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I am not quite sure why we bother to sit and debate any laws at all if the Front Benches in another place can get together and put whatever they like into a bit of legislation. That is for another time and another place. I have always found the whole area of wash-up very troublesome, particularly as a Cross-Bencher who does not get a look-in at all. I have seen some very funny things going through. When I see two Front Benches colluding, I usually think that we are in trouble.

With all those caveats, I welcome the Minister's movement on this clause. I hope that what they propose will look good. I hope that he has listened to what I said about the super-affirmative procedure and that they would insert something like that so that we could have proper parliamentary scrutiny. I beg leave to withdraw the amendment.

Amendment 15 withdrawn.

Amendments 16 to 23 not moved.

Clause 20 : Appointment of manager of internet domain registry

Amendment 24

Moved by Lord Davies of Oldham

24: Clause 20, page 26, line 16, leave out "any" and insert "one or more"

Lord Davies of Oldham: The Government accepted an amendment tabled in Committee by the noble Earl, Lord Erroll, when he sought to ensure that all the directors of a registry were not unnecessarily replaced by the manager. We agree that some directors might be on the side of the manager and that therefore it would be useful to retain their expertise, which is the burden of the noble Earl's contribution and amendment.

On reflection, we agree that the current text is unclear and could be read as meaning that we would replace either one director or the whole board. Therefore, we have tabled this small amendment merely to clarify the fact that the manager could retain the expertise of one or more directors if he so chooses. I beg to move.

The Earl of Erroll: My Lords, I added my name to this amendment, which shows perfectly what Third Reading is for. I was delighted that the Government accepted my amendment at the previous stage and saw that in principle it was good. But, quite rightly, they have spotted that it could be improved. With that, I am delighted to welcome the improvement and I thank the Minister for moving it in such a kind way.

Amendment 24 agreed.



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Clause 39 : Payment for licences

Amendment 25

Moved by The Earl of Erroll

25: Clause 39, page 46, line 35, after "licence" insert-

"(i)"

The Earl of Erroll: My Lords, unfortunately, I have left my notes on this amendment downstairs because I was in rather a rush. From what I remember, it concerns a mismatch as regards spectrum and the spectrum cap. Spectrum released under the spectrum cap can be paid for in certain ways, but spectrum can also be divested voluntarily or under another arrangement. I sent a note to the Minister and the Bill team about this. There seems to be a mismatch between the two. In proposing these amendments, I am trying to be helpful and I hope that the two things will be brought into line. It would tidy up something which could otherwise be a block to the reallocation of spectrum in a sensible way. I beg to move.

Lord Davies of Oldham: My Lords, I am grateful to the noble Earl, Lord Erroll, for being more explicit in the note which he delivered to the department than he has been in proposing the amendment. We know exactly the point at which he is driving, although we are going to ask him to withdraw his amendment. I hope that he will listen carefully to the reasons why, because we have given it the fullest consideration.

Included in the Government's spectrum proposals, now before Parliament, are temporary spectrum caps that apply to the planned combined auction of 800 megahertz and 2.6 gigahertz spectrum. These caps are designed to ensure that the acquisition of valuable spectrum is spread more equitably between existing operators and new entrants. In certain circumstances, operators may therefore have to release existing spectrum to be able to bid in the combined auction. In those circumstances, costs will be incurred by the releasing operator in clearing their released spectrum. To offset these costs, it is proposed that additional payments are made by any operator acquiring this relinquished spectrum to the operator releasing it.

At present, this additional payment relates only to spectrum released in order to stay within the limits of the caps. However, these amendments would extend that payment to any spectrum released into the combined auction. In particular, it would potentially include spectrum being released by T-Mobile and Orange, required by the European Commission as one of the conditions necessary to gain its approval for the joint venture.

In effect, these amendments would allow the joint venture to receive a payment from another operator to subsidise the cost of its obligations to the European Commission, which we do not consider to be reasonable. The two companies involved are likely to benefit considerably from the joint venture. Indeed, they would scarcely have thought about it and have embarked upon the venture if that were not the case. But there are costs associated with the joint venture and in obtaining the approval of the Commission it is only

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right that those costs are borne by the operators concerned and not by any other operator which will not benefit from the venture. That is why the Government have taken the position that they have. I hope that the noble Earl will feel that that is reasonable and that he can safely withdraw his amendment.

5 pm

The Earl of Erroll: My Lords, I thank the Minister for that extremely informative and useful reply. I now understand that this is quite a complex issue, and as usual it is like an onion-there are layers within layers. I fully understand the Government's reasoning. I beg leave to withdraw the amendment.

Amendment 25 withdrawn.

Amendment 26 not moved.

Clause 43 : Extension and regulation of licensing of copyright and performers' rights

Amendment 27

Moved by Lord Davies of Oldham

27: Clause 43, page 52, line 14, leave out "(within the meaning of section 116)"

Lord Davies of Oldham: My Lords, this group of clarifying amendments is intended to tidy up drafting and correct unintended errors in this clause.

Amendment 27 has been inserted because "copyright licence" is now defined for new Section 116B by Amendment 31. The wording deleted by this amendment is therefore superfluous. Amendment 35 makes a corresponding change to performers' rights. Amendment 32 inserts the words "by regulations" with the effect that the requirement to adopt codes of practice will indeed be by regulations. Amendment 39 removes the words "in accordance with regulations", this is to ensure consistency with the definition of orphan works in new Section 116C of the Copyright, Designs and Patents Act 1988. Amendment 40 has been tabled so that the sources searched to determine whether a performer's property right is orphan are sources which are likely to have details which can help trace the ownership of these rights. Amendment 41 corrects an error-the provision is dealing with performers' rights and not copyright works, so the reference here should be to "recordings" and not to "works", the amendment makes that necessary corrective change.

The substitution of "copyright owner" with "copyright interest" in Amendment 42 is again necessary because the provision is dealing with performers' rights and not copyright. Amendment 43 corrects a cross-reference. Amendment 33 applies the definition of "member" inserted by Amendment 31 to Schedule A1 to the copyright Act and finally Amendment 44 applies the definition of "member" in Schedule 2A to the Copyright Act where Schedule A1 applies for the purpose of paragraphs 1A to 1D of that schedule.

It will have been deduced by the House that these are technical and necessary amendments and I beg to move.



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Lord Clement-Jones: My Lords, I briefly rise to recognise that these are drafting amendments. I very much hope that the Government's mind is still not completely closed under Clause 43 generally, and I mean in respect to the orphan works provisions. Clearly, there are issues which photographers are still very cognisant of. It would not be in order for me to put down amendments again on that area but I hope the Government will consider this in another place.

Lord Davies of Oldham: That is a good try by the noble Lord. Here I am dealing with technical amendments and there he is opening up the whole operation of wash-up. Let us be clear about wash-up-and I hear what the noble Earl, Lord Erroll, said just a few moments ago. I cannot really help him about the extent to which he, as a Cross-Bencher in the upper House, is able to influence the democratic will that will be largely exercised, he will not be surprised to hear, at the other end.

It is the case that there will be clarification of these issues and full debate, we trust, on Second Reading. If the noble Lord, Lord Clement-Jones, has got his way and the election is in June-of course, he might well be right- then we will have a great deal more time in the Commons for more stages of this Bill to be considered. If we assume, however, that we do not have too much time and that there may only be a Second Reading, of course the consequences of the deliberations through the usual channels with regard to wash-up will still need to be considered by both Houses.

The noble Earl, Lord Erroll, will fully understand that in those circumstances what will go forward is an agreed position between the parties and that therefore the obvious expectation will be that the process in the Chambers will be a relatively straightforward exercise. That is the concept of wash-up. I only say to the noble Earl, Lord Erroll, he might not like it but the alternative is that every Bill that has not completed all its processes would utterly and totally fall. I am quite sure he would regard that alternative as even more unacceptable than the concept of wash-up.

Amendment 27 agreed.

Amendment 28

Moved by Lord Young of Norwood Green

28: Clause 43, page 52, line 21, at end insert-

"( ) The regulations must provide for the factors to be taken into account in deciding whether to authorise a licensing body to grant copyright licences in respect of works to include-

(a) the likely effect of the authorisation on-

(i) authors of the works,

(ii) members of the body,

(iii) copyright owners on whose behalf the licensing body would be entitled to act pursuant to the authorisation, and

(iv) licensees and potential licensees of the aspects of copyright that would be the subject of the authorisation, and

(b) the extent to which the licensing body is entitled to negotiate or grant copyright licences in respect of similar works, other than under an authorisation under this section."



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Lord Young of Norwood Green: My Lords, during our debate on Report, I agreed that the Government would consider Amendments 155A and 155B tabled by the noble Viscount, Lord Bridgeman. The Government had always intended that extended licensing schemes should be run by representative licensing bodies. While we were not able to accept the drafting of the amendments tabled on Report for reasons I will explain, the government amendments in this group achieve a similar effect.

Together, this group of amendments prescribes that the regulations must require that certain factors are taken into account before a licensing body's application to carry on extended licensing is granted. These factors are, first, the likely effect of the authorisation on authors, rights holders, licensees, potential licensees and members of the licensing body applying for authorisation. This list is not exhaustive. The amendment will ensure that the interests of all those potentially affected by an authorisation under proposed new Section 116B of the Copyright, Designs and Patents Act 1988 will be properly considered before a decision to authorise is taken. I hope noble Lords will agree that this achieves the purpose of that Amendment 155A.

Paragraph (b) of Amendment 28 requires consideration of the extent of the applicant licensing body's existing repertoire before any extension is allowed through authorisation under proposed new Section 116B. This would require consideration of the extent to which the body was already acting for the copyright owner-that is, the extent to which it is representative of copyright owners in that class of works. It is designed to tackle the same ground as did Amendment 155B. There are corresponding amendments for performers' rights.

In exploring the amendments proposed by the noble Viscount, Lord Bridgeman, we encountered difficulties in having the requirement for the agreement of the majority of copyright owners in the Bill. There is no constant from which a majority can be defined as the number of works protected by copyright-and, therefore, the number of copyright owners-is constantly changing. The concept is also uncertain. We are doubtful that a simple majority would be in all cases equivalent to the critical mass of representation which the Government envisage would be required to extend a repertoire. We encountered the same problem with the concept of "substantial" in relation to Amendment 155B-this also applies to today's Amendments 29 and 37-that is, its application is unclear.

Amendment 30 requires the Secretary of State to be satisfied on a number of things in relation to any licensing body applying for an authorisation to carry on extended licensing. The government amendments already require the Secretary of State to consider the representativeness of a licensing body before granting an authorisation. There is also now a requirement for prior consultation on the criteria for authorisation in proposed new Section 116F(4) of the copyright Act. There is equivalent provision for performers' rights.

The government amendments also require the interests of member and non-member rights holders affected by an application for extended licensing to be taken into account before the application is granted. This may be achieved through consultation.



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On fiduciary duties, licensing bodies are generally given mandates by their members. It follows, therefore, that they should already be acting in the interests of their members. The Government would certainly expect any well-run licensing body to be doing so. Where this is not the case, the Secretary of State can require a licensing body to adopt a code of practice. I hope that in the light of this explanation the noble Lords, Lord Razzall and Lord Clement-Jones, and the noble Viscount, Lord Bridgeman, will not move their amendments.

We have managed to find a workable solution which addresses the issues raised on Report in Amendments 155A and 155B, and those raised in Amendments 29, 30 and 37 today. I can assure the House that we absolutely agree that extended licensing should not be available in an area if it goes against the wishes of rights holders in that area. I hope that on consideration of the government amendments tabled today your Lordships will agree that we have managed to capture the spirit and effect of the amendments proposed by the noble Viscount, Lord Bridgeman. I beg to move.

Amendment 29 (to Amendment 28)

Moved by Lord Clement-Jones

29: Clause 43, line 2, leave out from "provide" to end of line 14 and insert "that no extended licence under a scheme authorised by subsection (1) shall be granted if a substantial proportion of copyright owners and of authors affected by such a licence object to it."

Lord Clement-Jones: My Lords, it is always slightly disconcerting to get an answer before you have asked the question, but I shall do my best to respond on the hoof to the Minister's statements. I took my basic text-I do not think that he has deviated very strongly from it-from his letter to the noble Viscount, Lord Bridgeman, of 11 March. I think that the Minister was exercised by the phrase "the majority of copyright owners". He raised a number of points in the letter that were similar to what he has said today as regards authors not always being copyright owners but perhaps having an interest in the outcome of an application for extended licensing and the Government not believing that a simple majority would be equivalent to the critical mass of representation required. He said that including the concept of the majority of copyright owners in the Bill would not be right and that he had encountered the same problem regarding the concept of "substantial" in relation to Amendment 155B.

I understand some of those issues. However, the amendments that the Minister has put down may be similar in effect-the Minister used that phrase-but are not the same. In particular, the phrase,

is somewhat vague. Does it specify only factors to be taken into account before authorising a body to grant licences, or does it require consultation before an already authorised body grants a particular licence to a particular user? Certainly, many of those affected by these extended licences believe that both are required.

We disagree about the legal impact of "substantial proportion" in Amendments 29 and 37. Contrary to what the Minister thinks, we believe that these give

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clear instructions to the drafters of the regulations. For instance, in the context of the Copyright, Designs and Patents Act, "substantial proportion" has a clear meaning-for example, through judicial interpretation of Section 16. Therefore, we have a drafting legal issue but the more substantive point is that we do not believe that the government amendment fits the bill. I beg to move.

Viscount Bridgeman: My Lords, I again declare an interest as a non-executive director of the Bridgeman Art Library, a photographic archive. I am most grateful to the Minister for his very comprehensive letter to me, to which the noble Lord, Lord Clement-Jones, referred. I join with the noble Lord in feeling that the Government's amendment does not entirely fulfil their undertaking. There is too big an element of consultation and not enough of mandatory provision in it. Amendment 30, in my name, addresses the consent of authors, performers and licensees to each licence granted. This is an area in which the government amendment is seriously deficient. I hope that the Minister will be able to reassure me on that point. It is not sufficient to rely-as the government amendment does-on consultation at the stage when a body seeks authorisation because, from the point of view of a copyright owner, an individual author or performer or of a person holding an exclusive licence in a work, the effects of an extended licence being granted to different licensees can differ. I borrow an analogy from the film industry. It is one thing for an authorised body to negotiate and grant a licence to, for example, the British Film Institute. However, the Minister's letter explaining the Government's amendment appears to suggest that it would be all right to issue the same licence to, for example, Odeon Cinemas. The views of authors, performers and other rights holders would very likely differ on that point and should be taken into consideration when granting each licence.

Having said that, this group of amendments addresses a point with which I am sure the House is basically in agreement. I hope that the Minister will be able to reassure me on the points that I have raised.

5.15 pm

Lord Howarth of Newport: I welcome government Amendment 28, which is the Government's response to the important points powerfully put forward in Committee by the noble Viscount, Lord Bridgeman, and the Liberal Democrat Front Benches. It is clear that the Government's proposition in the amendment does not command complete assent from the other side of the House, but it none the less represents an advance.

This is an instance of the excellent quality of scrutiny that the Digital Economy Bill has received in your Lordships' House. I expect that, in a very few minutes, we shall send it to another place, but I do not have the same confidence that it will receive the same quality of scrutiny in the House of Commons; indeed, my noble friend Lord Davies just now anticipated that it was improbable that the Digital Economy Bill would proceed beyond Second Reading there.



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I was startled by what my noble friends Lord Young and Lord Davies said about the wash-up, those negotiations between the Front Benches of the parties in the dying days of a Parliament before it is dissolved. I would like at least substantial elements of the Bill to go through on to the statute book, in particular Clause 43 as amended by the Government. We must contemplate the possibility that the view will be taken, as at the end of previous Parliaments, that measures contained in Bills which have not received a Committee stage in both Houses of Parliament should not be permitted to go forward on to the statute book. I would from the point of view of the need for this legislation be sorry if that were to happen, although I also recognise that there are important constitutional arguments as to why it should.


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