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This law is ultimately not enforceable in the sense that it will get rid of illegal downloading. The background to this Bill refers to 6.5 million illegal downloaders. My rather limited understanding of the teenage world suggests larger numbers than that and that the number of transactions which each of them could be accused of engaging in illegally will amount to hundreds of millions of individual transactions. You will only ever scrape the surface of that. As the noble Baroness, Lady Miller, has just said, those who are making serious money out of it will be able to engage in encryption and other ways to avoid detection and enforcement. I agree again with the noble Baroness, Lady Miller, that the Government should have chosen a different road.
There have been many references, including that of the right reverend Prelate, to this being the equivalent of theft. It certainly falls under the context of the commandment, "Thou shalt not steal". I am told by the noble Lord's officials, and I made the analogy myself, that technically it is not theft because, at present, it is enforceable through the civil courts and not the criminal courts. But even if we accept that it is theft, the shoplifters who steal the actual DVD, which is worth a lot more than the rights of an individual download to the rights holders, have a fair trial and are subject to due process. They do not receive a letter, but, at the first attempt of enforcement, they are subject to due process. However, in this system, due process enters the equation only at appeal stage and then as a result of strong counterlobbying by among others my own organisation. There is a real problem about the impact assessment and about how much you could actually recover for rights holders. The noble Lord, Lord Lucas, made the point that the £200 million -or the £400 million which is allegedly the figure the rights holders are missing out on-is a purely notional amount. If you actually enforce this and the downloading
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I recognise there ought to be some return to rights holders. I am not denying that. But I am saying that the way forward must be to develop education and alternative business models and technical models on the lines of iTunes and Spotify and the very many other-I think one noble Lord referred to 35 now-different providers in this field of legal downloading. They have higher quality, are easier to use, easier to do and are relatively cheap compared with illegal downloading.
Surely the main way forward should be to develop legal ways in which the interests of rights holders can be met and to which consumers can relate, not engaging in sanctions that raise serious issues of consumer rights and human rights. That is happening but it is happening slowly and, as other noble Lords have said, it is happening far too late. The main focus of this debate and the main focus of this Bill should be to develop those alternative measures. Instead, the headline of this part of the Bill regrettably is on sanctions. It is on criminalising people who are unwittingly engaged in downloading and it is setting in statute and through the regulations that Ofcom will be required to produce sanctions that are not proportionate to the loss to the original rights holders. They are not necessarily the original rights holders because, as the noble Lord, Lord Lucas, said, most of the rights are actually owned by monopolistic companies, not individual creative persons. The sanctions are disproportionate in the sense that not only is the individual who actually committed the breach of copyright likely to be affected but also his or her whole family and in some cases businesses. It is also not clear whether there are exemptions to this in relation to libraries and schools and institutions which provide multiple access on the same e-mail address.
You are not simply penalising the individual who breaches the copyright but a whole range of other people whose livelihoods may well depend on access and unthrottled access to the internet. I am profoundly concerned about provisions in Clauses 4 to 17. I accept very much that the Government have moved from the position which was originally being urged on them, principally by the industry. I am prepared to accept that the first stage of the process that they outlined, which places the duty on Ofcom to look at how we can develop more legal ways of provision, is sensible but that is the provision that ought to be the main part of resolving this problem, not the sanctions. I still have profound objections to the sanctions as they stand in stage two of the process.
I hope that we can look at some of these issues in Committee. We may be able to move the Government further towards emphasis on developing alternative business models and the introduction of a fair use provision in copyright law that would enable most users to escape from being criminalised and ensure that where sanctions still apply they are in line with the principles of law and of protection of the citizen which are normally central to the concerns of this House and rightly so.
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6.39 pm
Lord Clement-Jones: My Lords, first, I thank the Secretary of State for his lucid introduction to the Bill and pay tribute to the noble Lord, Lord Carter, who presides in a sense over some of his legacy today-although he thinks that it is just the beginning of a continuum of activity towards digital Britain. He always made the distinction between the plumbing and poetry involved in moving to digital Britain. I am afraid that my speech will be mainly plumbing, but some of the speeches today have demonstrated real vision and excitement about the prospects. I have certainly enjoyed enormously hearing today's debate.
We on these Benches broadly support the Bill and the four key objectives put forward by the Government-the creation of a competitive infrastructure, the protection and development of our creative industries, ensuring the continuing health of public service broadcasting, and the essential need for digital security and safety. This is a very skeletal Bill, however, which depends hugely on regulations and codes to deliver its intentions. There is not even a pig in the poke; the pig has not even arrived, in some cases. Our attitude to the Bill will be whether critical amendments are made, whether some of the crucial questions are answered and whether vital assurances are given by Ministers during its passage through this House.
I shall not go over all the ground trodden so ably by my noble friends Lord Razzall and Lady Bonham-Carter, but I want to highlight some of their points. First, we support the extension of the duties of Ofcom. However, we believe that the National Audit Office should have an extension of its powers to ensure efficiency among public service broadcasters. We also, like the noble Lord, Lord Fowler, believe that the BBC Trust has had its day and that the governance system for the BBC needs replacing. We need a proper public service broadcast regulator-an overarching regulator for all public service broadcasting.
My noble friend Lord Razzall set out very clearly the principles on which we support the Government's proposals on online infringement of copyright. Our position is that it is vital that creators have protection from those who infringe their copyright and deny them financial payment for their work. However, in the words of the chairman of UK Music, Feargal Sharkey:
"Our focus is not to disconnect, but to reconnect. To reaffirm and recognise the value of creative works, both to individuals and to the UK economy".
That is not a negative. Much was made today by my noble friend Lady Miller and the noble Lords, Lord Lucas and Lord Maxton, of the need for new models. Of course, there is a need for new models for creative exploitation, such as Spotify; we agree. But there needs to be a backdrop of protection for the creative industries to enable innovation to take place. That is the basic point. It is clear that if no action is taken the UK creative content industries will suffer massive losses in displaced content sales. Give or take the impact assessment that sets it all out, some of that might be overegging it slightly-but it is there or thereabouts.
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We broadly share much of the Government's intention in offering protection to creators while ensuring digital access for the public. However, we are very clear about the conditional basis of our support for the provisions in this Bill. First, the terms of the all-important initial obligations code must make it clear what those thresholds are. The thresholds must be proportionate and must not be set too low. We should know what they are before the Bill goes through the House. There are also potential problems, as my noble friend Lady Miller pointed out, for an internet access service that has to take responsibility for people using its system, such as an internet café, wi-fi router connections and so on. Who will be liable in those circumstances? Who bears responsibility? Will this kill off community wi-fi services and internet cafés? We must be very clear about the impact of this.
My noble friend Lord Razzall made the point about the concerns of mobile broadband providers. Particularly dangerous are the retrospective provisions set out in the Bill, whereby they may be obliged to build massive, expensive databases just against the possibility that they go over the thresholds and have to start notifying customers-in which case, they would need to retrieve all the past information. It is crucial that those retrospective provisions are taken out. It is also crucial under the initial obligations code that there are provisions that relate to the assessment of the quality of the data provided by rights holders. Many noble Lords have raised this issue in terms of the attribution of IP addresses to individuals. Who will ensure that this is of sufficient standard? Ofcom? An independent body? This is a crucial aspect.
Of late, we have seen a proliferation of lawyers' letters, acting for the pornography industry, as the noble Lord, Lord Lucas, pointed out, often against innocent people asserting copyright claims and threatening court action. Which? and others are right to raise these cases, but I hope that the provisions of the new code will obviate the need for this heavy-handed type of action.
Clause 10 gives the Secretary of State power to direct Ofcom to assess whether technical measures should be imposed, take steps to prepare for them and report to the Secretary of State. On these Benches we are deeply concerned that it does not explicitly say that the Secretary of State must wait for a year before beginning this assessment and preparation for technical measures to give adequate time to assess their effect. This should be only after a compulsory report from Ofcom.
As regards Clauses 12 and 13, and the contents of the technical measures code, there needs to be clarity on limits to the period of any account suspension or limiting, and we need clarity on the administrative body and the tribunal and appeal process and where the onus of proof lies. My noble friend Lord Razzall has raised the issue of sharing of costs. There needs to be much more about the equitable sharing of costs between the ISPs and the rights holders in the Bill.
Clause 17 is the most controversial clause in the whole of the Bill. There are many Henry VIII clauses in the Bill, but this is the most sweeping, and I see that Google, eBay, Facebook and Yahoo are also concerned
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- "for the purposes of preventing or reducing the infringement of copyright by means of the internet".
The argument is that the Secretary of State needs to respond to new technological developments. But the Secretary of State could completely rewrite the law of copyright relating to the internet without any primary legislation. There has been no urgency displayed by Ministers in implementing many of the Gowers committee recommendations even in this Bill, despite the opportunity to do so. It would be quite wrong for copyright law in the digital era to be exclusively dealt with by secondary legislation in such a sweeping way.
I understand that the reason for this provision is so that the Government can deal with the enforcement of copyright against so-called cyberlockers which do not involve P2P file-sharing as such. But if this is the intention, why not put it in the Bill? Why is it not an amendment to the Communications Act rather than the Copyright Act 1988?
In other parts of the Bill, powers in relation to internet domain names on the face of it look like a perfectly reasonable provision. But I was very interested to hear what the noble Lord, Lord Lucas, had to say. Can the Minister clarify whether the provision has been notified to ICANN and what its response has been? After all, that is the global independent body responsible for the security and stability of the internet. What advantage does it see in having these provisions in UK domestic law?
My noble friend Lady Bonham-Carter has made our views positively clear on the extended remit for Channel 4. But as the noble Baroness, Lady Howe, said, where is the finance going to come from for this extended remit? We heard about a £100 million deficit for Channel 4 coming down the track-where is the additional subvention going to come from? We all need to know whether there are answers to that, and I know that the noble Lord, Lord Carter, laboured long in the vineyard trying to put together various solutions.
I come to ITV. As my noble friend Lady Bonham-Carter also said, we are very much in favour of these provisions, which reduce the regulatory burden on Channel 3, or ITV. We are also in favour of the new pilot projects for IFNCs starting in Scotland, Wales and the Tyne Tees and Borders ITV regions next April. It seems peculiar, however, that there have been no decisions on continued funding. Surely, to start those trials without a clear idea of where the future funding will come from, once the full rollout takes place, is going to be a big mistake. It is building up false expectations if that funding cannot be provided in future.
I put another marker down, as my noble friend did, that we would not support top-slicing to support that particular aspect of additional independent news provision on ITV. My honourable friends in Scotland are extremely concerned, as we are, about the Gaelic television provisions, which are potentially no longer going to be with STV. I know that there is optimism about them being provided by Alba, but that is not a done deal and it may deprive those who depend on Gaelic television in Scotland.
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I move on again, to independent radio services. We broadly welcome the provisions for digital switchover. Of course, full switchover will only happen on a specified date if certain criteria for uptake are met, and the only way that one will get further adoption is by setting a firm date. I hope that the Minister will confirm that we are currently working off a 2015 date, but there are concerns among smaller radio stations that the digital multiplex regions that have been defined are too large. Small, local stations will be broadcast across the whole of a large region covered by a multiplex, and may be expected to pay a rental reflecting that. That would be unfair on some of those small stations. Many of them are arguing for DAB plus, a technology which would be, I believe, much more in tune with their requirements. I would be grateful to hear what the Minister says in that respect.
Coming to access to the electromagnetic spectrum, on these Benches we have not yet decided whether to support the Government's proposals on that. The impact assessment claims that this will have,
- "the maximum possible effect in terms of promoting and sustaining competition in the mobile sector".
If the changes in the Bill cannot be implemented by Ofcom, it is said that some mobile network operators may have to delay the rollout of 4G. Yet are we selling a valuable resource, one which is worth billions more than will actually be derived under the Government's proposals, too cheaply? Selling the spectrum piece by piece, rather than in the package proposed by the Government, could perhaps get us a much better return. Government plans are not in line with how other countries in Europe are dividing up their spectrum.
Those who have talked to us on these Benches have also argued that there should be some provision for a new entrant to the market in the auction of new spectrum in the 2.6 gigahertz and 800 gigahertz spectrum-a section of spectrum that no existing holders can bid for. That was the case with the original auctions; why is it not being proposed in these circumstances? Are we simply ensuring that existing mobile operators are deriving an unfair advantage over the fixed-line ISPs or are the Government putting forward some real advantage, such as a public service obligation for the mobile operators? That does not exist at the moment, but is there some proper quid pro quo taking place?
We have a diminishing number of mobile operators, and it looks as if they are going down from five to four. At present, the current arrangements look like a carve-up between those mobile operators. If we could find further funds from that mobile spectrum auction, surely those could go toward some of the new, superfast broadband delivery or some of the future ITV news requirements. Would that not be beneficial? The Government set great store by the Independent Spectrum Broker's report, but no one seems to have seen the remit given by the DCMS to the Independent Spectrum Broker's report, so it is very difficult to judge whether the spectrum proposals are proper and the right way forward. We strongly support the adoption of the enhanced PEGI standards for video recordings. We believe that it will be a tougher regulator and it is, of course, the only pan-European regulator.
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There are a number of matters missing from the Bill. We very much look forward to the super-fast broadband levy in due course. It would be useful if the Minister, in winding up, could address the press reports that have been made about exactly what that levy will consist of. We generally support the principle of a levy to support the rollout of super-fast broadband. I have to finish now. We have not seen any statement in the Bill about the new digital delivery agency. There is nothing in there on media ownership rules and there are any number of copyright provisions that have not been included, as mentioned by my noble friend Lord Razzall in terms of format switching. That, of course, should be included but is not. I very much hope that in Committee we can make a number of amendments to improve the Bill.
6.56 pm
Lord Howard of Rising: My Lords, it is nice to see the noble Lord, Lord Carter, back in the House. I am sure that, with his great knowledge of the subject, he will be very helpful when we get to Committee.
Welcome though it is overall, the Bill has its disappointments. As my noble friend Lord Fowler pointed out, a number of matters remain to be addressed. There was an opportunity for Her Majesty's Government to make Britain, in digital terms, one of the most advanced countries in the world. In the case of broadband-conspicuous because of how little there is in the Bill about this crucial matter-the very low target for 2012 will merely confirm that Britain is in the digital dark ages. How regrettable that there is no chance to debate the Government's plan, or rather lack of one. So far all that has been suggested is a new tax, but there is little information on how the money raised will be spent. Spending money without proper examination creates the danger of leaving the UK with an expensive infrastructure that is already out of date and not responsive to consumer or industry needs.
The Government should be looking at the regulatory regime in this area and reviewing how outdated and burdensome piles of red tape could be got rid of to assist and encourage private sector investment. This is urgent. Already the internet system is creaking, with mobile networks crashing, and we are still in the early stages of the revolution in communication that is taking place. It is shaming to read Cisco's report that Britain is only 31st out of 66 countries in broadband speed.
Broadly speaking, as the Secretary of State has explained, the general duties of Ofcom are amended to extend investment in infrastructure and promote investment in public service media. This is done by amendment to the Communications Act 2003. However, the 2003 Act already seems to cover everything included in the Bill. Could the Secretary of State let the House know what in particular will be achieved by the proposed amendments to the Act, that could not have been achieved without the Bill that we are discussing today? For example, under chapter 3 of the framework directive, "Tasks of National Regulatory Authorities", Ofcom already has a duty to promote efficient investment in infrastructure.
In addition, the explanatory document repeats the obligation under the 2003 Act to further the interests of citizens in relation to communication matters. Does
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Another concern is the promotion of appropriate levels of investment in public service media content. What is "appropriate", and to what does it apply? Does it, for instance, apply just to the public service broadcasters' online activities, or to all online content which could conceivably count as public service? Is it the amount of money invested, or is it where it is invested? Is it a requirement for the BBC, the largest public service provider, to invest in making programmes specifically for the internet, rather than using the internet to reproduce and promote its television and radio content? We think that the BBC news website, for instance, is a good thing, but would not want it to use this clause as an excuse to expand its online activities beyond their core purpose. These are matters for Committee, but it would be helpful if the noble Lord could tell the House a little more precisely what this clause is trying to achieve. It is broadly drafted and raises many questions.
No one could argue with the aim of Her Majesty's Government to tackle the massively important area of illegal file-sharing, but the lack of detail in the provisions is disappointing. The lack of certainty is a particular concern for internet service providers, especially mobile broadband providers, who are unsure about the cost of compliance. It is possible that these clauses will set up a proportionate, fair and effective regime, but, bearing in mind the dissatisfaction so many stakeholders have expressed, there must be doubts about how well the provisions will work. These provisions will need to be scrutinised very closely in Committee, especially Clauses 11 and 17. I listened closely to what my noble friend Lord Lucas said. The noble Lord, Lord Clement-Jones, also made some most pertinent comments on Clause 17.
Clause 11 appears to imply that the Secretary of State does not need to consult Ofcom before introducing technical measures. We would be reluctant to see the Secretary of State given such comprehensive and unchallengeable powers. As he himself has pointed out, the latter clause on copyright needs to be updated to take account of new media forms, but this clause does not do that; it just allows the Government to do whatever they want at any point in the future. Although some future-proofing may be necessary, it is regrettable that such a large and important part of a modern digital economy should be left to secondary legislation, with the corresponding lack of scrutiny and certainty. Will the Secretary of State confirm that, as my noble friend Lady Buscombe pointed out, Clause 17 would in effect enable him to rewrite the entire basis of British copyright law by statutory instrument?
It is hoped that the current system of domain name registration can continue to operate in the interests of consumers and businesses without the need for government intervention. There is a case for government obtaining reserve powers to take action where serious failures may be identified, but greater detail is required on how these powers will be used, and what will trigger their use. Could the Secretary of State tell
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