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I hope the House will feel that the Government have acted in the most able way they could to deal with what is undoubtedly a most unfortunate but, so far as we can identify, unique occurrence.

Bill read a second time and committed to a Committee of the Whole House.

Digital Economy Bill [HL]

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Explanatory Notes
2nd Report from the Delegated Powers Committee

Committee (3rd Day)

4.02 pm

Clause 4 : Obligation to notify subscribers of reported infringements

Amendment 59

Moved by Lord Clement-Jones

59: Clause 4, page 6, line 27, at end insert-

"(4A) An internet service provider may recover costs, reasonably incurred in sending a notification report under this section, from the copyright owner.

(4B) A copyright owner may dispute the charge levied by the internet service provider under this section by appeal to OFCOM on the grounds that the charge does not represent costs reasonably incurred in sending the notification."

Lord Clement-Jones: My Lords, just in case anyone is confused, I have agreed to move the amendments in the name of my noble friend Lady Miller of Chilthorne Domer today; sadly, she cannot be with us. We on these Benches very much think that the amendments should be considered.

In moving Amendment 59, I shall also speak to Amendment 77. The amendments are the first of a series with which we will deal today that relate to costs. As the Minister knows, there is considerable discussion about this aspect. Indeed, I see that the Government, in anticipation of today's debate, have published a draft online infringement of copyright order, dealing with initial obligations and sharing of costs. That is extremely timely.

The big issue is the allocation of costs between internet service providers and the copyright holders. I have not had a great deal of time to look over the draft order. Although the Government have further work to do with consultants on the methodology for splitting

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costs and so on-I hope that the Minister will give us an idea of the process involved-they seem to be allocating costs 75 per cent one way and 25 per cent the other. Many in the ISP community might think that that is rather an unfair allocation. I will be interested to hear what the Minister has to say about that. If I were to put words into the mouths of the ISPs, I think that they would say that the copyright owners will largely be the ones to benefit from these processes and so the ISPs should bear a lower cost-or at least only half the cost-compared with the copyright owners. I am sure that we shall be batting these concepts back and forth. We have our own Front Bench amendments to come, when my noble friend Lord Razzall or I will make the case at rather greater length. In the mean time, I beg to move.

Lord De Mauley: My Lords, this is the first of many groups dealing with the knotty question of the division of costs. The amendments in this group look at the costs of sending out the notification letters and compiling the copyright infringements lists, which is a good place to start. However, the question at the moment is left open. As the noble Lord, Lord Clement-Jones, mentioned, this morning the Government brought out a draft statutory instrument on the division of costs to tackle that issue. From my initial study, it appears to apportion 75 per cent of the costs of Clauses 4 and 5 to copyright holders and 25 per cent to ISPs. The costs of Ofcom's administration and the appeal tribunal are similarly divided. That is a considerable shift from the Government's original thought of dividing most costs 50:50.

One area in which the draft SI has not helped us is in giving more information on the estimates of what the costs actually will be. Currently, we have available several different estimates-the Government's impact assessment, which is soon to be supplemented by another report on costs, as well as numerous external industry-commissioned reports, some of which are still coming. Perhaps the Minister will enlighten us as to when the department will be able to produce more accurate figures for us to work with, or will the Government leave even that work to Ofcom for resolution after Royal Assent?

This draft SI raises a number of other questions. Having different fixed sums in respect of different categories of ISPs is an interesting concept, which merits further scrutiny, as does paragraph (5) of Article 4, which sets out what costs cannot be included in the sum for division. However, with such a short time to absorb this document, perhaps we could await the Minister's response to these amendments. Fortunately, a few more opportunities are coming up to debate the appropriate division of costs later in Committee. The debate on this group of amendments, as well as the draft SI, will do much to inform them.

Lord Davies of Oldham: My Lords, I very much agree with the closing remarks made by the noble Lord, Lord De Mauley. The issue of costs applies to later amendments, too, so I would not want us to be too hung up on the ratios at this stage. That is why I will ask the noble Lord, Lord Clement-Jones, to withdraw his amendment. However, I am grateful to him and the

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noble Baroness, Lady Miller, who tabled the amendment, for raising this issue. It will be appreciated by the Committee that we are not talking about an exact science with regard to the allocation of costs. A great deal of consultation and more work have to be done on this. We will be able to debate these issues further on subsequent occasions.

As the Committee will appreciate, both noble Lords made reference to the fact that we have made available a draft statutory instrument under Clause 15, which we hope will give a sense of how we consider the contributions from copyright owners to the costs of ISPs, as well as the other costs arising from Clauses 4 to 16, might be calculated. We will have plenty of time to discuss these issues later.

The noble Lords pressed me on when we will reach a position. We will need to consult in preparation for the statutory instrument, which needs to be delivered in the spring, so we have work to do. Noble Lords have rightly seen from the draft that it is our view that the majority of the costs should be borne by copyright holders. Our working assumption in the draft is that copyright holders should meet 75 per cent of the costs and others should meet 25 per cent.

As I say, this working assumption is the basis on which we can take the issue further. A number of amendments are already tabled for later in the Bill and it is clear that there are areas in which the issue of costs needs to be debated further. I hope that in our response noble Lords will see that we are seeking to advance the debate, but we have not reached a final position yet. The debates that are bound to obtain later in Committee will develop the issue further. On that basis and with those assurances, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Clement-Jones: My Lords, I thank the Minister for that response and I thank both him and the noble Lord, Lord De Mauley, for correcting me: it is the other way around-25 per cent for the ISPs and 75 per cent for copyright holders. That is certainly something that the ISPs will be more content with and I suspect that, in all justice, it is what the copyright holders will agree to in the end. I note that the percentages are in square brackets, so I assume that the Government will take a view on the final figures when they have looked more closely at the expected costs and then go nap on the split of the percentages.

The remaining issue is how comprehensive the order will be. I note that it just talks about the initial obligations, so I assume-perhaps the Minister will nod his assent-that a new, more appropriate order will be passed as and when any technical measures are taken. There will need to be a technical obligations code governed by a new order on the costs appropriate for enforcing, if you like, the technical obligation. That new raft of proposals will come into effect only after an Ofcom report and when the technical provisions come into effect.

Lord Davies of Oldham: My Lords, it has been suggested that my physical nod of the head was not overt enough, so I am saying yes to the noble Lord's question.

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Lord Clement-Jones: I thank the Minister. Clearly he needs to develop a more assertive nod of his head. However, that is very helpful. When we examine the terms of the order, we need to make sure that both we and the industry believe that it is sufficiently comprehensive to cover pretty much most of the expected costs. I assume that the consultants will also take a view on whether this is a reasonably comprehensive list of the anticipated costs. On the assumption that that is correct, and without the Minister's nod, I beg leave to withdraw the amendment.

Amendment 59 withdrawn.

Amendment 60

Moved by Lord Lucas

60: Clause 4, page 6, line 30, after "a" insert "named"

Lord Lucas: My Lords, in moving Amendment 60 I shall speak also to Amendments 61 and 62. Amendment 63 appears to have fallen into this group from elsewhere and I am not sure whether the noble Lord will choose to reply to it.

These amendments serve to open discussion on this subsection, which concerns the notification that is to be sent from an internet provider to its subscribers. This is an enormously important document. The Government are setting out to persuade some 7 million of our citizens to mend their ways with the hope, presumably, that something close to 90 per cent will eventually do so. The document, one that a very large number of people will receive, needs to be carefully crafted. It should be nothing like those sent out by the BBC when you are suspected of not paying your licence fee. That is because, by and large, people know that they are supposed to pay the licence fee. They may have a good reason for not doing so, but they know that they are supposed to pay it.

This document will be sent to a lot of people who do not know that the infringement is happening, because someone else in their household is doing it, or, if they do know, they will think that it is the ordinary way of the internet: everyone has been getting away with it, so why not? This is the beginning of a process of education, so the document needs to be full and should not leave a lot of stones unturned. In particular, it should say who the copyright owner is and it should be fulsome in its description of the infringement and the evidence for it. People will need to know what they are suspected of doing, under what circumstances and what the evidence is.

The noble Lord was fulsome in his criticism of the activities of certain firms of solicitors who at the moment claim to know about copyright infringement as a result of downloading. Their letters are threatening in tone and extremely short on detail. This letter must be nothing like that; it must be supportive and encouraging and contain all the information, or a reference to it, that the person accused of the infringement needs to know. If the letter comes as a bit of a shock, that person must at least find that all the help that they need is there. I beg to move.

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4.15 pm

Lord De Mauley: My Lords, these are useful amendments designed to ascertain the level of detail required in a notification from an internet service provider to a subscriber. It is important that the level of evidence is as detailed as possible and that the subscriber is given a full description of his apparent infringement. Without complete and detailed information, it may be difficult for the subscriber to identify exactly who is responsible for the copyright infringement or to establish whether an error has been made or an appeal is appropriate. We hope that the Minister can assure the Committee that these notifications will contain everything that a subscriber will need to make an appeal. It would be useful, at least, if the Minister could confirm whether a subscriber will be sent the copyright infringement report that has been made against him.

The Earl of Erroll: My Lords, I support these amendments. We heard earlier in Committee about bullying tactics being used already in certain jurisdictions in order to get people to pay up. If the matter is couched in vague terms, that makes bullying tactics easy, so the more detail there is the better. In that way we should avoid misuse of these powers.

The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Lord Young of Norwood Green): My Lords, the purpose of Amendment 60 is to require that the notification sent to subscribers should specify the name of the copyright owner making the allegation. I understand the thinking behind the amendment as there is some justification in ensuring maximum transparency at this stage and a subscriber alleged to be infringing copyright on-line is entitled to know the details of the allegation being made against them.

However, the existing test provides that transparency without needing to specify that it relates to a named copyright owner. The code provides the flexibility and ability to ensure that the information subscribers need is included. Clause 8 states that the code must set out,

The key information for a subscriber is to know why they are in receipt of such a notice, what it relates to and the evidence supporting the allegation of copyright infringement, all of which is already required.

The purpose of Amendments 61 and 62 is to require that a notification sent to a subscriber should contain, on the one hand, a "full" and, on the other, a "detailed" description of the alleged infringement rather than only a "description" of it. While I sympathise with the wish to ensure that those in receipt of such notifications get the full picture, I do not believe that either of these amendments is necessary. It would challenge most of us to explain, in ways that hold water legally, the difference between a "description", a "full description" and a "detailed description" and I do not see any advantage in passing on that conundrum to those who will be responsible for writing the notifications. I cannot readily see what criteria will be employed to decide whether a description was full or detailed enough, and the existing text is fit for purpose.

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I wholeheartedly concur with the concerns of the noble Lords, Lord Lucas and Lord De Mauley, and the noble Earl, Lord Erroll. We are aiming for transparency and to ensure that people fully understand at this stage the nature of the allegation, the copyright infringement and so on. However, these matters will be dealt with fully in the code. I stress that both copyright owners and internet service providers will have to comply with the initial obligations code. The noble Earl, Lord Erroll, was concerned about bullying. They will not be able to get away with some vague allegation; it will have to be nailed down and comply with the initial obligations code. The contents of the code are dealt with in Clause 8. It will have to includes provision about the standard of evidence of infringement needed for the copyright infringement report. An internet service provider cannot be required in fairness to give more information about an apparent copyright infringement than is given to them by the copyright owner. The code will include provision as regards the contents of the subsequent notification by the internet service provider to the subscriber.

The final amendment in the group, Amendment 63, would not change the elements that must be included in a notification to a subscriber, merely the way in which those requirements are expressed in the Bill. I must admit that it is unclear what is intended by the amendment.

I offer the assurance that we concur with the concerns expressed about the importance of getting the first notification right. The noble Lord, Lord Lucas, assumed that any advertising campaign would be aimed at some 7 million people; I think that that is a worst-case-scenario prediction. We have said all along that we are trying to change behaviour. Many people will not necessarily know-I must admit that, until I checked with certain younger members of my household, I was not sure of the precise situation-but I think that people will become more aware.

A copyright infringement requirement may not necessarily be clear to a subscriber, which is why the Bill specifies what information they need. Our intention is to meet the concerns expressed by noble Lords and to have notification that is transparent and fit for purpose, making absolutely clear the substance of the allegation, the proof of the apparent copyright infringement and the measures that individuals can take to protect themselves in cases where the infringement may have been committed by somebody piggybacking on their broadband connection. The purpose of the initial notification is not to be in any way bullying; it is about being helpful to people, and attempting to change behaviour. I think that people will in many cases respond to that, although I accept that the proof of the pudding will be in the eating. With those explicit assurances in relation to what the code will contain-we have sent out an initial draft; there will be more to come as a result of consultation-I hope that the noble Lord will not press his amendments.

The Earl of Erroll: It may be helpful to the Minister to point out that Amendment 63 should perhaps have been grouped with Amendment 64, because if you

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leave out lines 35 and 36, you need to put the "and" at the end of the previous line. I suspect that it has just been misgrouped.

Lord Lucas: Which I suspect is my fault. I am sorry for leaving the Minister with that conundrum.

I entirely accept what he said, although I am puzzled-perhaps I misunderstood him-that he is resisting the first amendment in the group, that the copyright owner should be "named". It is an important part of the allegation of trespass that one should know that the person alleging the trespass owns the copyright that they claim you have infringed. To be told that you have trespassed on copyright, but not to be told whose copyright, leaves you with an incomplete ability to defend yourself. I am therefore surprised that the noble Lord thinks that my first amendment should be resisted. Perhaps I can leave him to think more on that and, for the moment, I beg leave to withdraw it.

Amendment 60 withdrawn.

Amendments 61 to 63 not moved.

Amendment 64

Moved by Lord Razzall

64: Clause 4, page 6, leave out lines 35 and 36

Lord Razzall: This is a relatively small amendment to Clause 4, which deals with the insertion of a new clause in the Communications Act 2003 on the notifications that must be given by copyright owners to the ISP and by the ISP in response to the copyright infringement report. Subsection (5) of new Section 124A contains the detail of what needs to go into that notification. Subsection (5)(f), which is set out in lines 35 and 36, is probably inappropriate in the notification by the ISP. An alleged infringement will have occurred either through the use of someone's personal computer, or other form of computer or through the use or exercise of a subscription under mobile broadband networks. Paragraphs (a) to (e) and paragraph (g) would apply to all forms of infringement, whatever mechanism was used, but paragraph (f) would not apply to all forms and would only seem to apply if the infringement was by the use of wi-fi technology. The amendment suggests that paragraph (f) should be deleted and would fit better within the code.

Lord De Mauley: My Lords, I shall just speak on the amendment to put on record once again the concern that we share with the noble Lord, Lord Razzall, that a subscriber may not have sufficient protection from action being taken against him as a result of copyright infringement taking place on his internet account by an unauthorised user who has hijacked it. Providing advice on how to protect a network after an allegation has been made is a crucial part of stopping such hijacking.

Lord Lucas: My Lords, I am not sure that I agree with the noble Lord, Lord Razzall, on this issue. I think that we probably need rather more here. I had some very helpful discussions with the Bill team on some technical aspects of the Bill, for which I thank the Minister. Clearly, with wireless access, giving people a primer on how to get basic protection on their wi-fi

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is going to be important. Most of us just buy a router and plug the thing in and do not want to get involved with what is going on in the middle of it. To follow on from something that the noble Lord said on the last day in Committee, if we are to implement something like voluntary blocking of peer-to-peer sites to ensure that your own internet network cannot infringe, some quite sophisticated instructions will be needed, simply put, on how to get that blocking up into the router. It is not much good if it is just in the computer and the other person doing the infringement is some other member of the family sitting on a wireless network. That will take some doing and will take some sponsorship by the Government or Ofcom of one or more commercially available but relatively cheap programmes to make this something that is simple and easy for the customer. It will be quite a delicate thing to do.

My own view is that we should not ask ordinary customers to do something that would take them more than an hour or so in order to get their system secure. Setting wi-fi to WPA2 is easy enough, but instituting the sort of blocking that the noble Lord referred to is more complicated. We will also need the industry-I cannot imagine the Government doing it-to volunteer a selection of names of sites that might be blocked; you cannot expect the individual consumer to select these sites. So there is a lot to go in here.

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