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Viscount Goschen: In responding to the amendments, the Minister has an excellent opportunity to reassure the Committee and the industry about what circumstances are in the Government's mind with regard to Clause 103—under what circumstances they would seek to introduce directions by statutory instrument rather than allow the voluntary code of practice to continue.

We well know that the industry tends to know much more about the business of providing information—the ins and outs of the competitive framework—than do the Government. The industry is a vital part of making this area of the Bill work. If it is compelled to do something, the chance of it co-operating fully will be much less. It is clearly in the Government's interest to reassure the industry that Clause 103 is a reserve power.

My noble friend Lord Northesk and the noble Lord, Lord Phillips of Sudbury, have provided some more objective tests to be used—some further hurdles to be overcome. The Minister may or may not like the specific tests that they have proposed, but the Committee wants further reassurance on when and how the clause will be invoked. All our discussion on Clause 102 for the past two or three hours has been useless if the Government have it in mind to use Clause 103 at the flip of a switch.

Lord Rooker: I take the point behind the amendments. I can make one commitment that may answer the Committee's suspicion. I cannot read out a list of criteria by which we would decide, if necessary, to switch from a voluntary to a mandatory scheme. However, during consultation on the code of practice, an objective set of criteria to determine its success or failure will be drawn up. I cannot put it better than that. During those discussions, we will draw up with the industry and the Information Commissioner an objective set of criteria to decide at a given time whether the code had been a success or a failure. If it were a failure, that would trigger either further consultation to revise the code or the mandatory route.

I can entertain the Committee with much repetition of what I said earlier, but my remarks just now go to the central point that is the thrust behind the amendments. We want to be open and objective about measuring the code's success or failure. As I said, that set of criteria will be drawn up during the consultation.

Lord Phillips of Sudbury: That reply is helpful. What if the Minister had to go down the compulsory route and the industry came running to his door, started negotiating seriously and effectively and, after six months, let us say, we had a code with which everybody was satisfied? As I understand it, nothing in the Bill would allow the two-year period to be broken or ended. I wonder whether that is right and sensible.

Lord Rooker: I do not know, but I am happy to consider that in the time available. We want the thing

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to work. If we can clarify that point, we will. If the voluntary system has failed and we are moving to a statutory system but, following negotiation, there is an agreement to continue a voluntary system, by definition there is no dispute any longer and it does not make sense to ramrod the statutory system. I shall take advice and clarify the process, if I can, because that is in everyone's interest.

Lord Phillips of Sudbury: I thank the Minister for that reply and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 173B not moved.]

The Deputy Chairman of Committees: Before calling Amendment No. 173A, I must advise the Committee that, if it is agreed to, I cannot call Amendments Nos. 173C to 176 inclusive due to pre-emption.

[Amendments Nos. 173A and 173C not moved.]

[Amendment No. 173C not moved.]

The Deputy Chairman of Committees: Before calling Amendment No. 173D, I must advise the Committee that if it is agreed to I cannot call Amendment No. 174.

[Amendments Nos. 173 to 174B not moved.]

Lord Phillips of Sudbury moved Amendment No. 175:

Page 62, line 43, after Xto" insert Xpublic"

The noble Lord said: I speak for all those named on the amendment. I hope that the Committee will be patient if I deal with it with some care—care partly because it affects an issue which causes consternation outside the Chamber in the industry and care because, frankly, I do not know what I am talking about!

On that score, I should pay tribute to the great deal of help which we on this side of the Committee have received from the Foundation for Information Policy Research and the Internet Service Providers Association. Both those organisations are steeped in the intricacies of this strange world.

The point of the little word Xpublic", inserted in Clause 103(2)(a), is that where the Secretary of State gives directions he must give that information and direction to public communications providers generally in order to get away from the personal/private provider as defined by the legislation. It is also to restrict the coercive powers of Clause 103 to public communications providers.

As drafted, the clause would compel the keeping or retaining of data not just to communications providers under the Bill, sometimes called Internet service providers and telephone companies, but to anyone with a computer utilising software providing any kind of service, commercial or not. That would include a web server, file sharing software, and so-called Xpeer-to-peer" networking. Peer-to-peer networking is not the kind of thing Members of this House do for many hours a day in the many nooks and crannies of this wonderful building, quaffing and talking, although it is the same spelling. Peer-to-peer networking involves

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computing devices which talk directly to one another without a central computer controlling that communication. Devices used in peer-to-peer communications, which is known in the trade as P2P, can include not only desk-top computers but also PDAs, palm or hand-held computers, corporate workstations or even cell phones. Hooking up computers by P2P connections is a critical step for the future of computing generally. That is the importance of this apparently small amendment.

For many years, computer users had to dump their information into a central data base before anyone else could use it. But with P2P networking, users can share on a one-to-one basis as data is generated, rather than waiting for central data bases to be updated, therefore allowing for more accurate and time-sensitive decisions. For example, a PC user with the right permissions could check on his co-worker's laptop to see whether a particular file existed. P2P networking is also becoming vital to collaboration between workers and has, I am told and believe, huge potential commercial application. Through direct computer-to-computer collaboration, users can share files easily and message each other as they do so. These functions, which help to duplicate the environment of an in-person meeting, are extremely helpful to companies as workers spread out across the country and the globe.

For consumers P2P networking is an irreplaceable tool for global knowledge-sharing and media distribution and makes it possible for users to have quick and easy access to entertainment and software cheaply relayed to each other's computers at a price that cannot be matched in the outside world. It also helps users to share information, files and research that they cannot find elsewhere. That is the purpose of inserting Xpublic" in the two places in the Bill. I should be interested to know whether the Government have any objection to these proposals. I beg to move.

10 p.m.

The Earl of Northesk: I rise to contribute to the noble Lord's introduction to these amendments and speak to Amendments Nos. 177E, 177F and 177G. The Bill is drafted in such a way as to compel the retention of data by private as well as public networks. The Minister confirmed that point in an earlier debate. Thus it applies to a massive sub-set of computing uses. The noble Lord, Lord Phillips, mentioned peer-to-peer or P2P which is already a well-established medium for data transfer and exchange over the Internet.

Many—or maybe few—will be aware of the legal action conducted in America against Napster by the recording industry. Whatever the outcome, P2P, whether represented by Napster derivatives or successors such as the systems engineered by the recording industry—I believe that one was announced today—is becoming a benchmark for data transfer of content over the web.

In terms, therefore, the Bill potentially requires private computers, perhaps even down to the level of the individual user, to log arbitrary data. If it applies

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at that level and users are required to log traffic and report usage upon government request, not only will it be an unwarranted intrusion upon the individual but it could also severely impair research and development of a number of P2P software applications.

There are those who believe that P2P and its variants are the future of e-commerce. For example, Andrew Grove, former chairman of Intel Corporation, observed:

XWeb computing defined the second half of the '90s; peer-to-peer computing will be a significant paradigm"—

a wonderful word—

Xof the first half of this decade".

How does that square with the Government's commitment to e-commerce?

Amendments Nos. 177E, 177F and 177G are quite technical but no less important for that. Amendment No. 177E seeks to ensure that data generated temporarily during the course of computing operations, which has no separate business use, are not inadvertently caught by the scope of the Bill. I believe that the Minister has already given assurances on the point, so if he chooses not to reply to that amendment I shall probably be satisfied. Amendments Nos. 177F and 177G echo the concerns raised in respect of Amendments Nos. 175 and 176. I have in mind—I may be wrong—that our debates on RIP provoked assurances that the provisions of that Act did not extend to private telecoms networks. Perhaps the Minister can confirm that one way or the other.

I move to Amendment No. 177G. The particular focus of our debates on RIP was whether its provisions extended to providers of private telecoms networks. This amendment also seeks to address that problem.

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