Digital Economy Bill

Lord Foster of Bath Excerpts

1st reading (Hansard): House of Lords & Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Lords Chamber

[Baroness Buscombe (Con)]

My Lords, let me begin by making it very clear that the Government are committed to building a country that works for everyone, and that we are working to make sure that nobody is digitally excluded. The broadband universal service obligation will provide a digital safety net by giving everyone the legal right to request a connection to fast, affordable broadband.

Amendment 4 proposes that the broadband USO should include a social tariff. The existing telephony USO already includes one—as the noble Baroness, Lady Janke, said—and BT has voluntarily added broadband for those who want it. When Ofcom was commissioned to provide advice to the Government on the design of the broadband USO, we specifically asked it to consider a social tariff to ensure that the USO was affordable for all. Noble Lords will be aware of the report that was published on 16 December. Ofcom’s USO analysis said that a social tariff was likely to be appropriate for low-income users. Once we have considered Ofcom’s report we will publish a consultation on the detailed design of the USO.

I should also make it clear—particularly in relation to the contribution from the noble Lord, Lord Maxton, and the reference by the noble Baroness, Lady Janke, in connection with vulnerability and access—that the Government are committed to actively tackling digital exclusion, which can be caused by lack of access but also by other barriers such as lack of basic skills. Some people will never be able to use online services independently, so the Government are committed to ensuring that assisted digital support is always available for these people. The Government’s digital support strategy mandates departments to provide this support.

If I have interpreted Amendment 5 correctly, it proposes that consumers would not be required to pay any excess costs above any cost threshold that is set. Under the current telephony USO, consumers pay the first £130. BT will then pay up to a threshold of £3,400. Consumers are then asked to pay any further costs above the cost threshold. Similar arrangements are in place for other essential services such as electricity and water. Ofcom’s technical advice, which we are considering, sets out analysis of this kind of model for a broadband USO.

Under the telephony USO, consumers have the option of carrying out some of the work themselves to help reduce their costs. Individual consumer requests for a USO connection can also be aggregated to help reduce the cost per premises to below the reasonable cost threshold. We are considering whether this type of arrangement would be suitable for the new broadband USO; this will be the subject of the later consultation. With that explanation, I hope that the noble Baroness will be able to withdraw her amendment.

[Lord Foster of Bath (LD)]

Could the Minister help the House with what she has just said about Ofcom’s recommendation being that it was likely that a social tariff would be needed? Can she explain exactly where within the legislation that social tariff will be introduced, bearing in mind what is said in Clause 1 about setting out the universal service obligation characteristics?

--- Later in debate ---

[Lord Foster of Bath (LD)]

My Lords, as my noble friend Lord Fox has said, I will very briefly address one element of the report, though I support the principle and all other aspects of the proposed list of things to be covered in that report. However, I draw the House’s attention to subsections (2)(g) and (h). Paragraph (g) talks about the take-up of superfast broadband as a proportion of connected premises and (h) about the measures taken by various bodies to improve that take-up.

I fully share the Government’s desire to create a digital Britain, with all the benefits that it can bring, including the online delivery of our public services. However, all the discussions I have had about broadband since joining the House have predominantly been about its speed and making it available. We know the figures—they are fairly clear: about 89% of households can currently access high-speed broadband, but we also know that only 31% of households have actually taken up the offer and 22% remain entirely offline. Furthermore, last year’s Ofcom study revealed that some 10% of households make it clear that they have no intention whatever of getting on to the internet at any speed. We also know that it is those with limited means—perhaps older and less well-off people—who make up the bulk of the 30% of the population who currently have either very limited or no access to the internet.

Bearing those figures in mind, and while I welcome all the energy, enthusiasm, debate and deliberation going on in the House—and by the Government, Ofcom and others—to improve the availability of high-speed broadband, at the same time as addressing the supply side we need to do far more work to address the demand side as well. If we are to reap the full benefits of digital Britain—to bridge the digital divide and reduce the unit cost of the installation of high-speed broadband—we need a concentrated and co-ordinated demand-side management programme. I have argued before that such a programme would address issues such as: skills training, which we will come on to later in the Bill; marketing the benefits of broadband; addressing the cost barriers—we have already had a brief debate on that with the amendment of my noble friend Lady Janke in relation to social tariffs; and of course developing quality, technology and content.

I readily acknowledge, as I have in the past, that there is good work going on in this regard by BT itself, the BBC, Barclays and many others. Local councils deserve a great deal of credit for the work they are doing, and the Do It Digital campaign is trying to help businesses get online. The Government have played their part with changes to the IT curriculum and aspired improvements, at least, to digital skills.

However, given that the take-up rate is so low, far more needs to be done, from the skills agenda to having a digital TV switchover-style campaign, advertising the benefits of getting online. It needs co-ordination. I believe that BDUK would be best placed to do that—its business voucher scheme was a good demand-driver—and the Minister might comment on where we are with the next iteration of that in his response. I toyed with tabling an amendment adding to the purposes of BDUK to cover responsibility for that but, for the time being, so that we have an opportunity to hear the Minister’s reaction and find out a bit more about what the Government plan in demand-management measures, I thought it more sensible to leave it included as one of the issues to be reported under the excellent proposal of my noble friend.

[Lord Mendelsohn]

My Lords, I express our support for the amendment so ably produced by the noble Lord, Lord Fox. It is entirely consistent with Amendment 21, to which we shall come in the next group, and it provides a useful window on performance. In considering what the full report should look at, I just suggest that it would be useful if it considered upload speeds, outages and user experience. We talk far too often about what speeds are delivered to the home and not enough about the user experience; it would be very useful to include that in such a report.

--- Later in debate ---

[Lord Foster of Bath]

My Lords, we on these Benches have much sympathy for Amendments 15, 16, 18 and 22, although I know that my noble friend Lord Clement-Jones will say a few words in a minute or two about Amendment 15. I will confine my remarks predominantly to Amendment 14. I am conscious that many Members of the House are probably regular users of credit and debit cards. However, we are of course also increasingly regular users of mobile phones. I suggest to noble Lords that most mobile phone contracts are in all but name no different from their credit card contracts: 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.

As mobile phones have developed since they were first introduced 30 years ago, the services that are offered and the billing arrangements are increasingly complex. There are benefits from all of that, but their complexity can lead to difficulty for some people, not least people from low-income families, who are five times more likely to rely on their mobile phone than people from high-income families. Very often their mobile phone is their only connected device, as they do not have a fixed landline or broadband connection. Unfortunately, as the complexity has developed, some of the support systems for customers have not gone alongside them. We know from evidence from Citizens Advice that in 2014-15 it helped no fewer than 27,000 customers who had problems with mobile phone debts, which totalled some £11 million. I was told of the case of Martin, who,

“was in the British Armed Forces and had been deployed overseas. He contacted his mobile network provider before travelling and, based on their advice, believed he had disabled data roaming. He took his phone with him and used Skype to stay in touch with his wife back in the UK, believing he was connected via Wi-Fi and that Skype calls would therefore be free. On arriving back in the UK, Martin found he had been billed £3,700 for data roaming”.

We need some mechanism to help customers from falling into debt unexpectedly. The amendment proposes the voluntary and opt-in cap system.

During the passage of the Bill in another place, a similar amendment was put before the Government on a number of occasions, and they repeatedly said that they did not think such a measure was necessary, because there are a variety of ways in which the consumer can avoid bill shocks. They talked about the range of apps that are available, dedicated phone lines for people to check on their current limits, warning texts that are sent when customers approach their allowances, and a range of different online tools. However, the reality is that none of that saves the large number of people who get into difficulty with their mobile phone bills. Nearly five years ago, Ofcom recognised that this was a problem, producing a report in which it said:

“We will also push for increased availability and use of financial caps … We have already called on”,


mobile service providers,

“to do more to develop and promote ‘opt-in’ systems so that consumers can choose to set limits on their expenditure”.

Indeed, Ofcom went even further five years ago, saying that,

“it might be more appropriate to move to an ‘opt-out’ system of financial caps”.

So, five years ago, Ofcom was alerting us to a real problem—a problem that it was proposing could be addressed by mobile service providers at least being able to offer an opt-in cap to their consumers. It did not proceed with that because the mobile phone operators said it would be far too expensive and too difficult to change their billing systems. But those were exactly the same arguments the mobile phone operators used in 2009 against the imposition of the EU roaming cap, which is in place. They said it was far too difficult and could not be done—that there were technical difficulties and so on. Yet they have done it, and it is perfectly possible for them to do it in this country. The evidence of it being perfectly possible is that two companies, Three and Tesco Mobile, have demonstrated that it can be done. They have done it, they are leading the way, and they have shown that they are providing a better service to customers as a result.

The time has now come for us to require mobile service providers to offer an opt-in cap system to their customers. The customer does not have to take it, but the offer should be there. I hope that, at this stage of the Bill— having rejected it on a number of occasions in another place, and given that Ofcom recommended it some five years ago—the Government might now be minded to accept the amendment, or at least something like it.

[Lord Clement-Jones (LD)]

My Lords, at the beginning of the debate on this group, the noble Lord, Lord Stevenson, said this was rather a disparate group. I agree with him, and on that basis it is entirely logical that I am quite supportive of one amendment, Amendment 15, but entirely unsupportive of another, Amendment 233.

This takes us back to the Consumer Rights Act, which feels but yesterday although, looking back, I see that it was debated at the end of 2014. Amendment 15 is very timely and it is right to probe the Government’s intentions on switching. I have a letter, which the noble Baroness, Lady Neville-Rolfe, wrote to me after we had put down various amendments on the then Consumer Rights Bill, on gaining provider-led switching. She said:

“I think we are in full agreement on the likely benefits of gaining-provider led switching for consumers and for competition in the telecoms industry. This view is reflected in our work on switching, since before the publication of the Consumers, Connectivity and Content strategy paper, when two experts from Ofcom were seconded to DCMS to help develop policy on switching”.


Moving on slightly from there, I thought it was quite encouraging that, in the Government’s May 2016 paper, Switching Principles: Government Response and Action Plan, a number of principles were set out. But I see none of them reflected in the primary legislation. I do not know what the Government’s intentions are in terms of regulations. It is not even clear that gaining provider-led switching will be permissible. Therefore, I ask the Minister whether principles such as these will be enshrined in the secondary legislation:

“Switching should be free to the consumer, unless they are aware of and have consented to fair, reasonable and clear restrictions and charges to do so … The switching process should be led by the organisation with most interest in making the switching process work effectively—the gaining provider … Sites and tools providing comparisons to consumers that receive payments from suppliers should make clear where this affects the presentation of results”.


These are principles that the Government have set out in their own paper, and it is not clear at this stage whether they fully plan to deliver on them. I would appreciate an answer from the Minister on that.

On Amendment 233, I am not sure why the noble Lord, Lord Stevenson—with whom I have sparred on a number of occasions on software issues, and certainly on the then Consumer Rights Bill—believes that we are in a different place and need another bite at this particular cherry. The software industry carefully negotiated a particular break-out from the Consumer Rights Act, for good reasons, because of the way that software is developed. There are beta applications that need to be perfected before the final product is fit for purpose, and there are upgrades and so on, as is perfectly well understood by the industry. So I do not support a call for another look at this. I do not believe the evidence is yet there that we have moved into a new place. It is barely two years since we debated these issues and I do not think technological progress has been so quick that we can afford another look at this without prejudicing our software industry.

Digital Economy Bill

Lord Foster of Bath Excerpts

2nd reading (Hansard): House of Lords
Tuesday 13th December 2016 Lords Chamber

[Lord Foster of Bath (LD)]

My Lords, I too thank the Minister for introducing the Bill and for the early discussions he has had with us. As we have heard, it is a long Bill and, in some ways, a rather disappointing one, as it fails to address many of the issues needed to provide increased support for our amazing creative industries.

There are notable absences in the Bill which we hope may be covered by amendments in Committee—ideally, government amendments—addressing issues such as the online sale of counterfeit electrical goods; stronger action by search engines to deal with copyright infringing material and online piracy; and ensuring a level playing field in the next round of spectrum auctions. As the noble Lord, Lord Stevenson, asked, why are there no measures to tackle the mass buying-up of tickets for gigs and theatre performances by people who have no intention of attending the event but rather of reselling them at huge mark-ups and denying genuine fans the opportunity to see their heroes? This is often done using bots—web robots. They are illegal in New York and should be illegal in the United Kingdom.

Why, as we have also heard, has there been no updating of the listed events regime? With the continued changes in the way people receive television it is likely that, soon, no broadcaster will meet the current test. The listed events regime will become obsolete and we will have a free-for-all. Amendments are needed to ensure that the much-valued listed events regime remains fit for purpose.

As your Lordships Communications Committee has said, we also need a fit-for-purpose public service broadcasting prominence regime, with measures to change the rules regarding electronic programme guides. Surely we should no longer accept that, on the EPG listings of the main pay platforms, CBeebies and CBBC—with largely British-made original content—appear below listings for no fewer than 12 US cartoon channels. Similarly, the prominence rules should be developed to take account of the on-demand services from PSBs. For example, the BBC’s iPlayer should be guaranteed prominence on the first on-demand screen of any smart TV, and surely indigenous language services such as S4C and BBC Alba also need to be given greater prominence on new platforms. Yet the default on powering on the new Sky Q box is Sky’s “Top Picks”. It takes 15 clicks at present to get to BBC Alba, and PSB channels are also hard to access. As one disgruntled purchaser said,

“it’s something stupid like 7 button presses just to get the TV Guide to change channels!”.

We know why: Sky is directing viewers to its own material and away from that produced by the PSBs. Change is needed.

My noble friend Lord Lester will argue, with our support, that the Bill also provides the opportunity for Parliament to establish a set of conditions that any Government should meet when setting any future royal charter for the BBC. He will argue for statutory underpinning of the charter and will no doubt remind the Minister that such an approach is exactly the same as he recently introduced in your Lordships’ House with regard to the National Citizen Service Bill.

Despite omissions, there are many aspects of the Bill that we support. We welcome news of forthcoming amendments on, for example, e-lending. My noble friend Lord Fox will talk about broadband. We broadly support the plans for a universal service obligation, although we think the 10 megabits per second is hugely unambitious. We also support clamping down on poor service providers, an easier system of changing service provider and completing the 4G mobile rollout. However, the Minister is aware of my concern regarding poor take-up of high-speed broadband. When high-speed broadband is available, only around 30% opt for it. Unless we can improve this take-up rate, the huge benefits to individuals, businesses and the nation offered by superfast broadband will be lost. Government strategy concentrates almost exclusively on the development of superfast broadband structures. Far more needs to be done to drive up demand through skills training, marketing the benefits, addressing barriers such as cost, and by developing quality technology and content. With the welcome exception of Clause 87, the Bill is silent on all these issues. Tackling digital exclusion, not least of older and more vulnerable people, is not just a matter of structures. I hope the Minister agrees.

On these Benches we broadly support the new Electronic Communications Code, and I know from meetings with the Minister that he is now well versed in answering questions such as, “In what circumstances does a water tower or a church steeple constitute ‘land’ under the code?”. But does he agree that when code rights are granted over a piece of land, there needs to be a public record?

Rightly, there has been much debate on preventing access to pornography by under-18s. We share the Government’s objective but we have reservations about the security of data. My noble friend Lord Clement-Jones will describe how we believe it is possible to achieve the Government’s—and our—objective by using methods that anonymise the data.

We welcome bringing the maximum fine for online copyright infringement into line with that for physical copyright offences and welcome the repeal of Section 73 of the Copyright, Designs and Patents Act. Its purpose —to protect fledgling cable platforms—is no longer needed and is being used by parasitic services such as TVCatchup and FilmOn to livestream and monetise PSB content without permission. The ECJ case on this issue has rumbled on since 2007 and an update from the Minister would be helpful, but the repeal of Section 73 will provide a quicker solution.

In relation to the carriage of PSB channels on cable, a contractual agreement will be overseen by Ofcom. Does the Minister expect that such an agreement will lead to the payment of retransmission fees, and, if not, why not? There has been talk of a transitional period before the repeal of Section 73. On these Benches we believe that it should occur immediately after Royal Assent. Does the Minister share that view?

We are broadly supportive of Part 5, which deals with digital government. However, as my noble friend Lady Janke will amplify, we, like the BMA and many others, want assurances that the benefits are not to be achieved at the cost of confidentiality.

The Minister is well aware of our opposition to giving the BBC responsibility for the policy and the costs associated with free licences for the over-75s. This is a government social policy which should be determined by government and funded by government out of taxation. Although it was part of the licence fee settlement, we will still want to press on some of these issues—for example, to explore the options for the BBC to vary eligibility other than by age in Clause 77. For example, could the BBC use tax codes to ensure that those in receipt of pension credit still qualified for the concession but others paid tax on it? In such circumstances, would the Government be willing to reimburse to the BBC the tax revenues they receive?

We will also wish to explore aspects of the new powers that Ofcom has to regulate the BBC, not least in respect of distinctiveness. I know that my noble friend Lord Clement-Jones wishes to explore whether a middle way can be found in the plans to change the Ofcom appeals procedure from a merits-based to a judicial review-based system.

We have many hours of deliberation on the Bill ahead of us. I look forward to that deliberation and to the concessions that I hope we will gain from the Government.

--- Later in debate ---

[Lord Ashton of Hyde]

Yes, I quite agree—that is why I mentioned that Ofcom will provide technical details and advise on latency, upload, download and average speeds. The consultation paper is, I think, coming out at any minute.

The noble Baronesses, Lady Janke and Lady Byford, and the noble Lord, Lord Clement-Jones, asked whether there should be a social tariff in addition to the USO. Ofcom is reporting on possible approaches for a USO; the report will include consideration of measures to take account of those for whom affordability is an issue.

The Electronic Communications Code and infrastructure and apparatus and things like that were mentioned by the noble Lords, Lord Foster, Lord Aberdare, Lord Gordon and Lord Clement-Jones. In the interests of time, I am going to duck the interesting discussions of when a water tower is a communications mast and when it is apparatus. We will deal with those things a lot in Committee.

The noble Earl, Lord Lytton, was concerned about the new land valuation model in the ECC. We have consulted widely on this and employed experts to allow government to strike the right balance between landowner rights and the need for better digital communications. We expect the parties to negotiate a fair outcome. The code valuation applies only when parties cannot agree terms.

The noble Lord, Lord Foster, asked whether there should be a public record for when rights are granted over land under the ECC. The Law Commission considered this as part of its review of the code; the Government consulted on the issues subsequently and concluded that code operators should not be required to register their rights. This maintains the position under the existing code, but prospective buyers will be able to ascertain what code rights might apply to land by inspecting the land and making appropriate inquiries before the contract.

Several noble Lords, including the noble Lords, Lord Aberdare, Lord Clement-Jones, and others, talked about the change in the appeals mechanism for Ofcom. I have spent many happy hours in your Lordships’ House talking about the extent of judicial review and its applicability. We think that there is a wide consensus that reform is needed, and the Government believe that judicial review is the right remedy. Direct comparisons to other regulated sectors are helpful but, for example, where one sector has a full “on the merits” appeal, there is another example showing the opposite. This is because every regulatory regime is quite different from the next. Communications is currently the most litigated sector, and it is holding up reforms and investment and delaying consumer benefits. That is why we are forced to act—but I accept that we will probably spend some time on this issue in Committee.

Another thing that we might talk about, which was mentioned by the noble Lords, Lord Fox, Lord Mitchell and Lord Clement-Jones, was the position of Openreach. A number of noble Lords suggested that the way in which to reach a competitive and effective market in telecommunications is through the structural separation of Openreach from BT Group. Ofcom is the independent regulator for the sector and there is a process available for it to pursue structural separation, should it consider that necessary. We have made it clear that Ofcom should take whatever action it considers necessary and that structural separation remains an option.

Several noble Lords mentioned digital exclusion and digital skills. The Bill provides for free training for adults in basic digital skills, which was mentioned by many noble Lords. We have set up the Council for Digital Inclusion, which brings together leaders from business, charities and government to come up with innovative ways to help get everyone online. Some people cannot use online services independently. The Government Digital Service works with services to ensure that those people get the support that they need. More than £9.5 million has been spent by the DfE and the NHS since October 2014 to support almost 750,000 people to gain basic digital skills. The DfE will be investing a further £1.5 million in the remainder of this year to support 100,000 more.

My noble friend Lord Baker made an interesting speech, echoed to a certain extent by the noble Lord, Lord Puttnam, about the digital revolution, skills and employment. The noble Baroness, Lady Kidron, and the noble Lord, Lord Aberdare, mentioned this as well. We are establishing 15 routes to a technical education post-16, including engineering and manufacturing, digital health and construction. Students will be able to learn through an employment-based route—apprenticeships—or a college-based one that will ensure they can progress into employment or further study. For pre-16s, we will continue to equip schools to embed a knowledge-based curriculum as the cornerstone of an excellent academically rigorous education. We will continue to embed reforms to assessment and qualifications, including more robust and rigorous GCSEs, and the ambition that at least 90% of pupils in mainstream education enter GCSEs in maths and science. In 2016, 62,100 pupils entered for a computer science qualification, up from 33,500 in 2015.

Many noble Lords—the right reverend Prelate the Bishop of Chester, the noble Baronesses, Lady Howe, Lady Kidron and Lady Benjamin, the noble Lords, Lord Stevenson, Lord Storey, Lord Gordon, Lord Whitty and Lord Morrow, the noble Earl, Lord Erroll, and there may have been others—talked about and approved of the age-verification regime, at least to a certain extent. The Bill delivers on the manifesto commitment but there is always more to do and we think that is possible. I look forward to debating this in Committee. The noble Lord, Lord Stevenson, asked what oversight there will be of the BBFC to ensure that these powers are used responsibly. We are pleased that we are working with the BBFC; it has a strong track record as an independent regulator. We recognise that age verification brings challenges and we must provide the regulator with the framework to succeed. We are already working closely with it to implement this ambitious policy and it is not the case that the Government’s role will then be finalised. The Bill provides for the designation of funding of the regulator by the Secretary of State, who must be satisfied, for instance, that arrangements for appeals are being maintained. In the case of blocking, the regulator must inform the Secretary of State whenever it intends to notify an ISP.

The right reverend Prelate, the noble Baronesses, Lady Kidron and Lady Benjamin, and the noble Earl, Lord Erroll, asked a valid question about social media and Twitter. The Government believe that services, including Twitter, can be classified by regulators as ancillary service providers where they are enabling or facilitating the making available of pornographic or prohibited material. This means that they could be notified of commercial pornographers to whom they provide a service but this will not apply to material provided on a non-commercial basis.

The noble Baroness, Lady Howe, asked some very detailed questions about net neutrality and family filters which I am not going to answer today. First, I will read carefully what she said and will certainly write to her. We believe that family filters that can be turned off are permitted under EU regulation. To support providers, and for the avoidance of doubt, we will amend the Bill to confirm that providers may offer such filters. This will ensure that the current successful self-regulatory approach to family filters can continue.

ISPs are best placed to know what their customers want and we do not intend to lay down mandatory rules for family-filter provision. The current approach works well, engaging parents to think about online safety, but applying filters where parents do not engage. As far as public wi-fi is concerned, we believe that filters on many types of public wi-fi are likely to be compliant with EU regulation. Coffee shops, hotels and restaurants, for example, where the end-user is the proprietor, can turn filters on and off. I am afraid that noble Lords may not be surprised to hear that we do not think it is right to share legal advice on these matters.

There will be a lot of discussion on prohibited material in Committee. It is a complicated area. Free speech is vital but we must protect children from harm online as well as offline. We must do more to ensure that children cannot easily access sexual content which will distress them or harm their development, as has been mentioned. We do not allow children to buy pornographic material offline, and this material would not be classified for hard-copy distribution. The BBFC has a well-understood harm test and would not classify material that, for example, depicts non-consensual violent abuse against women, and it may not classify material which is in breach of the Obscene Publications Act, as clarified in guidance by the CPS. Prohibited material has always been within the regulatory framework of this Bill. We consider that having a lesser regime for prohibited material than lawful material would be unsustainable and undermine the age-verification regime. As I say, I am sure we will come back to this in Committee.

An important point was made with regard to sexual content and the need to look at sex education. We have taken steps to raise awareness of the risk to young people of exposure to harmful content online. E-safety is now covered at all key stages in the new computing curriculum, which was taught for the first time in September 2014. The Government agree that we need to look again at the case for further action on personal, social, health and economic education and sex education provision as a matter of priority, with particular consideration being given to improving quality and accessibility. We are carefully considering the request to update existing sex and relationship guidance.

Many have asked for the intellectual property reforms in the Bill for many years. We need to ensure that valuable assets are protected. My noble friend Lady Neville-Rolfe has been working hard to ensure that that is the case. I am grateful to my noble friend Lord Grade, the noble Lords, Lord Storey and Lord Macdonald, and my noble friend Lady Wilcox, who supported the Section 73 appeal. My noble friend Lady Wilcox asked what else we are doing to protect IP rights online. The Government’s strategy for IP enforcement published earlier this year, Protecting Creativity, Supporting Innovation: IP Enforcement 2020, outlines the breadth of activity the Government are taking to tackle IP infringement of all types online.

As regards the remuneration issue from the abolition of Section 73, the Government are not seeking to set any retransmission fee arrangements. These will be negotiated in the context of the existing “must offer/must carry” regulatory framework. This will mean there is likely to be some, albeit limited, value extracted in any future negotiations between public service broadcasters and Virgin Media. Coming to the—

[Lord Foster of Bath]

I am grateful to the Minister for giving way as it is late but this is a very important issue. I would be grateful for greater clarification of the Government’s position, bearing in mind that it was only in July of this year that, in responding to the balance of payments consultation, the Government said:

“Government therefore expects that there will continue to be no net payments between all platform operators and the PSBs”.

Has the Government’s position now changed?

[Lord Ashton of Hyde]

We think it should be left to the market to decide that. My noble friend Lord Grade and the noble Lords, Lord Foster, Lord Storey and Lord Macdonald, and probably others talked about the length of the transitional arrangements, and basically said that we should get on with it. The Intellectual Property Office has recently consulted on this, as is right and proper. The Government are considering the responses received and we will state our intentions on how this reform will be implemented shortly.

The noble Baroness, Lady Janke, asked about counterfeit electrical goods. The Government have committed in their recent IP enforcement strategy to develop a methodology for assessing the availability of and harm caused by counterfeits, which will of course include counterfeit electrical goods. Government officials regularly meet with major online retailers to help reduce the availability of counterfeits on their platforms and to help co-ordinate efforts with law enforcement to take action against sellers. In addition, as required by EU law, most online platforms already have routes to allow suspected IP-infringing content to be reported and promptly removed.

Data sharing is an important part of the Bill. The noble Baroness, Lady Janke, and the noble Lord, Lord Clement-Jones, expressed concern about bulk data sharing. Under the powers, data sharing must comply with the Data Protection Act. Information can be shared only for the specific purposes set out in the Bill, and only the minimum data required to achieve these purposes will be shared—a point reinforced in our draft codes of practice.

The noble Baroness, Lady Kidron, asked whether data would be shared without consent. Where possible, consent will be sought, but this is not always possible. These new powers are to allow government to reach out and help. We have given examples of reaching out to the fuel poor and to the vulnerable so that help and support can be offered rather than sought. These people may not have consented to data sharing, but that is partly because we often never know when we might need to help in future. We will, where appropriate, conduct privacy assessments and publish them, and we will always protect personal data under the Data Protection Act.

Several noble Lords raised the question of health data. As noble Lords appreciate, health data are of great value to research, as they address multiple complex issues that affect individuals, households and other purposes. However, great sensitivities are involved in how this is handled, which is why we are excluding the use of health and adult social care data from our powers until the recommendations of the National Data Guardian’s review have been implemented and public confidence in the way the health and care system uses confidential personal data can be demonstrated. I should mention that the Government support Jo Churchill MP’s Bill on the National Data Guardian, which has its Second Reading on Friday.

The BBC is an important part of the Bill and we have debated this as part of official business 18 times since last June—and I suspect we may do so again. When we scrutinised the new charter on 12 October, there was a consensus that enormous progress had been made. The charter has now been approved by Her Majesty the Queen and will soon be in force. The noble Lords, Lord Lester and Lord Stevenson, the noble Baroness, Lady Kidron, and the noble Viscount, Lord Colville, talked about the budget deal last year. This was part of a negotiation with the BBC that is complete. The BBC said only two weeks ago that,

“the overall funding settlement reached with the government provides the financial stability for a strong creative BBC”.

The BBC is clear that reopening the settlement would just create uncertainty and potentially leave it worse off.

With regard to the future process, let me be clear. The charter, for the first time, sets the timing for the BBC’s future financial settlements at once every five years. The charter also requires the BBC to provide data ahead of each licence fee settlement. The BBC will be able to use this to make its case, and the Government of the day will be able to consider that.

The noble Lords, Lord Lester and Lord Foster, mentioned the National Citizen Service charter. I agree that that was a royal charter and that it had a Bill, but we think that is different. I could go into the reasons, but undoubtedly we will talk about that in Committee, so I will not do so at this time.

Digital Economy Bill

Lord Foster of Bath Excerpts

Committee: 1st sitting (Hansard - continued): House of Lords
Tuesday 31st January 2017 Lords Chamber

Ofcom has until now had very little involvement with the Electronic Communications Code beyond its light-touch licensing regime to approve code operators, with no apparent subsequent monitoring of conditions, such as operators’ provision for decommissioning apparatus. It is now being given a serious role in regulating matters where site providers and infrastructure providers should also be treated equitably. Yet historically, Ofcom has had duties only to the operator. This is important. Amendment 43 extends explicitly the range of people it should consult. I beg to move.

[Lord Foster of Bath (LD)]

My Lords, I have been a Member of your Lordships’ House for just 14 months, so I am relatively new. That probably explains my confusion as to what exactly happened to the previous string of amendments. I look forward to the Minister’s response to them, even though they appear to have been withdrawn at a later stage—but I am sure it is all very simple.

Another surprise is that I never thought I would hear a debate in which a spokesman on the Front Bench, in this case the noble Lord, Lord Grantchester, would appear to be singing the tune of the Country Landowners’ Association. I say openly to the Minister that, on these Benches, we are broadly supportive of the new Electronic Communications Code. The noble Lord, Lord Grantchester, is absolutely right to ask a number of questions about some of the details of it, and concerns have been raised about some aspects by a number of organisations. However, we believe it is vital that the new code is brought in quickly, because we want to see an expansion of the infrastructure that will enable us to deliver the increased connectivity that this country desperately needs.

I do not want to go through all the amendments in this group in the way that the noble Lord, Lord Grantchester, did. We look forward to the Minister going through them—and the previous ones—in a few minutes. However, I want to pick up one amendment. It is probably the one that has most surprised me—the lead amendment in this group, Amendment 26. The noble Lord, Lord Grantchester, acknowledged that this was a probing amendment. But, at the same time, he made it fairly clear that he was quite supportive of what was contained within it.

On these Benches, we believe that independent wireless infrastructure providers have benefited this country enormously by investing in the development of alternative structures—water towers, pylons and so on—to make them some of the most productive telecommunications facilities in the country and improve connectivity, not least in rural areas. Our real concern about Amendment 26 is that, if accepted, it could alter investment planning by independent infrastructure providers in a way that would curtail much of the development we want to see.

I believe the issue raised in Amendment 26 was adequately addressed in a letter that the Minister sent to many of us some time ago. For the benefit of Members who do not have the letter in front of them, he said:

“Code rights can only be obtained to install apparatus on, under or over land. Where operators have invested significantly in the physical apparatus that underpins coverage they should be able to achieve appropriate commercial returns. Alternative structures that have been adapted for the purpose of delivering network coverage are essential to connectivity and there will be cases where code rights do not apply”.


He said that questions had been asked,

“about whether code rights apply to various structures such as church steeples and water towers”—

and so on. But he goes on to make it very clear when he states:

“Whether a water tower has been adapted to the extent to which it can be considered to be electronic communications apparatus will depend on the specific circumstances of the adaptation … We have established a clear and robust legal framework within which parties can resolve matters by agreement and if necessary apply to courts to resolve any disagreements”.


That is very clear—we want to protect these sorts of developments because we do not want to attack the investment that we hope will be made in the future.

That position is exactly the same as the one taken by the Labour Party Front Bench when this issue was debated in another place. Louise Haigh said:

“We would also like to explore what consideration has been given to how we can ensure that independently-owned infrastructure can have a significant role in the sector and, if possible, make up a larger proportion of our infrastructure in line with the global market. The much-discussed difficulties of the broadband roll-out highlight the issues when infrastructure is owned by a private monopoly. We should seek to break up this market as much as possible. For that to happen, investment incentives for independent infrastructure need to be maintained”.—[Official Report, Commons, Digital Economy Bill Committee, 20/10/16; col. 165.]


I entirely agree with the Front Bench of the Labour Party in another place on this issue—but I confess that I am concerned and confused by the Labour Party Front Bench in this House. I look forward to hearing where the Minister stands on this.

Perhaps I may give the Minister notice that, having said that we are very supportive, on the next group of amendments we may have a slight disagreement—but we will have that debate a little later this evening.

[The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord Ashton of Hyde) (Con)]

My Lords, perhaps I can clear up one thing for the noble Lord. I have not been in this House much longer than he has but I was in the Whips’ Office for two years and I have a vague understanding of what is going on. The noble Lord, Lord Foster, obviously missed my thrilling answer on the last group but I responded to it and the House resumed before the Deputy Chairman called the amendment. Therefore, the amendments in that group were dealt with and we resumed the Committee stage of the Bill with the Front Bench withdrawing their amendment. That got us back to where we should be, which is with this group. Therefore, I think that everything is in order.

Amendment 26 seeks to alter the definition of electronic communications apparatus. I too was rather surprised by some of the things that the noble Lord, Lord Grantchester, said. I shall try to explain where we are on this subject, although I think that the noble Lord, Lord Foster, made my case for me. This is a fairly interesting proposal. I will take a look at what the noble Lord, Lord Grantchester, said in the cold light of day and we will obviously have discussions about it if necessary. I accept that he has made a long case, but I cannot answer it in complete detail today.

We have had many meetings with noble Lords on this subject and we have discussed whether various edifices such as water towers are apparatus. The Government are clear that the code should not interfere with incentives to invest in infrastructure. The reformed code makes a clear distinction between land and apparatus, and an operator cannot exercise code rights against another’s infrastructure. A building used solely for enclosing apparatus is appropriately defined as apparatus. This might include a small brick-built cabin that was part of a site. Permitting operators to secure compulsory access to such a building could encourage one operator to exploit another’s existing investments, and this would naturally create disincentives for future investments in digital communications infrastructure. Here, I agree with the noble Lord, Lord Foster.

Equally, a range of structures are adapted for use in providing a digital communications network. Whether a structure has been adapted so as to make the entire structure “apparatus”—rather than only part or none of it—is a question of fact and degree, having regard to what the parties have agreed, the nature of the installation and the extent of the adaption, as outlined in my letter. These are fact-sensitive questions that should be the proper subject of agreements and, if necessary, determination by the courts or tribunals. As such, I do not consider the amendment to be appropriate or necessary.

Amendment 29 seeks to do two things. It would ensure, first, that the assignor remains liable to the landowner and, secondly, that the assignee does not have the benefit of the assignment unless the landowner is given notice of it. We want to ensure flexibility for operators and continuity of service for consumers when companies go through mergers or restructuring. This amendment would frustrate that objective, which was based on the Law Commission’s recommendation that code agreements can be freely assigned. Further, the additional protection the amendment seeks to give the landowner is unnecessary: if no notice of assignment is given, the current drafting means that both the assignor and the assignee are liable to the landowner under the terms of the agreement, which is a substantial protection.

--- Later in debate ---

Moved by

[Lord Foster of Bath]

27: Schedule 1, page 95, line 34, at end insert—
“(e) must be notified to Land Registry, Registers of Scotland or Land and Property Services, whichever is appropriate.”

[Lord Foster of Bath]

My Lords, the Minister will be aware that at Second Reading I argued that there should be a public record kept of when rights over land are granted under the Electronic Communications Code. The Minister said that he was not minded to do that. He told me that,

“prospective buyers will be able to ascertain what code rights might apply to land by inspecting the land”.

If I went to see a field or a piece of land that I owned and saw nothing on it, it would not mean that there were no fibre-optic cables underneath it, and I am not sure how I would find that out by inspection. He gave me another option of,

“making appropriate inquiries before the contract”.

If I have a piece of land with nothing apparently on it, I have absolutely no idea of to whom I would start making those inquiries. Perhaps the Minister can assist me. He also said—presumably it was the basis of his reply—that the Law Commission had considered this issue, and as a result the Government were going to stay where they were, maintaining,

“the position under the existing code”.—[Official Report, 13/12/16; col. 1226.]

I therefore thought it would be a good idea if I looked at what the Law Commission said about this matter and the existing code. It said in its report:

“Paragraph 2(7) of the 2003 Code states:


‘It is hereby declared that a right falling within sub-paragraph (1) above is not subject to the provisions of any enactment requirement the registration of interests in, charges on or other obligations affecting land’”.


That is what is to be continued, according to the Minister, in the new arrangements. Yet the Law Commission said of this:

“It is not clear what this means”,


and that:

“RICS noted that: ‘the current situation, whereby Code Operators are unsure as to the correct interpretation of paragraph 2(7) of the Code, has led to some Code Operators registering their legal agreements and others deciding not to do so’”.


Following that, the Law Commission proposed a significant change to the arrangements. That appears in paragraph 2.116 of its report. In coming to that conclusion, it noted that some organisations proposed that we change the situation. For instance, Mobile Phone Masts Development Ltd said:

“There is no reason why rights created or granted should be exempt from the LRA 2002”—


the Land Registration Act 2002—and that:

“It is in the public interest for the rights/obligations to be recorded on the register”.


Some, including the Agricultural Law Association, took the view that it should go even further and that some things that currently would not be covered under the code should also be covered by land registration. Others, as the Law Commission pointed out, had a completely opposite view. The Country Land and Business Association, to which I referred earlier, and BT,

“suggested that a requirement to register would place an unwelcome administrative burden on Code Operators”.

I can see that the Minister was in a difficult position because some people wanted one thing and some wanted the other, but his solution has landed us back at the very thing that currently exists, of which the Law Commission says:

“It is not clear what this means”,


and which others say is a confused situation. In that difficult position, the Minister would no doubt look to the Law Commission’s final conclusions. I shall read two of them out and ask the Minister to tell me which of them will be registered in the Land Registry and which will not, and why he will not support my simple amendment, which would require that all rights conferred through the ECC be registered in the relevant Land Registry, depending on the system the devolved Administrations have.

The two recommendations from the Law Commission are, first:

“We recommend that where Code Rights are conferred by a lease, the revised Code should make no special provision as to who should be bound by the lease and its provisions, and should not amend or disapply the normal rules of land registration”;


and, secondly:

“We recommend that where Code Rights are conferred otherwise than in a lease, the revised Code should provide for them to bind successors in title to the Site Provider who granted them, and those with an interest subsequently derived from the title of the Site Provider, as if they were property rights”.


Can the Minister tell me which of those two should be registered and why we should not just register all of them for simplicity?

[Lord Ashton of Hyde]

My Lords, I start with the noble Lord’s test of which of the two should be registered. The answer is none because we do not think we should have registration of these rights. However, I accept that there are many issues about the Law Commission, which I will investigate and come back to him because I do not have all the answers at the moment. I am not by that guaranteeing that we will accept the amendment but I accept that he has made some points that deserve a closer look before Report.

The amendment proposes to include a requirement for code agreements to be notified to the Land Registry. The noble Lord will not be surprised to know that we have not changed our opinion on this. We held a consultation on the code in February 2015 and one of the issues consulted on was land registration. We concluded then that code rights should not be subject to a requirement that they are registered. This reflects the position under the existing code, which the noble Lord mentioned, which has worked effectively since 1984 and avoids creating unnecessary administrative burden.

When buying land it is usual to inspect the physical property and to make inquiries before contract to establish what burdens may be on the land that are not registered rights. These include standard checks by purchasers and conveyancers which should identify whether there are any existing code rights over the property, in the same way that when a property is bought in other circumstances the onus is on the seller to inform, and that becomes part of the contract.

However, as I have said, I accept that the noble Lord has made extra points about the Law Commission and so, on the basis that I will look at those before Report, I hope he will be able to withdraw his amendment.

[Lord Foster of Bath]

I am grateful to the Minister for his helpful reply that he will look at the matter further. With that assurance, I beg leave to withdraw the amendment.

Amendment 27 withdrawn.

Digital Economy Bill

Lord Foster of Bath Excerpts

Committee: 2nd sitting (Hansard - continued): House of Lords
Thursday 2nd February 2017 Lords Chamber

[Lord Gordon of Strathblane]

Very briefly and anecdotally, I had a briefing session with Sky and the Motion Picture Association and, as somebody who is in the wrong age group for being able to use these kinds of things, I was absolutely appalled at how easy it is to get hold of a pirated film. I agree with the wording of the amendments; they are sufficiently vague that they will, hopefully, future-proof us. If they were too detailed, we would run the risk of having something that the criminal classes would find it all too easy to evade. I urge the Minister to give this consideration.

[Lord Foster of Bath (LD)]

My Lords, I, too, will be brief, but I think it is important that we keep pointing out the number of problems that are currently not being addressed. My noble friend Lord Clement-Jones has given some figures, as have the noble Baroness, Lady Kidron, and others, but it is worth recalling, for example, that in the second quarter of 2016 alone, no fewer than 51 million pieces of film and TV content were accessed illegally online, according to the Intellectual Property Office.

The case has already been made that this is damaging very seriously the commercial ability of the legal providers of content. We know from another survey that one in five people who are using this illegal approach has now either completely cancelled or cut down their subscription to legal platforms. As has been pointed out, any attempt at enforcement has so far found itself in difficulty because of the inadequacy of the existing legislation—hence the call in both Amendments 71B and 79A that we put in place a fit and proper enforcement regime and definitions of specific offences.

The noble Lord pointed to the briefing he had from Sky—and no doubt he will have heard from Sky about the number of times that it has been able to identify illegal activity going on, whether it is with local trading standards or the Police Intellectual Property Crime Unit, but has had difficulty taking prosecutions through to the final stages. People have got away when perhaps, if we had had fit and proper legislation as is being proposed here, that would not have been the case.

Sky gave one example:

“Following an investigation … where live sport was being streamed and made available on IPTV boxes via two websites, a referral was made to PIPCU in September 2014. Search and seizures were made in July 2015 … the pirate was remanded in custody, he was later released following an appeal. Two years later, the pirate has re-opened his site with the same name but moved from .net to .biz with the Crown Prosecution Service still considering”—


how it might go about prosecution. It is for this sort of reason that we need these amendments, or something like them.

[Baroness Buscombe (Con)]

My Lords, Amendments 71B and 79A seek to expand the existing criminal liability for making or dealing with copyright-infringing articles and the restrictions on unlawful decoders to include the supply of devices and software—such as set-top boxes or IPTV boxes and illicit software apps or extensions—intended to be used for copyright infringement.

An amendment with the same or a similar ambition was first tabled in the other place and then withdrawn. The Government are still of the view, as they were then, that illicit streaming and the infrastructure and devices that enable it pose a very serious threat to legitimate copyright owners and service providers. We share the wish of those behind these amendments to ensure that this harmful activity is properly tackled. I agree with the noble Lord, Lord Clement-Jones, that this poses a real threat to the creative industries.

That does not mean, however, that we should jump immediately to introduce new criminal provisions to copyright law. As previously discussed in debate in another place, the Government believe that this activity is already covered by existing offences. Relevant provisions include those contained in the Fraud Act 2006, the inchoate offences in the Serious Crime Act 2007, and other provisions of the Copyright, Designs and Patents Act 1988.

In December a supplier of IPTV systems that enabled viewers to watch unauthorised content was convicted for conspiracy to defraud and sentenced to four years’ imprisonment. A second supplier received a two-year suspended sentence. This conviction shows that the courts agree that this behaviour is already illegal and must be tackled appropriately. But we recognise that court cases take time and cost money, and that this is a complex area of law where enforcement agencies may not feel well equipped to take on investigations and carry them through to prosecution. That is why we are working on a range of interventions to tackle this behaviour.

Officials at the Intellectual Property Office are working with the Crown Prosecution Service and the police to develop guidance on how the existing offences may be effectively applied, and we will be running a public call for views over the coming few weeks to ask investigators, prosecutors and industry representatives whether they think the existing legislation is providing all the tools that are needed.

IPO officials have also been meeting intermediaries, especially those platforms where these devices are sold, and others whose legitimate businesses facilitate, however unknowingly or unwillingly, this criminal behaviour. We need to work together with a broad coalition to tackle illicit streaming, and everyone in the supply chain has a part to play. This is very much an area where we want to make progress. We believe that we are making progress on a number of fronts. The Minister for Digital and Culture committed in the other place to bring forward legislation if the evidence shows that it is needed—but that case has not been made yet.

With reference to what the noble Lord, Lord Gordon of Strathblane, said, I think it is right to emphasise that the ever-changing nature of how criminals operate means that they will quickly circumvent technology-specific legislation. We have to be careful when we talk about primary legislation. The changing way in which content is consumed means that specific legislation such as that proposed may be rendered obsolete, unprosecutable or both. I hope that with this explanation, the noble Lord will feel able to withdraw the amendment.

Digital Economy Bill

Lord Foster of Bath Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Monday 6th February 2017 Lords Chamber

Moved by

[Lord Foster of Bath]

77: After Clause 29, insert the following new Clause—
“Copyright and the role of active hosts
(1) The Electronic Commerce (EC Directive) Regulations 2002 are amended as follows.(2) At the end of Regulation 19 insert—“(2) Where an information society service is storing and providing access to the public copyright protected works, and is playing an active role, including the promotion and optimising the presentation of those works, sub-paragraph (1) shall not apply.(3) The service provider of an active host under sub-paragraph (2) is required to secure licensing agreements with rightsholders.””

[Lord Foster of Bath (LD)]

My Lords, in moving Amendment 77, I shall speak briefly to Amendment 79. Amendment 77 probes the Government’s intentions with regard to the recent proposals for an EU directive on copyright in the digital single market. The amendment would clarify that the hosting defence contained within paragraph 19 of the Electronic Commerce (EC Directive) Regulations 2002 does not apply to digital services that play an active role in the provision of online content, specifically those user upload services that optimise the presentation and promotion of copyright-protected works. The amendment would require those services to secure licensing agreements with rights holders.

To explain in more detail, many services are passive hosts, which are defined in EU law as those that provide a,

“technical process of operating and giving access to a communication network over which information made available by third parties is transmitted or temporarily stored, for the sole purpose of making the transmission more efficient”.

Examples would include internet service providers such as BT, TalkTalk or Virgin, cloud locker services such as Dropbox, Microsoft’s One Drive or Google Drive, and online bulletin boards such as HootBoard or MyBB. Services such as these are accepted as essential to the operation of the digital market and so quite reasonably have what is called “safe harbour protection”—that is, a limitation of their copyright liability on the basis that they have no knowledge of copyright infringement. On the other hand, there are sites that also give access to works made available by third parties, but actively provide functionality that promotes works, makes recommendations and optimises the upload for the purpose of presentation. It is this functionality that provides users with the ability to find what they want when they want it. These are active hosts. They directly compete with licensed providers. Examples include Facebook, YouTube, Dailymotion, Bandcamp, Vimeo and Metacafe. They should not have safe harbour protection and should be required to secure licencing agreements with rights holders.

Therefore, while there was, and in some areas continues to be, justification for exemptions for passive hosts, like all exemptions they must reflect the balance between the rights of rights holders and users. There is a strong argument that the existing provisions are not sufficiently defined and as a result are open to deliberate misinterpretation. This means that some services can use copyright-protected content to build their businesses without fairly remunerating rights holders. UK Music’s recent report Measuring Music highlighted that the user-uploaded service YouTube, the most frequently used global streaming platform and one that currently benefits from the safe harbour provisions, increased its payments to music rights holders by only 11% in 2015 despite consumption of the service growing by 132%. This further underlines what is called in the trade the “value gap”. The current legal ambiguity and imbalance has created distortions in the digital market with services like YouTube benefiting from these exemptions whereas Apple Music and Spotify, providing similar services, do not. The growing significance of the music streaming market must not go unremarked. Over a four-year period, the UK music industry has grown by 17%, and during the same period, there has been a massive shift from consumers owning music to streaming it. The value of subscription streaming services jumped from £168 million in 2014 to £251 million in 2015.

There has been a number of legal cases seeking to clarify the situation. In 2011, in the L’Oréal v eBay case, the Court of Justice of the European Union held that online marketplaces cannot benefit from the hosting exemption where they play an active role, for example by promoting and optimising content. This amendment seeks merely to clarify what should already apply in the law right across the EU, including in this country. However, some services are still arguing that they are not active hosts, and as a result, avoid licences or are underlicensed, hence the need for the clarification that may be provided by this probing amendment.

There is another reason why we need greater clarity from the Government. Initially, the Government made it clear that they believed:

“Clarification of terms used in the Directive would, we believe, help to address … concerns”,


about the active/passive host issues. However, in a letter to the EU institutions in April last year, the then intellectual property Minister, the noble Baroness, Lady Neville-Rolfe, argued in relation to digital services that,

“we should avoid introducing legislation that might act as a barrier to the development of new digital business models and create obstacles to entry and growth in the European digital market”.

This probing amendment seeks to ensure that that sort of view does not preclude strong and robust positions being taken in support of safe harbour clarification. The proposals in the draft EU directive in this regard are welcome, and we ask that the UK Government continue to support the clarification in the law that the draft directive seeks and that they continue to engage in this important process.

The referendum result and the path towards Brexit raise many issues in relation to these proposals. It is highly conceivable that we will be Brexiting at the very time that Europe begins to adopt copyright rules for the digital age, so an opportunity to clarify UK law will be lost as a consequence of other factors. It is therefore necessary to consider how we can take this opportunity of having a Digital Economy Bill to safeguard these important principles once we leave the European Union. I hope very much that the Minister will confirm that the Government are committed to implementing the draft directive, and Article 13 and Recital 38, into UK law, if they are not implemented by the point that we leave the European Union. Finally, I am well aware that the Government have been consulting stakeholders on these issues. I hope we get a commitment from the Government to publish the consultation and that the new IP Minister, Jo Johnson, will commit to a meeting with representatives of the music industry and others to discuss these issues.

Briefly, we on these Benches fully support Amendment 79 in the name of the noble Lord, Lord Stevenson, which my noble friend Lord Clement-Jones and I have also signed. I have no intention of stealing the thunder of the noble Lord, Lord Stevenson, and will leave him to explain the importance of the amendment, which seeks simply to help the Government achieve their own manifesto commitment to reduce copyright infringement and ensure that search engines do not link to the most offending sites.

I will say merely that the Government have already hosted a number of round tables to seek ways forward, and some sources are telling us that a voluntary agreement for a code of practice is close to finalisation. If that is true then I am delighted to hear it, but this amendment would not preclude a voluntary agreement. Already many have argued to us that tabling the amendment may have helped to speed up the process towards a voluntary agreement with teeth, but the amendment would not do anything other than ensure that we had a backstop mechanism in the event of a failure to get a voluntary agreement or if the voluntary agreement fails. I hope that on that basis Amendment 79 will also be considered seriously by the Government.

--- Later in debate ---

[Baroness Buscombe]

My Lords, on Amendment 77, over recent years the UK has made great strides in the enforcement of intellectual property, and we are now judged to have one of the best IP enforcement regimes in the world. This is definitely a position that we are keen to maintain, and the Bill sends a clear signal that the Government believe copyright infringement is a serious matter, irrespective of whether it is online or offline. This includes measures to increase the penalty for online copyright infringement from two years to 10 years. We understand that there are concerns in the music industry particularly that online intermediaries need to do more to share revenues fairly with creators, which the amendment seeks to tackle. However, we need to find balanced solutions that provide clarity without undermining basic freedoms or inhibiting the development of innovative digital models.

As the e-commerce directive is EU single-market legislation in origin, we will in effect have to wait until after we exit the EU and then possibly initiate a debate as to whether this regime, or indeed the e-commerce regulations as a whole, is still fit for purpose. We are also wary of making piecemeal changes to this important regime that has helped to foster the development of online services and has been helpful to the development of the UK’s burgeoning tech sector without a proper debate involving all parties.

That said, the current law, including the exemptions from liability, has fostered an open and innovative internet, giving online services the legal certainty required to start up and flourish. This has been good for creators, rights holders, internet businesses and consumers alike. Platforms, like all businesses, have a role to play in helping to remove copyright-infringing material, and there is no place for a system that encourages copyright infringement online. However, the UK Government are fully committed to ensuring that our creative industries receive fair remuneration for their work. We want to see creators remunerated fairly, while encouraging investment in new content and innovative services. We will carry forward these principles when engaging at policy level with the EU while considering our own UK-based solutions.

The Government are clear that we must maintain our rights and obligations as members of the EU until we leave. That means that we carry on making arguments within the EU concerning our preferences for EU law. Once we leave the EU, we may choose to reconsider a range of issues, including the limited liability regime, but for now, government policy remains unchanged. The European Commission has recently published a series of copyright proposals in that area, and we are in the process of carefully considering those proposals. While we remain a member of the EU, we will continue to engage with policy development in this space, alongside considering the development of our own copyright framework.

Amendment 79 would mean that the Government take a power to impose a code of practice on search engines, to dictate how they should work to prevent copyright infringement. The return of that suggestion, which was also discussed in another place, gives me an opportunity to update noble Lords on progress in this important area. Since the idea was last discussed in the other place, IPO officials have chaired a further round-table meeting between search engines and representatives of the creative industries. While there are still elements of detail to be settled, the group is now agreed on the key content of the code and I expect an agreement to be reached very soon. All parties have also agreed that the code should take effect, and the targets in it be reached, by 1 June this year. The search engines involved in this work have been very co-operative, making changes to their algorithms and processes, but also working bilaterally with creative industry representatives to explore the options for new interventions, and how existing processes might be streamlined. I understand that all parties are keen to finalise and sign up to the voluntary agreement, and so we believe there is no need to take a legislative power at this time.

Surely it is better to act on a co-operative basis now, and start tackling this serious issue right away. If, however, a voluntary deal cannot be achieved, we will re-evaluate our options. I hope therefore that the noble Lord is reassured, and feels able to withdraw the amendment.

[Lord Foster of Bath]

My Lords, I thank the Minister for her response. On the second amendment, my concern is that although she is optimistic that we will have a robust agreement in place, if that does not happen—or if the agreement breaks down at a future date, for whatever reason—she has said merely that the Government will re-evaluate their position. She will be as aware as I am of the difficulty of bringing new legislation before your Lordships’ House to address any decision they might make at this time. The amendment would provide that backstop mechanism if it is needed in the long run, which is why I hope we will have an opportunity to discuss that at further stages of the Bill.

On the first amendment, the Minister has not been able to reassure me that the Government are committed to introducing appropriate legislation if the EU legislation has not been finalised at the time we leave the European Union. I hope therefore that we will have an opportunity to discuss that matter in more detail on a future occasion. For the time being, however, with an opportunity for us to reflect on what the Minister has said, I beg leave to withdraw the amendment.

Amendment 77 withdrawn.

Digital Economy Bill

Lord Foster of Bath Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I was slightly surprised at the way the Minister rebuffed concerns about the way in which Parliament engaged with the royal charter process last time. It might be because he joined us halfway through, to a little bit of shock but quite a lot of pleasure. Looking back on it, I do not think it can be said that Parliament was as engaged as it wished to be in the process. The ability to speak on two occasions when Statements were graciously made by Ministers, and to speak in one debate focusing, at that stage, on the draft charter, with the agreement as yet not finalised, can hardly be described as participating actively in the process. I think we can agree to differ on that point. I am sure that noble Lords who spoke in the earlier debate had a very different version of how that might have gone, including involvement by Select Committees and involvement in the detail, which would have resulted in proper and effective scrutiny of the Government’s proposals and the eventual outcome.

This amendment, by serendipity, actually deals with some of the fall-out of the rather deficient process we are going through. When charters are drafted, considered and debated, they are never alone: there are lots of other things going on. Many people present will be able to give witness to that effect. One of the things that sometimes gets missed out is the detail in the agreement. The agreement, of course, is really the mechanics of how the arrangement between the Government and the BBC works in practice. One was brought in in such a way and at such a time that it was never discussed in your Lordships’ House or in the other place. It only really became an issue once the charter was about to be sealed. The issue was the changes to the way national radio output was to be operated in future, which were being imposed on—although not necessarily resisted by—BBC management. That is the subject of this amendment.

Amendment 222E is a probing amendment, asking the Government to conduct a review of an important sector of the creative economy. It does not specifically relate to the BBC—although it is cued into something that is happening there—but it would provide useful information and detail that would be of interest to the Committee. If the review were carried out in the way I suggest, with a report covering a range of topics related to radio production, I hope it could be brought to your Lordships’ House and generate a good discussion.

In short, about 60% of BBC national radio output is going to be put out to competitive tender over the next few years, to 2020. Over the past 20 years, BBC radio has actually increased its external commissioning from zero to around 20% of output. That is quite a slow rate of progress, but that is not unconnected with the fact that we are talking about a very fragile sector of the creative industries. Radio production does not involve a very large group of people. The independents are usually quite small and not in the habit of operating on a scale that would enable them to take over the huge increase in the proportion of radio that we are talking about.

The proposal would mean an extra 3,000 hours of national radio output being put out to tender every year. That, of course, does not come free of charge, but with the cost of a commissioning process in-house at the BBC. Therefore, it is not all a one-way process: there will be additional costs. Those costs will not be funded by any additional funding from the licence fee or any other process, so there is bound to be a squeezing of radio budgets, and neither external nor in-house producers will be able to rely on getting any increase. It is going to be a rather difficult situation, affecting the people involved. Current in-house BBC radio producers will find that their jobs are largely going to disappear, because, although a significant number of programmes will be retained in-house, the 60% figure means that the majority will be produced externally.

The question of how the BBC will continue to operate as a major trainer in this area must be raised, because without the numbers, that training might well be at risk. Who else is going to do the training to ensure that radio has a flow of qualified people coming forward? Smaller independent production companies might not be able to scale up either quickly enough or with sufficient range to compete against those that will, perhaps, sweep the pool.

This is a really big change in an important part of our national life—a real adjustment—and it has not been given sufficient scrutiny. Given that it was not discussed in Parliament as far as I am aware and was hardly raised externally, the Government have a duty to think harder about the issues arising. The allegation was made that this proposal did not emerge from any consideration of the needs and purposes of BBC radio production, or indeed the independent radio production sector. In meetings I had with those involved, I was told that the ask for the independent sector was to get from the current 20% of output to 25% by 2020—in other words, a marginal increase on the existing arrangements. To go from 20% to 60% reflects what I think must have been external pressures. That rather makes the point that we need to know more about what is going on, and transparency would help.

The main purpose of the amendment is to focus on the situation that will emerge after 60% of national radio output is put out to competitive tender, and the benefits that will flow from that. I beg to move.

[Lord Foster of Bath (LD)]

My Lords, I have much sympathy with the amendment moved by the noble Lord, Lord Stevenson, although I have some disagreements with it as well, which I will come to. As the noble Lord said, the new charter obligation commits the BBC to extending competition for radio production. It was my understanding that that proposal came directly from the BBC—that it was not, as the noble Lord suggested, imposed on but not necessarily resisted by BBC management. As he said, it may or may not have been rather more than the independent radio producers were expecting or had requested. The Committee would benefit from hearing from the Minister a little about the background to this part of the charter and agreement.

What is clear is that it has been agreed that from April 2017, over a six-year period, the BBC will open up 60% of relevant hours—that is non-news, news-related current affairs or repeats—to competition both from in-house and indie producers. That represents about 27,000 hours of programming per year being open to competition. Although it will not go as far as what is happening in television, it is a further development of the process that began right back in 1992, when the BBC voluntarily made 10% available to independent production. That has developed over a number of years. The 10% voluntary figure was made compulsory, we then saw further developments and eventually the “compete and compare” framework was introduced, designed to drive up standards, reduce costs and ensure continuous improvement in all areas of operation.

Of course, the 60% available for competition does not guarantee the independent sector extra commissions. Independent companies will obviously have to have sufficiently good ideas and be able to demonstrate a track record of producing sufficiently high-quality content. The independent sector, of about 150 relatively small companies spread right across the country, has a growing track record of producing high-quality content and helping to increase the range and diversity of content available to BBC radio services. They produce some great programmes that win awards, and since the guide price for radio production is the same for both in-house and external producers, there is no increase in the production cost to the BBC.

It is good to hear that the independent sector is increasingly involved in training the next generation of producers through training programmes and mentoring schemes, helping to improve diversity: around 60% of learners are women, 15% are from BAME backgrounds, and 5% are people with a disability. But we have to be alert, as the noble Lord, Lord Stevenson, suggested, to the impact these changes may have on the BBC and its own staff. They will certainly need increased levels of training and skills to negotiate, so that they can compete on a level playing field with the independents.

The review that is called for in the amendment is of course sensible, but we question whether it should take place quite as early in the process as recommended by the noble Lord, Lord Stevenson. The 60% target for competition does not come into full effect until the end of 2022, which should provide the independent sector with plenty of time to develop the scale and expertise to pitch to make more programmes. It also allows time for the BBC to retrain and restructure. But the BBC acknowledges that while greater competition should deliver greater efficiency in programme costs, increasing the number of commissions open to competition threefold will require a larger in-house commissioning team, and there is already a potential impact on other in-house staff. I understand that the BBC is already in discussions with staff and trade unions about that.

It would make sense to have a review, but it should perhaps take place at the midway point between Royal Assent and 31 December 2020. If we are to have such a review, we need to look at some other issues that may form part of it, not least the BBC’s commissioning process, to ensure that the developing competition between in-house and independents is truly fair. However, we support the broad principle of the proposed review.

[Lord Ashton of Hyde]

My Lords, I am grateful to the noble Lords, Lord Stevenson and Lord Foster, for their contributions. I start with something that has nothing to do with this. I point out to the noble Lord, Lord Stevenson, who said that I did not realise quite what was going on with the BBC because I only joined halfway through, that the BBC was debated 19 times before the BBC charter review in various different forms—so it certainly had an outing if not in quite the way that noble Lords might have wished.

Moving on to the amendments in this group, the amendment in the name of the noble Lord, Lord Stevenson, concerns the impact of the BBC’s new royal charter on radio production. There has been a lot of misinformation and confusion about this change, so I hope to set the record straight. In answer to the noble Lord, Lord Foster, the proposal for change originated from the BBC. It was well received by the Radio Independents Group, which had for a number of years been seeking to have more opportunities to bid for commissions from the BBC. Following negotiations between those two bodies, it was announced by the director of BBC Radio in June 2015. That agreement predated the publication of the BBC Green Paper.

Under the agreement, the BBC agreed to move from the current very limited quota-based arrangements to a new commissioning structure, opening up 60% of eligible hours to competition by 2022. This is a change that we strongly support, since it gives significant new opportunities to the growing independent radio production sector and gives BBC radio audiences access to the best ideas out there. But increasing the competition between independent and in-house productions does not guarantee, as the noble Lord, Lord Foster, reminded us, that the independent sector will receive more commissions. Companies will have to bid for work and BBC in-house staff will still be capable of winning. Unlike TV, there will still be, in effect, an in-house guarantee of 40% of all programmes, which reflects the BBC’s continuing importance to radio.

The new BBC charter sets a firm timescale for the implementation of this change. However, the timescale for the transition—by 2022—was set by the agreement between the BBC and the RIG in June 2015. It has to be for the BBC to consider the transitional arrangements in consultation with the independent production sector and to report on them as appropriate. These are operational matters for the BBC and it is not for us to have to report on them. The BBC already reports on a number of its production and commissioning outcomes across TV and radio and I am sure that it will continue to strive for transparency here. I do, however, acknowledge the concerns that the noble Lords, Lord Stevenson and Lord Foster, raised about the implications for BBC staff.

The changes are being introduced with a long transition and both the BBC and RIG are taking steps to ensure that the transition is as smooth as possible. The noble Lord, Lord Foster, talked about training. There is a strong ethos of training and diversity in the independent sector. For example, the next RIG offers a training programme that so far has provided training days to 1,089 individual learners, including a diversity mentoring scheme. Of the learners, 60% are women, 15% are BME and 5% are disabled. The RIG encourages its members to recruit from a diverse pool of candidates and also liaises with the BBC’s diversity team. It encourages its members to match the BBC’s employment conditions.

I am sure that both the BBC and the radio industry will pay close attention to the points raised by noble Lords today and take steps to ensure that the transition is handled as sensitively as possible. Fundamentally, though, this is about giving commissioners greater choice and ensuring that listeners have access to the best possible radio shows.

With that explanation, I hope that the noble Lord will be able to withdraw his amendment.

--- Later in debate ---

[Lord Puttnam]

My Lords, I support the amendment but come at it from a slightly different angle. The noble Baroness, Lady Buscombe, will remember that she and I discussed ad nauseam the issues of the EPG and we were very much on the same side. There is blame on both sides here. We failed at the time to persuade the then Government that common sense should make an organised EPG easy to use and that the public service broadcasters should be high on it. Today, if you go across the top bar, find sport and click on it, you will not find any sport on the BBC. You have to go back to the “all channels” menu. It is an absurdity.

We are here to discuss what will become the Digital Economy Act 2017. The notion that in 2017 we are not able to have a personalised programme guide in the same way as we would have on our iPhones, is daft. I am afraid that the blames lies with the then Government, who were persuaded by Sky that it had invested significantly in the EPG and had the right to amortise its investment. Honeyed words were given from the Front Bench that of course this would be reviewed quite quickly. It never has been reviewed and the absurdity of this so-called amortised investment has gone on now for 14 years. I suggest, and hope the Minister will sympathise, that this is the time to get real with this. It is 2017. An EPG should be able to be personalised very easily by the individual consumer and that is the way it should work.

[Lord Foster of Bath]

My Lords, clearly there is a lot of agreement about your Lordships’ Communications Committee’s recommendation that we have a new, up-to-date, fit-for-purpose EPG regime, which may also take on board the suggestions of the noble Lord, Lord Puttnam. We desperately need it.

Many examples have already been given: the difficulty of finding CBeebies and CBBC under a large number of cartoons; the difficulty of finding the iPlayer or the ITV Player on the first page of an on-demand screen on a smart TV; the difficulty of finding indigenous language channels such as S4C or BBC Alba; and even not being able to find the EPG itself on a smart TV.

There is very clear evidence that EPG positioning really matters. I will give just one example to illustrate it. If you look at the percentage of viewership of CBeebies on Virgin, where it is high up on the EPG, the share is much higher than the viewership of exactly the same programmes on Sky, where it is much lower on the EPG.

However, the real reason for my intervention is simply, as the Minister is about to respond to the debate, to draw his attention to what one of his right honourable friends—the former Secretary of State for Culture, Media and Sport—said just in 2011:

“Position on the EPG will probably be the Government’s single most important lever in protecting our tradition of public service broadcasting”.—[Official Report, Commons, 8/9/11; col. 543.]


When the Minister responds, I hope he will bear in mind what his right honourable friend said.

[Lord Ashton of Hyde]

My Lords, I thank all noble Lords who contributed to the debate. I have to warn the noble Lord, Lord Wigley, that despite his very kind remarks I may not be so amenable. My speech may contain some upsetting content—we broadcasters have to issue warnings.

Amendment 226A would extend the prominence provisions that currently exist for linear channels to on-demand electronic programme services, which are the lists of on-demand services available for selection on television interfaces. This issue was debated at length in the other place, although I note that this amendment goes further in integrating new provisions into the existing statutory framework for both EPGs and the PSB prominence regime. But I believe that the key issue remains as it was.

The Minister reassured Members in the other place then—and I reassure the Committee today—that the Government gave this issue considerable thought during last year’s balance of payments consultation, the response to which was published in August last year. Our conclusion was—and we remain of the view—that we have not seen compelling evidence of harm to PSBs to date. Creating a new regulatory regime that defines the user interfaces or submenus that should be caught, particularly in a fast-moving technological landscape, is likely to be complex. At the time of consultation, Ministers were not convinced of the benefit of regulation that might extend to, for instance, smart TV manufacturers’ user interfaces, which are developed with a global market in mind. We therefore decided not to extend the EPG prominence regime for PSBs to on-demand.

When PSBs make excellent content, generally audiences will find that content. This is true of both catch-up and live content. For example, the BBC’s award-winning children’s services are much viewed by children throughout the UK. We do not believe that further protections are necessary to ensure that children find these services. A recurring theme in the debates on the Bill has been how much more competent children are than many adults in the digital world.

Furthermore, acting in this area is extremely complicated and the fact that the amendment spans more than a page demonstrates some of the difficulties inherent in legislating in this area. The technological landscape is shifting quickly and, with it, the business models of those who seek to cater to changing audience tastes. Detailed regulations about how exactly audiences need to be guided through menus cannot be the answer here. Regulations would be outdated as soon as they came into force.

Moreover, this amendment would give prominence to the PSBs’ on-demand programme services, which include not only the PSB content of the commercial PSBs, but also content originating from their non- PSB channels. If the intention was to put on-demand EPG prominence on the same footing as linear EPG prominence, this amendment goes far beyond what we have in place for linear TV. It is therefore, in our view, not justifiable.

With that explanation—and I appreciate that the noble Lord may not be happy—I hope that tonight he will withdraw his amendment.

Digital Economy Bill

Lord Foster of Bath Excerpts

Committee: 4th sitting (Hansard - continued): House of Lords
Wednesday 8th February 2017 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, this amendment deals with the preparations that will need to be made should we be in the unfortunate situation that was animadverted by Sir Brian Leveson when he finished his part 1 report, if the press self-regulation proposals made in it are not fulfilled.

The current situation is complex, and it may be slightly premature to assume that everything is going to fail, but I think that, of the two types of problem that he identified, the first—that no recognised regulator was appointed within a year of the recognition panel’s being established—has not come through. We have a recognised regulator, and it was approved very recently, within a year of the recognition panel’s being established. That is a good thing, and we should bank on that.

The second problem, however, remains. His feeling was that there would be no value in the self-regulatory proposals he was advocating if significant news publishers remained outside the recognised regulator. That has happened in spades. There is a body established by the industry and largely for the industry, IPSO, which is not seeking recognition under the existing procedures. Therefore, that would, I think, represent a failure in terms of Leveson’s original proposal. We also have a situation in which the recognised regulator is not attracting significant support from the press which might be regulated by it, although it does have some support, and that is good, and we support that. It is not, however, operating at the scale or encompassing sufficient of the broad press, which was the focus of the original report, to be considered a success.

We are facing a problem. The problem was anticipated, and the solution proposed by Lord Justice Leveson at that stage was a backstop regulator. Therefore this amendment—which is limited in terms of the exact wording to the digital media, although it could, I think, be read as more appropriate for the wider situation—is almost certainly going to be required because of the situation I have outlined. Obviously, we regret that. We wish, as we always have, that a properly self-regulatory system could be established. However, it is extraordinary that the press, as Lord Justice Leveson says, benefits from considerable support in statute for the activities that it wants, including a provision in an amendment to this Bill to protect journalists who wish to break stories that were in the public interest and who might otherwise be caught by concerns about data leakage. That is an example of the sorts of ways we have often legislated for and supported the press because everybody believes in a free press and believes that the press should be able to operate within the law and without any constraint. However, we also believe—this is particularly true of those who have been victims of press intrusion into their private lives—that the public will not settle for a situation in which the press escapes standards regulation altogether.

We will therefore face a situation within a few months where it is likely that it will not be possible that the Leveson proposals have been brought in and there is a need for a standards regulator. The standards regulator proposed by Leveson in his report is Ofcom, and there is much in the report which shows and explains why that would be a good thing. My amendment, which I hope the Government will accept, says that it is time to start to think about how this will impact on Ofcom’s work and to bring forward proposals under which that should operate. I beg to move.

[Lord Foster of Bath (LD)]

My Lords, it is four years after the Leveson inquiry, and I certainly believe that Section 40 of the Crime and Courts Act 2013 should be implemented, and should be implemented now. I voted for it in your Lordships’ House last October and I certainly support the amendments today, which have much the same effect. I also support the fail-safe amendment moved by the noble Lord, Lord Stevenson, although I hope that it is not necessary and that Section 40 will be brought in.

Some incredibly misleading statements have been made about the impact of Section 40. Most of the newspapers, as we know, do not support its implementation and have featured some quite amazing one-sided editorials. To the best of my knowledge, none of them has permitted a right of reply. I am the former Member of Parliament for the wonderful city of Bath, which is included in my title, so I am sure that noble Lords will not be surprised that I take a particular interest and am an avid online reader of the Bath Chronicle. Three weeks ago it published one of these anti-Section 40 diatribes. I wrote a rebuttal and asked the Bath Chronicle to publish it. I have not even had an acknowledgement so far—so much for a free press.

Perhaps to explain why I support these amendments, and to ensure it is published—albeit in Hansard rather than in the Bath Chronicle—I will read what I wrote, because it sums up exactly where I stand:

“I am a strong supporter of local newspapers and the Bath Chronicle in particular. But I was surprised by your recent editorial suggesting that measures being considered by parliament will mean that ‘Any investigation in the public interest could be silenced by anyone with a vested interest’. This is a complete misreading of the proposals made by Lord Justice Leveson after the Public Inquiry which followed the appalling phone hacking scandal.


Few could deny that in the past the press had a shocking track record of setting up its own toothless regulators which failed to protect the public. Leveson has proposed that the press should now establish a truly independent regulator whose independence is checked and then ‘recognised’ by a body which is itself impartial and independent from government or the press.


This is what the public want as shown by a YouGov poll just last week. When asked ‘Do you think it is important that any newspaper self-regulator undergoes an audit to ensure it is effective and that it is genuinely independent of both politicians and the press?’ nearly three-quarters (72%) said yes and just 6% said no.


The ‘regulator’ under which the Bath Chronicle operates—called IPSO—doesn’t meet this test. It is not only funded but controlled by the newspapers it regulates.


Were the Chronicle to join a ‘recognised’ regulator, or were IPSO to demonstrate through getting recognised that it met proper standards of independence and effectiveness, the funding issues you describe would not happen. Moreover, the public would be protected and you”—


that is, the Chronicle—

“would receive protection from wealthy and powerful local figures if they tried to bully you into withholding stories about them by threatening you with unaffordable court costs”.

My article ended:

“I hope Parliament will agree to support the public and back Leveson’s proposals”.


I certainly hope the Government will accept the amendments before us today.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, I am obliged to the noble Lord, Lord Stevenson, for expressing this amendment and also to the observations of the noble Lord, Lord Foster of Bath. I would say, with respect to his most recent comments, that the test of a free press is not whether or not they publish a letter. Indeed, the fact that they do not publish your letter is itself an expression of freedom.

Amendment 229ZC would require the Government to report to Parliament about the arrangements that would need to be made should Ofcom assume the responsibilities of an independent regulator of digital publications. I acknowledge the care with which the noble Lord, Lord Stevenson, has drafted this amendment. He was quite candid in saying that his real concern is the regulation of the press, but he was equally candid in indicating that, in order to come within scope for the purposes of this Bill, he was not really concerned with all publications by the press but only digital publications.

I see in his amendment an expression of concern—and, indeed, of frustration—over the lack of progress being made towards a viable avenue for press regulation. I am sure that in a sense that, in part, has prompted this amendment. However, he said himself that it might be slightly premature. With respect, I would concur with that observation. It is perhaps too soon—and people will say in response, “Four years after Leveson, is anything too soon?”—but we have to remember that the press landscape has altered quite dramatically over the last four or five years. That is reflected in the fact that certain matters have gone out for consultation—particularly with regard to Section 40, which is going to be raised in a later amendment—albeit that the consultation process has been somewhat stymied by an application for judicial review.

I move on to the core of the present amendment, which is the idea that we should move towards—and this was a backstop of Lord Leveson’s report—Ofcom as a regulator. The idea that Ofcom should regulate digital publications—albeit with “digital publications” not being a defined term, and I make nothing of that—has behind it the real push that Ofcom should become the regulator for the press. As I understand it, that is essentially what lies behind the amendment.

Let us remember that Ofcom already has huge responsibilities as a regulator, many of which we have debated over the last week. Among other things, it has to ensure that we have fast broadband connections, competition decisions, such as the current consideration of the future of Openreach, which has been referred to, and spectrum management, including forthcoming auctions. We have also discussed today its new role in respect of the BBC and its function in managing listed events, and we have heard from my noble friend Lord Borwick in respect of Ofcom’s regulatory functions and in respect of subtitles and the accessibility of on-demand services. There is plenty more, over and above that, that Ofcom does, and that is without even going into the question of postal regulatory functions.

We have the greatest respect for Ofcom as a regulator, but the question arises about how much more we can put on its plate. This amendment seeks to pile on more. For the first time, it would be setting a regulatory requirement on Ofcom, in statute, in relation to internet content, which is not TV-like, if I may use that rather crude term. As my noble friend Lady Buscombe has already made clear, moving to a situation in which Ofcom is a regulator of a broad range of online content would be an enormous undertaking for Ofcom, or indeed for any other regulatory body.

Digital Economy Bill

Lord Foster of Bath Excerpts

Report: 1st sitting: House of Lords
Wednesday 22nd February 2017 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I move Amendment 25 and am grateful for the support of my noble friend Lady Jones and the noble Lords, Lord Clement-Jones and Lord Foster.

This is a rerun of an amendment that we tabled in Committee. At the time, discussions were in place between rights holders and those who operate the search engines, which are the focus of the amendment, and we were not sure how that would play out. We were promised much, and the Government have again delivered—which is becoming too much of a refrain for my liking. A voluntary code has been agreed between the parties, signed up to and issued—there has been press notification about it, so it must be true. The question is: what will it do? That has not been answered. We have discussed what it might do, but we have not yet seen the wording of the voluntary code. I ask the Minister to circulate to those participating in the debate what is in the much-vaunted code, so that we have a sense of whether it will achieve its purpose.

My concern from what I have heard is in three parts. First, it is large copyright-owners and large inquiry systems such as Google that are involved. That begs the question of whether those who are less able to exercise their rights—particularly those who have individual or small parts of rights in small productions—will have any voice. The reporting that I have read talks about rights holders and search engines working promptly on receiving responses about infringing content to ensure that these things are taken down.

Secondly, there is much talk of expanding efforts,

“to more effectively use such notices to demote domains demonstrated to be dedicated to infringement, and to work collaboratively with rights holders to consider other technically reasonable, scalable avenues empirically demonstrated to help materially reduce the appearance of illegitimate sites in the top search rankings”.

I could read that again, because you would probably need to hear it again to have the faintest idea what we are talking about. I fear that it smacks of either a lowest common denominator approach or some hard arm-wrestling in the corridors where the discussion took place to get something that looks reasonable on paper. It does not smack of a real commitment to scourge out the terrible way in which search engines have referred people who should have known better to material that was not cleared for copyright and should not have been made available to them through that route. There is also talk about,

“work to prevent generation of Autocomplete suggestions which lead consumers towards infringing websites”.

It says that work will be done to prevent it, not that it will be stopped.

“Search engines will provide, or continue to provide, processes to promptly remove advertisements”,


linked to searches. So my second point is that this all looks pretty good on the surface, but will it work in practice? I have my doubts.

Thirdly, it will be run by the Minister of State for Intellectual Property, who,

“will oversee the implementation of this Code of Practice, supported by quarterly meetings of all parties, and set requirements for reporting by search engines and rights holders on any matter herein, including in particular those matters where the Code of Practice calls for ongoing discussion”.

At last, we get it:

“The Minister shall review the effectiveness of the Code with the parties after one year, and ensure continuing progress towards achieving the Shared Objectives”—


which is, rather nicely, in my copy, in capital letters, so they must be really important.

It is easy to lampoon this. I am sure it is a good step forward in the right direction, and we wish it well, but I wonder whether it will take the trick on this issue. As we said in a previous discussion, should there not be a backstop power; should these powers not be taken now by the Government to ensure that they can do something if it does not work, if some people move away from it, or if new entrants to the market feel that they have no responsibility to be part of it? These are open questions. There may be a way through, there may not, but we have no way to resolve that because this is a voluntary process.

It took a long time to get to the voluntary code: the working group has been meeting on and off for three or four years, so we know that this is not an easy nut to crack. It is an issue that causes a lot of annoyance and concern. It also affects the earnings of those who have rights that have been abused in this way. There is a feeling—I put it no stronger than that—among those who perhaps know more about this than I do that the search engines do not want to go any further because they fear statutory provision. In other countries and territories—indeed, in America—there is statutory provision, and that has made the difference over there. Why are we not doing that here?

There are a lot of questions about this. The amendment would give a solution to the Government if they wished to take it. I hope that they will consider it, and I beg to move.

[Lord Foster of Bath (LD)]

My Lords, I am delighted to support the amendment in the names of the noble Lord, Lord Stevenson, and others. I am sure that all Members of the House recognise that there is a serious problem that needs to be addressed, although fewer people are accessing illegal material on the internet as a result of the growing number of relatively cheap and easily accessible alternatives. We should welcome that and the fact that in this country we probably provide a wider range of alternative legal sources—for the downloading of music, for example—than any other in the world. Nevertheless, there continues to be a problem, with about 15% of UK internet users—about 6.7 million people—continuing to download and access illegal material. I therefore welcome any measures that can be taken to introduce ways to prevent that. Of course I welcome the voluntary agreement that has been reached. I congratulate the Minister for Intellectual Property, who I know has worked very hard with the relevant parties, including the IPO, to secure the voluntary code. As the noble Lord, Lord Stevenson, said, the details have still to be worked on and there will be a review in 2017.

I ask the Minister to reflect seriously on this key point. In opposition, I have spent a lot of time moving amendments to various proposals that the Government “may” do something to delete “may” and insert “must”. On this occasion, I am delighted to support the amendment, which says that the Government may do something, if the need arises.

The Department for Culture, Media and Sport is rarely given credit for the important role it plays in the life of this country. As a result, it rarely has opportunities to have legislation before the House. While the Minister may tell me, as she did in a previous debate, that should the voluntary code not work, the Government will consider taking legal action at some point, she would find it difficult to find a legislative peg on which to hang that action.

The Intellectual Property Alliance and others have suggested that we need a backstop mechanism in the event that the code, which we welcome, is unsuccessful in future. For that reason, I hope that the Government will be willing to accept what is a simple amendment giving them power in future if they need it.

[Baroness Buscombe]

My Lords, Amendment 25 returns to the topic of search engines and copyright and would give the Government power to impose a code of practice on search engines to minimise the visibility of copyright-infringing websites in search results.

As we have discussed previously, this is an area in which we have been seeking a voluntary agreement between search engines and rights holders, and I am pleased to be able to confirm that we now have that agreement and have finalised the text of a code of practice. This newly agreed code sets out clear targets for reducing the visibility of infringing websites in search results. The code also specifies a number of areas where rights holders and search engines have agreed to work together with the general aim of supporting legitimate content and reducing piracy. We have always been clear that action is needed in this area and it is a manifesto commitment. But we have also been clear that a voluntary agreement would be quicker, more flexible and, most importantly of all, more collaborative than a legislative intervention. We now have that voluntary agreement and the parties to the code are already working to deliver on the commitments it contains. All parties to the agreement have engaged in these negotiations and the work to date in good faith. They are continuing to work in good faith and I am confident that that will also be the case for work going forwards.

The noble Lord, Lord Stevenson, questioned whether it would be possible to have sight of the code. We do not plan to publish the code in full because details about the number of copyright infringement reports a site can receive before it is demoted might allow pirates to game the system. We are, however, very happy to share the commitments in the code in more general terms.

We understand where noble Lords are coming from in seeking a backstop power, but I return to that word “collaborative”. We have come a very long way in what we have achieved thus far. I can remember working and having discussions with search engines in years gone by, trying to encourage them to respect and accept responsibility for what they do and the impact they can have on others. In that sense, we believe very strongly that we should continue with that collaboration and not consider a backstop power. We do not believe it is necessary. With that explanation, I hope the noble Lord will accept that a statutory power is not needed at present and thus feel able to withdraw the amendment.

Digital Economy Bill

Lord Foster of Bath Excerpts

Report: 2nd sitting (Hansard - continued): House of Lords
Monday 20th March 2017 Lords Chamber

Moved by

[Lord Foster of Bath]

29A: Clause 80, page 84, line 3, at end insert “and taking due account of the merits of the case”.

[Lord Foster of Bath (LD)]

Wow, my Lords, what a tour de force.

Some time ago, we were debating the last string of amendments, during which the Minister sought to achieve the impossible and, according to the noble Lord, Lord Whitty, almost succeeded. In moving Amendment 29A, which is in my name and that of my noble friend Lord Clement-Jones, I am going to ask the Minister not to achieve the impossible, but merely to give a very clear statement to the House at the end of the debate, with which I hope we will then be satisfied, so that we can move on.

In Clause 80 at the moment, the Government seek to change the regime for appeals from Ofcom decisions from an appeal on the merits to one which follows a judicial review standard. As the Minister is well aware, the move is opposed by the vast majority of the telecoms industry, including the most significant investors in telecoms infrastructure. It is also opposed by many smaller players, by new entrants and by the industry bodies, the CBI and techUK.

Ofcom is an immensely powerful regulator which can make life-or-death decisions for these companies and their investors. The industry players feel that it is only fair that they should have the protection of due process. They believe that changing the appeals regime in the way proposed introduces significant regulatory uncertainty into the UK investment environment.

There is no evidence that has convinced us that Clause 80 is necessary, let alone desirable. Many claims have been made to support the need for a change that have transpired to be simply wrong. For example, it was initially claimed that it would bring Ofcom appeals into line with other sectors, but that point has now been dropped. The Minister made that very clear at col. 1737 in our deliberations in Committee on 8 February. It was also claimed that the new approach would be quicker, but evidence clearly shows that judicial reviews can take at least as long as current telecoms appeals. Many other claims were made which were effectively debunked in Committee by my noble friend Lord Clement-Jones.

Despite all that, in Committee, the Minister refused to accept an amendment which would have done no more than duplicate the wording of the EU directive, which implements the right to appeal under consideration. Rather strangely, the Minister said:

“I acknowledge that the amendment essentially replicates the wording of Article 4 of the EU framework directive, albeit it is not identical to it. While this would in one view remove the gold-plating of the existing standard in a technical sense, the Government consider that it would not lead to any substantive change in approach”.—[Official Report, 8/2/17; col 1739.]


In that statement, he seems to indicate a lack of faith in the judicial bodies responsible for hearing appeals, almost implying that they are not capable of applying the law properly. I say that because the only alternative interpretation of what he said is that the Government now intend to underimplement the framework directive and put in place a standard which does not meet the European requirements.

On the one hand, we are assured by the Government that the words in Clause 80 will allow appeal bodies to take due account of the merits, but the noble and learned Lord, Lord Keen, by saying that a substantive change of approach was required, implied something different. After all, the language of Clause 80 plainly refers only to judicial review. As traditionally understood, this would absolutely not encompass consideration of “merits”.

I argue that there is a real risk of ambiguity that could cause confusion when the first cases are taken under the provision. I hope that the noble and learned Lord will not only respond to the general point but give a clear statement about what exactly is intended by Clause 80 and whether the appeal bodies will be allowed to do what the framework directive says, which is to ensure that,

“the merits of the case are duly taken into account”.

Just before I finish, I ask the Minister to give one more clarification on an issue about which there is confusion. He will recall that during debate in Committee, my noble friend Lord Lester raised with him the point that judicial review in cases that do not relate to European directives do not have merits taken into account, whereas in relation to European directives they do. The debate was about proportionality. The Minister was very clear when he said,

“here we are dealing with judicial review in the context of the EU framework directive, which requires that the merits of the case are duly taken into account in any appeal”.—[Official Report, 8/2/17; col 1738.]

That is the sort of clear statement that I hope that he will repeat today. I hope that he can go further and explain what will happen post Brexit—although I assume that the entire EU directive will be transposed into UK law. Then, perhaps we will maintain the proportionality to which he referred and the merits will continue to be taken into account. I hope that he can clarify that for me, as well as give that clear statement—not an impossible task—and we can then quickly move on.

--- Later in debate ---

[Lord Foster of Bath]

My Lords, it is late but I would love to rebut some of the Minister’s remarks about rerunning arguments, swathes of evidence, frustrating delays, uncertainty and so on. If he looks at the Ministry of Justice’s own figures over the last 10 years, judicial review took on average between 9.3 and 13 months. I can compare that with many merits-based cases that have taken considerably less time under the current Ofcom regime. He talked about no other regulators operating in that way: I point out that the water, electricity, health, aviation and post sectors all currently face scrutiny under regimes that do require consideration of merits.

However, I do not want to go into all those details. I thank the Minister because he has, in effect, said what I wanted him to say. It was half put on the record on 8 February when he talked about the requirement for the merits of a case to be,

“duly taken into account in any appeal”.—[Official Report, 8/2/17; col. 1737.]

That has been repeated today. Disappointingly, the Minister said no more about what will happen post Brexit, other than that it is a matter we will consider in due course. Nevertheless, I thank the Minister for at least going some way to providing what I asked for and beg leave to withdraw.

Amendment 29A withdrawn.