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Baroness Crawley: My Lords, I beg to move that the House do now adjourn during pleasure until 8.28 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.16 to 8.28 p.m.]

Communications Bill

House again in Committee.

Viscount Falkland moved Amendment No. 235:

(1) Section 72 of the Copyright, Designs and Patents Act 1988 (c. 48) (free public showing or playing of broadcast or cable programme) is amended as follows.
(2) In subsection (2), after paragraph (b) there is inserted—
"(c) if that place is a licensed betting office."
(3) After subsection (4), there is inserted—
"(5) In this section, "licensed betting office" means premises in respect of which a betting office licence, within the meaning of section 9 of the Betting, Gaming and Lotteries Act 1963 (c. 2) (betting office licences and betting agency permits), is for the time being in force.""

The noble Viscount said: Amendment No. 235 inserts a new clause after Clause 294. This is a rather narrow interest but is a matter which has caused concern among broadcasters for some time.

The new clause would allow owners of broadcasting rights to charge for the use of their material when it is broadcast within a licensed betting office, otherwise known as a betting shop. At present free-to-air

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broadcasts can be used by bookmakers in betting shops for commercial gain without any financial return to the rights holders. This mainly affects horse racing, obviously, but it also has an impact on other televised sports.

The new clause is intended to allow owners of television rights to sports events to realise the full value of their assets in circumstances in which those rights are exploited for commercial gain by betting offices.

The best example of how the law puts a sport at a disadvantage is in the case of racing. Currently, approximately 11 per cent of races each year are broadcast via the BBC or Channel 4. These races can be shown in betting shops, as well as pubs and bars, as long as they do not charge for admission, without any payment either to the racecourses or to the broadcasters.

This free service is of some considerable value to betting shops. The televising of racing in this way has helped drive up betting office turnover by an estimated 30 per cent in recent years, which represents considerable money.

Since the introduction of the Copyright, Design and Patents Act 1988, television broadcasting in the United Kingdom has been transformed by the introduction of pay television in the form of either satellite or cable broadcasting. This has led to increased competition in the acquisition of broadcasting rights to live sporting events and accordingly increased the costs associated with those rights—many members of the Committee will remember the great deal of publicity given to the matter in recent times—making it imperative for broadcasters to be able to maximise the exploitation of the rights acquired.

An anomaly has arisen in that, under the current legislation, Sky and cable are able to charge, because their channels are encrypted, but free-to-air terrestrial broadcasters are not. This encourages rights owners not to allow sporting events to be shown on a free-to-air basis. This has to be contrary to the public interest, as I suspect the Government, as well as the Committee, will agree.

The history of this anomaly goes back some years—in fact, back to the middle 1950s. At that time, with the creation of the new broadcast right, hoteliers in particular were keen to ensure that they would not have to pay a fee to enable television broadcasts to be viewed by members of the public at a hotel or guesthouse. The eventual enactment of provisions to exempt broadcasts to an audience where no fee was paid was seen as a vindication of the rights of what became known as the "Scarborough landlady". This phrase was used by politicians at the time to describe the type of person who might have a television lounge in her premises and who would not wish to pay for the ability to show broadcasts to residents.

The noble Baroness, Lady Wilcox, finds this humorous. It is humorous, of course. We find ourselves in a ludicrous position, and I hope that the

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Minister, who said that she would be making some concessions, will make a concession on this matter.

In other words, the Government recognised and wanted to protect exploitation that by its very nature was incidental and inconsequential.

But the situation for racing cannot be described as inconsequential. It is estimated that for horseracing alone the value of the rights is a minimum of 3,250,000 per annum across the industry. Indeed, certain races—the Epsom Derby, which will be at the end of this week, and the Aintree Grand National, being two of the main ones—are clearly viewed to be of such national importance that they are listed events, and therefore virtually mandated to be broadcast on terrestrial television.

Annual betting turnover on the Grand National alone is in the region of 100 million. Betting shops may show the picture of the race free of charge whereas if the race were sold to a pay-TV operator they would have to pay a realistic market price for the right to make a commercial profit out of the pictures. That is surely unreasonably prejudicial to the legitimate interests of Aintree racecourse, for example. The same applies to the other 800-odd terrestrially televised races, which are high-profile, quality events generating significantly higher levels of betting turnover than lesser races and likely to contribute higher levels of profit to the bookmakers as a result.

It is fair to say that, as one would expect, there is no settled agreement between horseracing, bookmakers or broadcasters. In recent times, the whole area has been fraught with many problems, which have caused a great deal of dissent. I do not think there is any particular feeling by bookmakers that it is unjust to correct the anomaly addressed in the amendment. We suggest that there are good arguments for the Government to re-examine seriously the situation. Clearly, we have arrived at neither a logical nor a fair position.

There is unlikely to be another opportunity for the anomaly to be addressed in legislation in the foreseeable future. Therefore, as an alternative, the Government could offer to table their own amendment to allow the changes to be made at a future date, by order, perhaps, and with the agreement of all concerned. I beg to move.

Baroness Buscombe: I support the amendment, which, as we understand it, means that if a horserace is shown on television in a betting shop the owner will have to pay for that privilege. That seems to make sense. The copyright in a horserace belongs to someone; it can be owned. We can think of no reason why someone who runs a betting shop should have the right to take something owned by someone else simply because nobody is charged for admission to the betting shop. The fact that there is no charge for admission is irrelevant because the punter pays one way or another, but not by paying to get in. Bookies are making money out of punters and I can see no sensible reason why they should not pay for the privilege of showing a

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horse race in order to encourage more punters to come in. Bookies are not a special case. We should clarify the clause to make it clear that they are not entitled to disregard the ownership rights of those to whom the copyright belongs.

I hasten to add that I do not make any moral judgment; nor do I seek to prejudice bookmakers in favour of copyright owners. But a balance must be struck somewhere. There seems no reason why bookmakers should not pay the owners of copyrights for using copyright materials. It is as simple as that.

Lord Davies of Oldham: I ask the noble Viscount to withdraw the amendment. While having some sympathy with the case that he puts concerning what he regards as an anomaly, I do not regard the situation as an anomaly. He says it is an anomaly that, if a broadcast is made by Sky or a cable broadcaster, the racing fraternity can reach an arrangement on that broadcast and get paid for it, but, if it is free to air on the BBC or independent television, they cannot. That is not an anomaly; the same case applies to ordinary members of the public when watching television in their own homes. When the public enter a different place from their own home, such as a betting shop, they watch television on the basis of a licence fee having been paid and there is free access to television.

Why should betting shops fit into a particular provision? The noble Viscount says that it is because of an anomaly and that we should deal with it on the basis of the change to copyright royalty. But he will recognise that our reason for having copyright legislation is to protect intellectual property, and it is right that we should do so. If the investment in its creation is protected by copyright restrictions, it means that broadcasters can, for example, obtain royalties from making and selling videos of programmes and granting re-broadcasting rights.

However, it is not the broadcasters who are lobbying for this amendment. We have not had representations from broadcasters. The noble Viscount indicated that pressure comes from a particular interest; namely, those concerned with horse racing. I am not in any way, shape or form against the horse racing fraternity seeking to increase resources to enhance its sport. But I suggest that it is an inappropriate way to try to tackle the issue of additional resources. It is suggested that there should be change to copyright. That is not the issue; nor have the broadcasters ever thought that it was.

If I may be so bold, I am prepared to give the noble Viscount a hint as to where progress may be made. If the broadcasters were concerned, they could make representations on the matter. We have received none thus far. They could do so not by getting in touch with the DCMS but with the Department of Trade and Industry, the department concerned with copyright law. We have seen no reason why, within the framework of this Bill involving issues of broadcasting, we should address ourselves to that matter. We recognise that so far as concerns the

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industry there is a case. At this stage we are by no means convinced that it is an issue about copyright law. That case needs to be established.

I welcome the airing of the issue. I can only say at present that we do not regard our present proposals as producing an anomaly within the law. The important issue of free broadcasting is a cardinal point. I hope that the noble Viscount will recognise, therefore, why I ask him to withdraw the amendment.

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