Digital Economy Bill

Part of the debate – in the House of Commons at 4:44 pm on 13th September 2016.

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Photo of Nigel Adams Nigel Adams Conservative, Selby and Ainsty 4:44 pm, 13th September 2016

I welcome this Bill and much of the important detail it provides on broadband and mobile connectivity issues, which are of particular interest in a rural constituency such as mine in North Yorkshire. I mention my entry in the Register of Members’ Financial Interests with regard to shareholdings and directorships in two telecoms businesses.

One area in which the Bill has great intentions but very little detail is its intellectual property provisions. The Bill has great potential to make immense improvements in that area, and I would like to talk about the issues in my particular capacity as chair of the all-party parliamentary group on music. Those Members who are keen music fans are very welcome to join me at the British Library this evening, to attend its exhibition on the 40th anniversary of punk rock music.

This year’s “Global Music Report” by the International Federation of the Phonographic Industry showed that digital music currently contributes 45% of recorded industry revenues and that it has overtaken physical market revenues this year for the first time. Given the increasing prevalence of digital consumption in the music sphere, the music industry strongly supports the growth of a legal and functioning digital market, but that is not what we have at the moment.

Indeed, as I have said in the House before, I was stunned to meet a songwriter who, for more than 2 million plays of his song on YouTube, received the princely sum of less than £6 in payment. His experience is not unique. The music industry would like its creative content to be a driver of the digital economy, but if creative personnel cannot make a living because of how that market works, we could lose what is a world-beating industry for Britain, given that one in six albums sold worldwide come from British artists.

UK Music’s “Measuring Music” report, which was released yesterday, reveals that, while sales of digital downloads have slowed, the use of streaming services has increased strongly. It is critical that the sector delivers both for creators and for consumers.

Clause 26 sensibly suggests equalising online penalties for copyright infringement, so that they correspond to physical offences. Many Members have indicated their support for that. Increasing the terms of imprisonment from two to 10 years will act as a suitable deterrent to those who profiteer from activities that harm our creative industries, which, let us remember, contribute £84 billion to the economy. Given the high proportion of digital revenue entailed, we should not damage further growth by treating digital offences as somehow less important than physical infringements.

Other measures, such as the universal service broadband obligations in clause 1, will increase the opportunities for people to enjoy creative content online through faster broadband speeds.

There has not been a Digital Economy Bill since 2010. Technology and consumer choice have already advanced considerably, so it is important that we do not miss this opportunity to move with the times. We do not know when we will get another opportunity to discuss these issues in the form of a Bill. It is highly possible that we will have left the European Union before then. We must ensure that the Bill is future-proofed, which to my mind means expanding it in some respects.

Two particular issues occur to me. First, at last week’s annual general meeting of the British pornographic industry—[Interruption.] I have no idea whether the British pornographic industry has an AGM, or whether there is such a group. I am certainly not its chair, although, looking across the House, I see that there are one or two candidates. I must get back on track. At last week’s AGM of the British Phonographic Industry, its chief executive officer, Geoff Taylor, called on the Secretary of State to seriously consider measures to provide a mandatory code of practice between search engines and rights holders, if a voluntary code between the two fails. Given the ease of access to infringing music and film content on search engines, that seems sensible. What is the Secretary of State’s response to that? Does she agree that creating a backstop power would be consistent with other approaches to IP legislation? For instance, the Enterprise and Regulatory Reform Act 2013 made a similar provision for a code of conduct for collecting societies and other organisations that administer royalties.

Secondly, we expect the European Commission to make a statement this month as part of its digital single market strategy, which is likely to attempt to address the so-called value gap, whereby rights holders are denied fair value due to out-dated safe harbour laws. For example, “Measuring Music” reports that YouTube increased its music rights payments by 11% last year, but total streams grew by 132%. The Government previously viewed that as a European Union issue, but given impending Brexit, will they use the Bill to ensure that we get it right now? Will the Minister consider measures that would give UK creators and businesses certainty about how their rights will be respected when we leave the EU?

My remarks thus far have centred on the music industry, but I conclude by saying that this part of the Bill is equally critical for our other industries, including film and television, which are closely intertwined. Considered through that lens, the Bill contains a welcome provision to repeal section 33 of the Copyright, Designs and Patents Act 1988, which was originally introduced to encourage the roll-out of the then nascent cable platform, and that objective has clearly been achieved.

Although this was not envisaged when it was introduced in the ’80s, section 73 of the 1988 Act is now relied on by a series of online service providers, such as TVCatchup, to make money from the public service broadcaster channels by retransmitting them while selling their own advertising around the PSB’s content. Such so-called services undermine the online streaming services and on-demand catch-up services provided by the PSBs. That leads to a loss of audience from PSBs’ services and a loss of advertising and sponsorship revenue for the commercial PSBs, which makes it harder for them to achieve a return on their investment in content.

None of the substantial sum of money made by those parasitic services is paid to the PSBs, or to the underlying talent and rights holders in the content, and none of it flows back into original UK content production. I therefore urge the Government to ensure that repeal is delivered at the earliest opportunity, which is Royal Assent, so that those who wish to retransmit or otherwise use PSB services have to negotiate a price for to do so within the must-offer regime in the Communications Act 2003. That will enable those who create content to make a return on their investment and continue to make the programmes that viewers love, which are the envy of the world.

This is, in many ways, a very good Bill. I hope that, as it progresses, the Government will consider how we can make it even better and more supportive of our creative industries, which are true drivers of our digital economy and some of our best exports.