improve their performance.
Lord Clement-Jones
My Lords, I thank the Minister for that response. It was very interesting that we had the full range of ministerial responses: the unintended consequences; the burden on the emergency services; the “too prescriptive” argument; “we are working with Ofcom and getting this very carefully right”; and the “we cannot enshrine principles because they might go against the spirit of the principles” argument. I thought that was a very interesting one.
The Bill is designed to deal with frustrated customers, and, of course, there is a risk of duplication, as the Minister says—which is an interesting one—despite the fact that we are being too prescriptive. I am not sure that I sense the total logic behind the Minister’s response. A number of different barriers have been raised, but I cannot really see great merit in the response in that event.
As regards capping, this is a voluntary system. Raising the question as to whether people are going to put a burden on the emergency services seems to me extraordinary. There are people with pay-as-you-go SIM cards who are in the same position. What we are asking for is for people to be put on the same footing, so that there is a limit to which they are subject, but a voluntary one that they ask to be imposed so they can have better control over their own finances. That seems an eminently sensible and not overly prescriptive measure that we would be asking Ofcom to ensure service providers have in place.
As for switching, I remind the Minister that these are the Government’s own principles. I cannot see how it goes against the principles to include them in the Bill. That is tautologous, and certainly not an attractive argument against including switching rights.
Consumers have been waiting for switching ability for mobile phones for a very long time. I have been corresponding with Ministers for a long time on the subject. I am delighted that we are seeing the beginning of movement, but telling us to wait for an Ofcom paper on next steps for mobile that will be the beginning of a brave new world when in fact, we could be amending the Bill to put duties on Ofcom straightaway, is not very attractive. I want to test the opinion of the House.
The Earl of Clancarty (CB)
My Lords, I take this opportunity to congratulate the Government on introducing this amendment, for which authors will be very grateful indeed. Credit should go to the groups and associations that have campaigned for this change, including the Society of Authors and the Authors’ Licensing and Collecting Society, which have both campaigned on this issue for some time.
I have just one issue with the wording of the Government’s amendment. The Society of Authors briefing argues that it would be clearer if the words, “for the purpose of library lending” were added to “lawfully acquired” in line 32. This clarification is in the amendment in the name of the noble Lord, Lord Clement-Jones. The phrase “lawfully acquired” hangs there by itself and although it might be argued that it is implied that the acquisition is for library lending, that is not absolutely clear. It should be stressed that all interested parties were in agreement about this and would be happier if this clarification were made. Will the Minister promise to look at this before Third Reading and see if it can be tweaked?
Lord Clement-Jones
My Lords, I add my voice to the thanks offered to the Minister by the noble Earl, Lord Clancarty, for having now included this amendment, albeit there are some questions to be asked. I hope the Minister will be able to tell us why the wording is rather different from that in the amendment we put down in Committee. Those differences need to be accounted for but this is a good way of delivering on a commitment that the Government made. It is really the final fruits of the Sieghart report and will be strongly welcomed by authors and writers across the country. We all value the public lending right, which makes a small but very significant addition to the income of authors.
Lord Maxton
My Lords, I too welcome the amendment; it is well worth while, but it is worth making a point I made earlier. Of course, there are now books that are written entirely as e-books and not published at all in printed form; they are published for the Kindle or similar devices. Does this amendment cover these as well? Does it give the author of such books exactly the same rights as the author of a book published in printed form?
Of course, e-books are now lent not just by public libraries. Amazon has its own public service—well, a service anyway; it is not public; you pay for it—whereby it can lend you a book that you can read on your Kindle for a limited time and that is available only as an e-book and not in printed or any other form. Do the same rights extend to authors whose books are lent in this form? Are these the same rights you would get through a public library?
My last point is also one I have asked about before. Public libraries in Scotland, of course, come under the local authorities, and local authorities in Scotland come under the Scottish Parliament. Is this a devolved matter or will it now be covered by the UK as a whole?
Lord Clement-Jones
My Lords, there is equal enthusiasm on these Benches for this amendment. The noble Lord, Lord Stevenson, has, as ever, put his finger on the issue. I plead guilty to the same constitutionally improper thoughts as the noble Lord, Lord Stevenson. I cannot see why the Government should not take the powers that are needed in advance simply because this vehicle happens to be passing through and there may not be another suitable vehicle very soon.
On the balance of probabilities, at the very least it seems to us that these powers are needed. Those who have spoken to us have universally said that a new offence is needed and that the existing powers are not adequate. Certainly the Motion Picture Association, Sky and others made the point that enforcement agencies, such as trading standards and PIPCU, are unable to pursue strong cases due to the lack of an appropriate offence. This is all about creating an appropriate offence.
I very much hope that the Government, whether at this stage or the next stage, will take heed of the points being made and will give themselves this enabling power in order to introduce a more specific regulation at a future date. The Government should also consider a point that was strongly made by those organisations and think about the enforcement aspects as well in the call for evidence. I hope they will consider the issue which I will be raising next week in an Oral Question on PIPCU funding, which is an important aspect of this. If a power is created and there is no proper enforcement mechanism, it is not a particularly useful creation. I hope the Government will take heed of the fact that this is thundering down the track at great speed and could, as both these Benches described in Committee, have an extremely harmful impact on the audio-visual industries in future.
Baroness Kidron (CB)
My Lords, I want to reiterate a point I made in Committee about the context in which young people receive this material. Almost 50% of 16 to 17 year-olds are streaming, and along with the streaming comes advertising, pop-ups and adult material. This is a subject that is close to the Government’s heart, as shown by Part 3. This seems a wonderful opportunity to deal with it again in this part. It is not just 16 and 17 year-olds; whole swathes of younger children are getting the habit. As a maker of original IP and as someone who cares very much about the context in which children have their digital diet, this is a very small thing and I support the noble Lords in their amendment.
Lord Clement-Jones
“( ) Any creator who has transferred his or her cable retransmission right to a broadcaster shall retain the unwaivable right to receive equitable remuneration for the exercise of the retransmission right.”
Lord Clement-Jones
My Lords, I hope this will be a short debate. I was pleased to see the Government’s response to the technical consultation on transitional arrangements, which in a sense is a quick response to the spirit behind Amendments 21 and 29, which I tabled in Committee. It is another pleasing and welcome indication of the speed with which the Government are responding to some of the arguments being made, such as the call for evidence on IPTV.
An unequivocal statement has been made, which I very much hope the Minister will repeat, to the effect that on the basis of the responses to this consultation, the Government have decided to repeal Section 73 without a transition period. I am assuming that if I get such a pledge from the Government, it will be upheld, and that there is no need to amend the Bill to that effect, but obviously I would very much like those assurances from the Government at this stage.
On the right to equitable remuneration where a creator has transferred his or her cable retransmission rights to a broadcaster, the concern is that if public service broadcasters are going to receive licensing income for carriage of their services on cable networks, those underlying rights holders—such as scriptwriters and directors—should receive an appropriate share of this new revenue. The Government in their new Clause 30 have made clear what happens to performing rights, because they deleted old paragraph 19 of Schedule 2 to the Copyright, Designs and Patent Act 1988. It has not, however, been made absolutely clear what the score is as far as the copyright of creators such as authors is concerned. I do not know whether the IPO has been able to give Ministers guidance on that. However, this is a probing amendment, and I very much hope that the Minister will be able to explain what is contemplated.
The problem is that where creators assigned their rights, that was in the old days. There may be licences in respect of which public service broadcasters attributed a zero value to retransmission rights, but of course, in future, those rights will not necessarily have a zero value. I therefore hope that the Minister can at least give some assurance that this issue is being looked at, and that at least some guidance or encouragement can be given to public service broadcasters to look again, in all equity, at some of their past rights clearances, so that creators will not be disadvantaged in the income they receive from what could be a new income stream for our public service broadcasters. I beg to move.
Viscount Colville of Culross (CB)
My Lords, I voice my admiration for the noble Lord, Lord Clement-Jones, and his dogged determination to get Section 73 of the copyright Act repealed, and I am grateful to the Government for including its repeal in the Bill. Their response to the technical consultation seems to mean that it will be repealed immediately, but I too would like the Minister to assure us that it will be.
Lord Clement-Jones
My Lords, I thank the Minister for the first half of her reply. She repeated pretty much what was in the response: no transition is envisaged and repeal is effectively to be commenced without delay, before the Summer Recess—I hope I have paraphrased her correctly. I take that very much on board, and I am delighted that the Minister has been able to confirm it.
I am not quite so delighted by the second half of her reply. She says that underlying rights holders’ rights have been factored into existing agreements, but that is just the problem: zero value has probably been attributed to the retransmission rights held by PSBs. Of course, until the repeal of Section 73 they will have zero value. After its repeal, value will be ascribed to them, but that means those who signed agreements in the past will not necessarily get the benefit, hence the reference in the amendment to equity. That is a rather important concept.
I will read carefully what the Minister has said—no doubt following the wonderful advice she has received from the Intellectual Property Office—and will discuss it with the Society of Authors and others who are very concerned about some of these issues. I might return to the matter at another stage of the Bill to tease out a little more information from the Minister. In the meantime, however, I beg leave to withdraw the amendment.
Lord Clement-Jones
“Transparency and fairness obligations
(1) Authors, artists and performers (“creators”) shall receive on a regular basis timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights as well as subsequent transferees or licensees, and the information shall include information on modes of exploitation, revenues generated and remuneration due.(2) The obligation in subsection (1) may be met by complying with a code of practice collectively bargained between relevant representative organisations of creators and the representative organisations of those who exploit their works, taking into account the characteristics of each sector for the exploitation of works.(3) Any such code of practice is to provide that each creator is to be entitled to a statement of income generated under such licence or transfer arrangements at regular intervals during each annual accounting period, and provide an explanation as to how the creator’s remuneration has been calculated referencing any contract terms relevant to the calculation.(4) In the event of failure of a transferee or licensee mentioned in subsection (1) to comply with a code of practice, or in the absence of such a code of practice, the creator shall be entitled to apply to the Intellectual Property Enterprise Court for a detailed account of revenues due to the creator generated from the modes of exploitation referred to in subsection (1), and in the event of failure, the Court may award damages in the amount of any shortfall in the total amount due to him.”
Lord Clement-Jones
My Lords, in Committee I explained the importance to authors and other creators of transparency, and the significance of the proposed new EU directive. The noble Baroness, Lady Buscombe, got the point entirely, as ever, and said the amendment would require those organisations exploiting copyright works via licences to provide the relevant creators with regular information on the use and the revenue they generate, and stated that this obligation could be met by complying with a code of practice determined at sector level, which is entirely correct.
I should add for clarity that, if there is a concern by licensees in those circumstances about the leakage of their commercially sensitive information, the way information is channelled can of course be dictated by a code of conduct through appropriate mechanisms, such as the advisers of creators and so forth. That is could be well catered for if there were concerns among those licensees or assignees.
The Minister confirmed that the Government were already engaged in discussions to address this issue. She said that,
“the UK will actively engage in these debates … before considering the case for domestic intervention”.
She also said,
“it is worth giving careful consideration to the part that these industry-led initiatives can play”,—[Official Report, 6/2/17; col. 1481.]
in terms of a code of conduct and so on. As I said at the time, though, she never actually agreed that the principle of transparency should be incorporated into law, whether directly or by transposition. Clearly, if the EU directive is passed within the two-year period after notice of Brexit is given, it may well be incorporated into UK law. The Minister gave encouragement to the principle but did not say that the Government fully supported that element of the directive. Article 14 of the draft directive is very clear in giving creators those kinds of transparency rights.
So I return to the fray on this occasion, and I hope the Minister can warm her words further in the face of this amendment being retabled. I beg to move.
The Earl of Clancarty (CB)
My Lords, I support the amendment of the noble Lord, Lord Clement-Jones. He talked about the principle of transparency, and that is the nub of it. I shall just give an example: the history of pop music has, in many ways, been the history of exploitation of artists in a bad way. Much of that exploitation was based, in the past, on keeping artists in the dark. I am sure that today many licensees and transferees—some of which are huge companies—behave very well, but there is a systemic imbalance here, which means that there is potential for abuse. Artists have a fundamental right to information about exploitation of their work, which is, in any case, useful for knowing quite simply what has happened to their work when it is pushed out into the world.
Baroness Buscombe
My Lords, I thank all noble Lords who have taken part in this debate on Amendment 24, tabled by the noble Lords, Lord Clement-Jones and Lord Foster. This amendment, which was first tabled in Committee, partly reflects proposals currently under discussion at European level as part of the draft copyright directive, as noble Lords have said this evening. It would require organisations using copyright works via licences to provide creators with regular information on how their work has been used, and the revenue generated by their use. This obligation could be met by complying with a code of practice determined at sector level. The amendment also provides creators with recourse to the intellectual property enterprise court in cases where such a code was not implemented or adhered to.
As we said in Committee, the Government agree that transparent markets can benefit all parties. I particularly understand the potential benefits of transparency in areas such as the creative industries, where individual artists—writers, musicians and performers, as noble Lords have said so eloquently this evening—often deal with large corporations. As noble Lords are aware, the Government are currently in the process of negotiations on the draft copyright directive, and I continue to hold the view that we should allow this process to reach a conclusion before considering the case for domestic intervention. I appreciate that the noble Lords, Lord Clement-Jones and Lord Foster, the noble Earl, Lord Clancarty, and the noble Baroness, Lady Jones, would welcome a firm statement of support for the Commission’s proposals in this area. Unfortunately, however, I am not in a position to give such a statement this evening. However, I can assure noble Lords that the information received in the recent call for views on the directive has been carefully considered, and that the Government will continue to engage constructively in this debate, including in relation to the role of collective bargaining mechanisms and industry-led codes in improving reporting to creators.
I also wish to raise another issue regarding the amendment. The proposals from the European Commission include an ability for member states to adjust or restrict the transparency obligation in certain cases, taking into account, for example, the contribution of an individual creator to an overall work, or the proportionality of the administrative burden. Views on the benefits of these powers are mixed, and are likely to require careful consideration with the creative industries at sector level if the directive comes into force in the UK. However, I believe that it would be imprudent to accept an amendment at this stage that does not appear to provide the Government with similar flexibility. Doing so could risk imposing burdens on publishers, producers and broadcasters that restrict their ability, in effect, to develop new talent. With this explanation and the renewed assurance that the Government really do take the concerns of creators in this area seriously, I hope that the noble Lord will withdraw his amendment.
Lord Clement-Jones
My Lords, I congratulate the noble Baroness, Lady Buscombe, on finding a new argument at the end; I thought that was magnificent. Imprudence is something that I would never want to be accused of in these circumstances. I thought that this amendment did not reflect fully what Article 14 contained. The Minister was absolutely right: it was entirely the intention that it would not contain that, because of the difficulty of interpretation. It is possible to do that more easily in continental law, rather than when you transpose it into UK law. I shall be very interested to see what our parliamentary draftsmen make of it, if ever they are faced with the task of transposing Article 14 into UK law.
I like the sound of “engage constructively”. I know that the Minister’s heart is in the right place and I think she said something like, “We really do mean this”, so the sincerity was utterly apparent. In the face of that, how can I do anything but withdraw the amendment? I beg leave to withdraw.