Digital Economy Bill [ Lords]

Part of Business of the House – in the House of Commons at 6:33 pm on 6th April 2010.

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Photo of Peter Luff Peter Luff Chair, Business, Innovation and Skills Committee 6:33 pm, 6th April 2010

I agree absolutely with the hon. Gentleman, whom I wish had had the tenacity to see this Bill through to the end of the Parliament, rather than giving up halfway through. However, he is right, and I shall come back to that in a moment. Some of the fears of the internet community are misplaced. He is also right that in a responsible society, we respect other people's rights.

I would have liked to speak on many areas, but in my brief time I shall concentrate on just four: Ofcom, file sharing, spectrum and orphan works. On Ofcom, I am personally disappointed that there is no provision in the Bill for the transfer of Postcomm's services to Ofcom. That could, and should, have been part of the Bill. The transfer is logical given the convergence of technology and the fact that postal services compete with internet and broadcast technologies. That has no relationship to the privatisation or part-privatisation of Royal Mail Group. Those changes could have been made in the Bill, giving Postcomm and Ofcom the regulatory certainty that they need to plan their futures.

The Bill is weak on investment in broadband. My Committee produced a lengthy report, which is tagged to this debate. As I said, the Minister indicated that the Government's response was ready, but sadly he has not been able to publish it as a Command Paper yet; I wish he had. My report deals with a range of controversial issues, one of which is not covered by the Bill at all-it is in the Finance Bill-and that is the 50p monthly levy on telephones. I shall let out a small secret from my Committee's deliberations: it was the Labour members of the Committee who were particularly exercised by what they saw as a regressive and poorly targeted tax. We are to have no opportunity to debate that provision on the Floor of the House, because the Finance Bill is also going into the wash-up, which is quite extraordinary.

I would like to see in the Bill a definition of what constitutes 2 megabits per second. I know that the hon. Member for Sittingbourne and Sheppey was rather dismissive of 2 megabits per second, but for many small businesses and rural dwellers, getting reliable access to a minimum of 2 megabits per second would transform their lives. It is enough for BBC iPlayer, after all, and most commercial transactions can easily be done using that speed, but it is often not available. Putting an emphasis on the universal service obligation could really unleash the creative energies and commercial opportunities that many people are currently denied. So my message to the Government is this: let us not deride the Mini, even though we all aspire to the Rolls-Royce.

I am worried about the provisions relating to Ofcom in clauses 1 to 3. I am not convinced that they will not dilute its focus on consumers and competition. Sky has told us in its briefing on this debate that

"the new duties represent an unwarranted, ill defined and unnecessary intervention that is likely to distort the balance of Ofcom's priorities to the detriment of competition and consumers and result in unforeseen consequences."

There is that phrase again: unforeseen consequences. The Bill will have so many of them, and that is why it needed a Committee stage.

I am pleased to have had Ofcom's response to many of these proposals. It appears to welcome the investment role that it will be given under the new powers, but it has also expressed a clear concern about the lack of broader powers to achieve the greater duct access necessary for the more commercial role in next-generation access that could be achieved by the market, given the right regulatory framework.

I turn next to file sharing. My hon. Friend the Member for Maldon and East Chelmsford, the Chairman of the Culture, Media and Sport Committee, made a fine speech, and I have little to add to that, except to say that the provisions of the Bill have been misunderstood by many campaigners. They really are far less draconian than people think. A year of warning letters will precede any technical action, and such action will begin with throttling access rather than cutting it off. The cut-off will come later. There are also to be rights of appeal. I ask the campaigners to balance their interests against those of the creative industries, as Mr. Simon rightly suggested.

I am always struck by what Sky has to say, and I was certainly struck by its evidence to the Committee. It has a foot in both camps, as an internet service provider and a creative content provider. I know that it had a big internal debate about where the balance of its interests lay, and it concluded that it was with the Bill, with creativity and with protecting content. Frankly, if Sky, as a big ISP, can manage that, I am sure that everyone can. However, I note its concern that

"measures need to be widely applied which is why the notification obligations must apply to all ISPs and that in the apportionment of costs Ofcom should have regard to the principle of 'beneficiary pays', which in this case is content owners-Sky as a content owner will expect to pay the full cost of participating."

There is still a debate to be had about the details of those provisions.

I accept the concerns that my hon. Friend the Member for Maldon and East Chelmsford expressed about student halls of residence, although I have no idea why he should pick on students as illegal file sharers. Concerns have also been expressed by the Federation of Small Businesses, which points out that many of the problems occur

"on communal computers, such as those in internet cafés, and various other small business outlets that could include pubs, shops, hotels and even home offices-in short a significant proportion of our members."

It is no exaggeration to say that, unless those concerns about illegal file sharing in public places are properly addressed, this could be the end of public wi-fi, which would be very serious indeed. There could be technical solutions to those concerns, but we need to have them spelled out. Unfortunately, we do not have time to do that in this debate; nor will we have time in the Bill's short Committee stage tomorrow. A full Committee stage would have enabled that issue to have the attention that it deserves.

I am largely unsympathetic to the concerns of the big ISPs, but BT has made some important points in its representations, particularly that

"the rights holder must show the court that he has taken all reasonable steps to enforce his rights".

That, too, is something that we should have had an opportunity to look at in detail, but that opportunity has been denied.

I shall turn briefly to spectrum- [ Interruption. ] I hear cheers from my Front Bench. I am gaining a certain reputation for speaking up for radio microphones, so it will not surprise the Financial Secretary to the Treasury or the Minister with responsibility for Digital Britain to learn that I want to talk about that today. A massive windfall is coming the Treasury's way, and I am told that it is not included in the Red Book figures, so it is extra money to help to pay down the debt in a year as yet unspecified. There are still, however, big questions about the future of radio microphones.

As the digital dividend rolls out, some people are losing out. They did not ask to move, and they get no benefit from moving. They include those in the programme making and special events sector, which brings huge social, economic and cultural benefits to citizens and consumers in the UK through a wide range of activities including film production, musical theatre, news gathering, television, sports events, live music and even church ceremonies. Indeed, I have the whole of the Church of England on my side in relation to early-day motion 323. It is still not too late to sign that motion, and I thank the 164 hon. Members who have already done so.

I am confused by the Bill. The Government say that decisions must be made about spectrum allocation under the powers laid out for Ofcom by Parliament, but Ofcom has said that

"the final decision on the level and basis of this funding is entirely a matter for Government".

There is confusion, and I wonder whether the Minister will maintain that the decision must be made under Ofcom's powers, rather than by the Government-and, if so, why.

The Government claim that they do not need to provide funding because good notice has been given, but even now they do not know what the spectrum is going to be. In Ofcom's recent annual plan, it suggested that the details for the alternative spectrum will be provided only in the third quarter of this year, some five years after the eviction of the programme making and special events sector was announced.

I have spoken to the Minister about the Government's pledge that no one would be better or worse off, and I will not weary him by going over the details again today. I repeat, however, that if residual value compensation does not cover the cost of replacing existing equipment with alternatives that do the same job, recipients will be left worse off. The Government have indicated that they want to take that issue seriously, and I hope that they will.

Turning to the time scales involved, why has all this taken so long? Here we are, right at the end of the process, and we still do not have answers to the really important questions. Small businesses and freelancers need to make significant investments running into many millions of pounds, but they are being left in considerable uncertainty. There is a real risk that there could be a big hiccup in the provision of radio microphone services. When they go, we will realise how much we miss them.

My fourth area of concern is orphan works. The rest of the Bill seems to get it right on property rights, and it is therefore surprising that clause 43 seems to get it so badly wrong. I am an amateur photographer, although I have never made a penny from any photograph that I have taken. I am Mr. May in the House magazine calendar with a photograph of the grounds of Caerhays castle. I might be the election month pin-up, but I am getting no money for that photograph. I declare my interest, however.

Many photographers rely on the exploitation of the intellectual property rights that flow from their work. As the campaign group to stop clause 43 points out, the clause says that

"if someone finds your photograph, wants to use it and decides that they can't trace you, they can do whatever they like with it after paying an arbitrary fee to a UK Government-appointed 'licensing body'. You'll never know unless you happen to find it being used in this way".

We have seen graphic examples in our post and e-mail of images being used in ways never before seen. Those practices have resulted in the people who took the photographs losing money.

Ironically, there has been a spectacular demonstration of that only in the last few days. I am indebted to Jeremy Nicholl, whose blog I shall quote from-or, perhaps, paraphrase; I do not want to be accused of plagiarism on this of all occasions. About last weekend's now famous "Ashes to Ashes" Gene Hunt poster featuring the actor Philip Glenister, the blog states:

"But for those in the UK creative industry there is a far more interesting question: how did the Labour party get permission to use the Glenister image? The answer is: they didn't. In the clause 43 spirit of log on, go everywhere, steal everything, the image was apparently downloaded by a Labour party activist, adapted by advertising company Saatchi & Saatchi, then approved by government ministers David and Ed Miliband. Alarm bells, anyone?

The poster manages to break just about every rule in the intellectual property handbook, and with entirely predictable results. Glenister has apparently said he is unhappy about the use of his image for political purposes. Doubtless lawyers for German car maker Audi will be interested in how one of their products came to be used to promote a British political party. And BBC chiefs are reportedly 'furious' at the misuse: 'We would never have given permission for any political use of one of our programmes', one senior executive is reported as saying. Quick, define irony".

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