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5.10 p.m.

Baroness Hamwee: My Lords, I thank the Minister for explaining the regulations, or perhaps I should say decoding or decrypting them. The speeches this afternoon have shown that the regulations are not as esoteric or technical as they would appear. The contributions of the noble Baronesses, Lady Dean and Lady David, have shown that the regulations raise points of concern.

I declare an interest. I am a partner in a firm of solicitors which acts for many individuals and companies in most branches of the entertainment industry. Because we act on both sides, I have not been able to work out any financial interest in the outcome of the debate.

It is a pity that the regulations are in the form of a statutory instrument and cannot be amended. Even though the regulations amend primary legislation, it is something of an irony and a difficulty that in applying the three directives we do not have the flexibility in this House or in another place to have as wide-ranging a debate centering around particular proposals as we would were we dealing with that primary legislation on a more direct basis. It is appropriate that there has been long consultation with various bodies. The practitioners and those who will be directly affected should have the first and the longest say. However, the time that has been taken has led to a great degree of frustration that the directives have not yet been implemented. I sense that some of the alterations that have come out of the negotiations have tended to address the workability of technical issues rather than more substantive points.

Reference has already been made to the provisions for equitable remuneration. It is a pity after so long a time that there is not a legislative basis in this area. The workability of the market requires that one should know in advance how such a matter will operate or, at any rate, whether there will be equality of bargaining power. That point has already been referred to by the noble Baroness, Lady Dean. My experience from acting on both sides--acting for an artist or a writer and for a company contracting to acquire certain rights--is that the author or performer is generally the weaker party. That is often so even when the artist is a major artist. One feels within the legal profession that it would be quite useful if one could start negotiating contracts about two stages down the line from one's standard amendments to a standard contract. However, one has to go through the arguments every time.

I wish to take this opportunity to raise a number of specific points. I hope that these have already reached the Minister. They reached me very late in the day, so they reached the Minister even later. I apologise that I was not able to give him longer notice.

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My first query concerns the redrafted Section 18 of the 1988 Act. Section 16 of that Act says that the owner of the copyright in a work has the exclusive rights to do certain acts in the United Kingdom. One of those acts is what is referred to in Section 18. Section 18 gives rise to the possibility that it would be an infringement of copyright in the UK to do something in the EEA. Is it really intended that that will have effect in relation to extraterritorial acts?

Secondly, the noble Lord, Lord Brain, referred to the effective date of Regulation 27(1). I should be grateful if the Minister could assist on whether, for instance, any equitable remuneration could arise for rental of a video in relation to a film where the contract was entered into before 19th November, 1992, the date in Regulation 27(1). That regulation does not expressly refer to Regulation 33. It uses the term:

"Except as otherwise expressly provided".

It would be helpful to know whether Regulation 33 is intended to be construed as being an "express provision". It is clearly important to the financial interests of a large number of writers and performers to know how these two regulations interrelate.

On the question of satellite broadcasts, why are the regulations silent on a provision aiming at the protection of programmes containing encrypted signals? The specific rule adopted by the directive for encrypted signals reflects the inherent differences between broadcasting of unscrambled or clear signals and encrypted signals. I should be grateful if the Minister could assist on the question of the reception of signals broadcast in an unscrambled form which cannot be controlled once the uplink operation is done--the dispatch of the signal, if I may put it in more lay terms. One can only watch, as a member of the public, an encrypted signal once it has been decoded. The insertion of a specific rule for encrypted signals was the result of intensive lobbying to the European Commission. I should be glad to know why in this country we are dealing with the matter in a different fashion. Turning the broadcast into a communication to the public is quite different from the clear broadcasting of unscrambled signals.

I turn to the question of the exclusive right of authors to authorise communication to the public by satellite. It would be helpful to know whether the reference in Section 20 of the 1988 Act to the broadcasting of a work or its inclusion in a cable programme service covers the lack of provision for an author to have an exclusive right to authorise satellite broadcasts of his works. That is required in Article 2 of the directive but is not in the regulations.

In relation to satellites, the statutory instrument does not contain a provision ensuring that the acquisition of a satellite broadcasting right must be obtained "only by agreement". Those words appear in Article 3 of the directive. Can the Minister confirm that the current practice of voluntary contractual negotiations, as they have been described by me, between the holders of rights and the users will be continued?

I now turn to cable retransmission and the question of definition. I apologise to your Lordships for this series of technical questions, but I believe that this is

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the last opportunity that the industry will have to get answers to them on the record. Can the Minister explain why the formulation in the directive has not been adopted verbatim in the statutory instrument? The definition of cable retransmission contained in the statutory instrument is not as detailed and precise as in the directive, which refers to,

"simultaneous, unaltered and unabridged retransmission".

As regards the acquisition of the cable retransmission rights, the directive requires member states to ensure that cable retransmission in the United Kingdom takes place,

"on the basis of individual or collective contractual agreements"

between the owners, neighbouring rights holders and cable operators. Can the Minister confirm that the current practice of voluntary or contractual acquisition of cable rights will continue to be applied?

I now come to the issue of mediation. Article 11 of the directive refers to mediation, but the statutory instrument contains no provision on the possibility of having recourse to mediation. Perhaps the Minister can explain that.

Finally, I turn to the prevention of abuses of the negotiating position. The directive requires member states to ensure that parties to a cable licence agreement will enter into and conduct negotiations regarding authorisation of the cable retransmission, "in good faith" and will not hinder negotiations without valid justification. Reading that, I realise what an interesting gap that shows in the differences between the legal system of this country and other countries within the EU as regards whether one looks at the spirit of a provision or its precise terms.

Can the Minister confirm whether, as in the past, the Monopolies and Mergers Commission will continue to have jurisdiction on refusals to grant licences on reasonable terms. Can he also confirm whether that jurisdiction will extend to abuses of the negotiating position on the part of the cable distributor? I apologise again for taking the time of the House, but I do not apologise very much because these matters still need to be clarified at this stage so it is right to take the time to do so.

5.23 p.m.

Lord Peston: My Lords, the directive and the statutory instrument cover many matters and I can comment on only a few of them. I have no problem there because other noble Lords have dealt with all the important matters better than I could possibly have done. The noble Lord, Lord Brain, said that it would have been better if we had had a Bill to deal with these matters, and I agree with him. Apart from anything else, the statutory instrument is longer than some Bills that I have dealt with. I know full well why the Minister would choose not to have a Bill, but a statutory instrument. However, that limits us as to how we can become involved in the detail. The noble Baroness, Lady Hamwee, said that the matter was not esoteric or technical. The topic is not, but the statutory instrument is extremely esoteric and technical. Just listening to the debate today I have my usual problem that I believe

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I understand what has been said but then someone says something and I realise that I do not understand a word of what we are talking about. However, I shall do the best I can.

I certainly believe that this is a real question and not an academic matter. For example, I take simply the row that has been going on between Thorn EMI and the British Academy of Songwriters, Composers and Authors on composers' royalties. We are dealing with very serious matters here. We are talking about vast sums of money and the very important rights that people have.

Having said that, although there are criticisms, I do not believe that we should ignore the fact that, central to the directive and the statutory instrument, is something which is very important to creators and performers; namely, that they are provided with new rights to earn additional revenue from renting and lending their works. Even though noble Lords have made points saying that that is not exactly the way they would have liked to see matters happen or there is this or that problem, one should not underestimate that ultimately this provision will lead to developments which will be beneficial to creators and performers.

My experience of this whole area of intellectual property is that it is fraught with difficulty. We have the authors, composers, performers, producers and lenders. They all need each other, but my experience when they get in touch with me is that they all hate each other as well. Each assumes that there is something hidden going on which is preventing them from getting their just deserts. The noble Baroness, Lady Hamwee, said that she appears as a lawyer for both sides. I hope that her firm has a lot of money. There are many sides and I hope that the noble Baroness appears as a lawyer for all of them. The fact is that one knows as an outsider that one cannot do right by all of them.

A further difficulty that I have is that, on the whole, those who have been in touch with me have been on the side of the performer and composer, and people like that. The one group which did not feel that there was any point in getting in touch with me were the producers and television companies, at least until today.

I wish to place on record the view that if one wishes to influence another, whether speaking from these Benches or from the Government Benches, writing to them with about an hour to spare is not exactly the way to get one's view included in whatever is going on--

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