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Digital Economy Bill [HL]

Volume 717: debated on Wednesday 3 March 2010

Report (2nd Day)

Clause 8 : Contents of initial obligations code

Amendment 54

Moved by

54: Clause 8, page 10, line 35, at end insert—

“( ) that the code makes provision to ensure subscribers do not incur any cost in meeting their obligations under section 124A;”

My Lords, once again it falls to me to propose an amendment against the tide of the House as noble Lords exit, so I shall read out my first paragraph slowly to make sure that everybody gets the full flavour of the proposal. In moving Amendment 54, I shall speak also to Amendment 108.

The aim of this amendment is to ensure that the initial obligations code includes provision to guard against subscribers notified under Clause 4 facing any costs in responding to a notification. We on these Benches seek reassurance that subscribers—essentially, consumers—will be able to challenge any notification without cost. Amendment 108 has a very similar intent. The aim of that amendment is to clarify that subscribers notified under Clause 4 by their ISP that their internet connection has been linked to online copyright infringement will not directly bear the costs of the proposed scheme.

Consumer organisations strongly oppose consumers having to pay to appeal. The Explanatory Notes to Clause 15 state, at paragraph 77, that,

“most of the costs of subscriber appeals to an independent person … should be funded by industry, so that a subscriber does not face significant costs in making an appeal”.

Why should not all the direct costs be borne by the industry, whether ISP or copyright owners? I beg to move.

My Lords, I support this measure. “Subscriber” means the person who pays the bill on an IP address, so this also includes, for instance, universities. Last night I had an interesting conversation with the security people at Queen Mary, University of London, and discovered that, whereas last year they got about 50 to 100 copyright infringement reports from American legal firms demanding that they do something about it, they are running at 50 a month this year. It is clear that the Americans are grouping to have a bigger drive once this Bill is passed. We do not want to see universities cut off, so they will probably have to undertake appeals. I do not see why an education establishment should have to pay the cost of this sort of thing in order to protect rights holders.

My Lords, we return once again to the question of costs. I agree with the noble Lord, Lord Clement-Jones, that the subscribers, the majority of whom are legitimate users of the internet, should not bear the costs for the behaviour of the minority. As has been said in previous debates, although we realise that ISPs may have to bear a proportion of the costs of sending out the letters and compiling infringement lists, this proportion must be judged so as to impact as little as possible on subscribers.

I am afraid that I cannot agree with the noble Baroness’s amendment. To ask ISPs to bear a part of the cost burden for a process over which they have absolutely no control seems extremely unfair. It is entirely in the hands of copyright owners how much they spend on identifying breaches of copyright. They choose—

My Lords, I am sorry to interrupt but I think that the noble Lord may not have noticed that Amendment 110 has been degrouped,

My Lords, when a cost is placed on industry, ultimately there is a high likelihood that the consumer pays. It would be impossible to audit all ISPs to ensure that none of the cost associated with the notification process was passed on to consumers. Whether ISPs absorb all the costs of notification is a commercial matter for them, but if they pass all of it on, we do not think that that will be significant. Our high-end estimate is that the annual cost to a consumer per year would be around £2.50. We are not saying that that cost should be passed on but we are pointing out one of the difficulties of audit relative to the size of the problem.

Amendment 108 is slightly different in that it would prevent the cost-sharing order passing on any of the cost of appeals to consumers. In large part, we agree. For practical purposes, we envisage all the costs associated with appeals falling on to industry, but not completely. There is an argument—here I refer to a comment that the noble Lord, Lord Howard, made when he talked about a “minority”—that a large number of people, perhaps millions, are currently engaged in illegal file-sharing. Therefore, when we say “but not completely”, we feel that there should be a modest fee, refundable if successful—I stress the words “refundable if successful” and “modest”—when a subscriber accesses the appeals system. Our only reason for including that caveat is that the aim is to prevent frivolous appeals that waste time and money and clog up the system.

We understand the principle and do not in any way want there to be an adverse effect, preventing genuine appeals by charging a cost penalty. To make matters completely clear, I stress that we are not saying that we think such a fee should be introduced, as that also raises practical issues, such as looking at the need for exemptions and so on, but we think that we should leave the option open. Therefore, minds are by no means made up on this but I have drawn noble Lords’ attention to some of our concerns.

I hope that in the light of my comments the noble Lord will feel able to withdraw the amendment.

My Lords, I thank the Minister for that helpful clarification. My reason for bringing up this amendment again at this stage is that I think it was lost in the thickets of another grouping in Committee.

The Minister’s comments in respect of both Amendments 54 and 108 are reassuring. Clearly, Amendment 108 relates to exceptional circumstances, and I very much hope that the code will reflect that. Of course, we very much hope that the Minister is correct about the sum of £2.50 that he mentioned in respect of the earlier amendment. Consumer organisations need to look at what he said to see whether they are adequately reassured by it. In the mean time, I beg leave to withdraw the amendment.

Amendment 54 withdrawn.

Amendment 54A

Moved by

54A: Clause 8, page 10, line 35, at end insert—

“( ) that takes into account circumstances whereby injunctions under section 97B as inserted by section (Preventing access to specified online locations for the prevention of online copyright infringement) of the Digital Economy Act 2010 may be brought”

My Lords, I shall speak also to Amendment 120A. First, I apologise for the slightly artificial introduction of this amendment at this point in the proceedings. The use of a paving amendment, Amendment 120A, at this juncture is simply a result of the desire of the signatories to the amendment to ensure a proper debate in prime time in this House of the merits of Clause 17 and our proposed substitute for it.

In Committee, the view on these and other Benches was that Clause 17 should be left out of the Bill. Without going on at great length, our reasons were various but essentially boiled down to concerns about the scope of the clause and its ability to amend the Copyright, Designs and Patents Act 1988. Amendments tabled by the Government in Committee arguably, in the view of the Constitution Committee, extended its scope. New government amendments have been put down on Report which are claimed to narrow the scope of the clause so that it is only Chapter 6 of the Act that can be changed by the Clause 17 procedure. Nevertheless, despite these amendments, it is the blanket nature of the clause which is objectionable, and I believe it would still be considered so by the Delegated Powers Committee and the Constitution Committee.

The Government claimed in their evidence to the Delegated Powers and Regulatory Reform Committee that they need to respond to technological change. In Committee, the Minister used the term “future-proofing”. Yet in our view, despite reports such as the Gowers review of intellectual property, which was excellent in many ways, the Government have failed after many years to bring forward legislation to make the reforms that have been suggested. The super-affirmative procedure contained in Clause 17 is not an adequate substitute for Parliament’s established way of dealing with matters of complexity and importance through primary legislation. Despite government assurances, from personal experience I can attest to the difficulty of changing or contesting secondary legislation in any way. As the sub-committee of the Delegated Powers and Regulatory Reform Committee recognised, primary legislation is more suitable for these kinds of changes.

At the same time as outlining our objections to Clause 17, we made it clear that were the Government to come forward with concrete proposals to amend either the Copyright, Designs and Patents Act or the Communications Act for specific purposes, we would support them. However, there was a deafening silence from the Government. It has become apparent that there are particular threats from sites—cyberblockers hosted abroad, particularly in Russia. It is clear that infringement is taking place in both peer-to-peer and non-peer-to-peer environments. File-sharing is only one part of the problem. It has become clear that the Digital Economy Bill needs to include measures to deal with non-P2P infringement. About 35 per cent of all online copyright infringement takes place on non-P2P sites and services. We need to tackle an existing problem where there are websites that consistently infringe copyright, many of them based outside the UK, which are beyond the jurisdiction of the UK courts.

Rather than “future-proofing”, we need “present-proofing”. We have therefore devised a proposed new Section 97B for the Copyright, Designs and Patents Act 1988. Amendment 120A is designed as a specific alternative to the blanket nature of Clause 17. The proposed new clause makes explicit what is already implicit in the CDPA. Currently, Section 97A provides for injunctive action against service providers. That section was added as a result of the e-commerce directive of 2001, now implemented across the EU. The amendment would specifically allow the High Court to grant an injunction requiring ISPs to block access to sites where there was a substantial proportion of infringing material that is either hosted by the particular site in question or accessed through the particular site. The injunction would be granted only where rights holders had first requested ISPs to block access to the site and when they had also requested the site operator to stop providing access to the infringing material, either by removing the material itself or removing the ability to access it.

Any concerns regarding Article 6 of the European convention, on the right to a fair hearing, are dealt with by the fact that the service provider would be a full and active party in the proceedings. Equally importantly, the site operator will also be served with notice of the injunctive application. There is an explicit reference to human rights implications being taken into consideration by the courts in the new clause. This remedy would stop the supply of illegal content by blocking it at source. There are several websites, many of which are based outside the UK, which refuse to stop supplying access to illegal content—indeed, whose business plan depends on supplying illegal content. At the moment, it is not explicit what can be done about such sites. This site-blocking remedy would give rights holders an explicit, swift recourse to court to block access to those sites. It is very straightforward for a party to avoid an injunction by this remedy—simply remove the infringing part of the publication permanently or temporarily pending investigation.

The amendment addresses many of the concerns expressed about Clause 17. It moves the decision-making to a court rather than the Secretary of State and thereby affords the ISP the opportunity of the six months deadline for the creation of the code to be extended. It contains two clauses that would have the effect of deferring the provisions of new Section 97B coming into force until the notification process is complete. There is already a remedy under Section 97A of the CDPA, which grants copyright owners a broad power to apply to the courts for injunctive reliefs. This amendment does not seek to replace that section, but enhances that power by giving copyright holders a more clearly defined relief with respect to the blocking of infringing sites. I commend this amendment to the House as a more proportionate, specific and appropriate provision than Clause 17, and I hope that the Minister will take a similar view.

The measure confines itself to site blocking. It is a less dramatic change to the copyright Act than originally envisaged by the Government. It amends the Act simply by introducing new Section 97B. It would sit below and build upon the existing Section 97A, which currently provides for rights holders to apply for unspecified injunctive relief to deal with copyright infringement. Finally, it provides against rights holders returning to the court as a substitute for developing innovative and legal services. The court can have regard to whether the copyright owner has made reasonable efforts to facilitate legal access to the content.

The Government, with whom we have had some discussions, have said that they are opposed to this measure on the grounds of national security objections. We are told that there may be problems for national security in site blocking. We have again explicitly tried to ensure that these concerns can be taken into account by a court when granting an order. The amendment makes provision for the court to have regard to any issues of national security raised by the Secretary of State. Furthermore, if the injunction was exercised with regard to only a handful of sites a year, it would be unlikely to trigger the mass defection to encrypted sites that may be at the root of the Government’s concerns.

Site blocking is not a new phenomenon. It is used with great success in other spheres to restrict access to sites hosting illegal content. The most well known is the recommended list of sites to block provided by the Internet Watch Foundation. A direct analogy is obviously difficult given the content that the IWF monitors—child sexual abuse content hosted worldwide and criminally obscene and incitement to racial hatred content hosted in the UK—but the important fact is that sites are routinely blocked. Recently, in response to a Parliamentary Question on the blocking of websites identified as containing illegal images of child pornography, Alan Campbell MP, Parliamentary Under-Secretary of State responsible for crime reduction said:

“The Government regularly receives representations relating to blocking, from different sections of society. The Government discusses issues relating to child protection, including blocking of websites containing illegal images, with a wide range of stakeholders.

The Government are clear that the use of blocking to prevent access to such images is something that internet service providers should do, and the Government have been very pleased with the response from the internet industry”.—[Official Report, Commons, 2/11/09; col. 692W.]

I think that speaks for itself.

In addition, at the end of last year, an operation by the Met’s e-crime unit resulted in more than 1,200 websites being shut down or effectively frozen. Access to these sites, which were selling counterfeit goods, was denied. I said earlier that the Government have raised the objection that the proposal, if it became law, would require notification to the European Commission under the technical standards directive. We believe that the explicit reference to the time delay required in order to comply with the EU technical standards directive cures that problem. I commend the amendment to the House. I beg to move.

My Lords, I thank the noble Lord, Lord Clement-Jones, for tabling Amendments 54A and 120A. The many objections to Clause 17 were made perfectly clear in Committee, but while the Government’s amendments are an improvement, they do not take account of the fundamental objection that the Government are asking for a power for which they cannot explain the need or how it will be used. This is quite extraordinary, given that there is clearly a growing problem with online copyright infringement via sites streaming copyrighted material.

The Government were astonished to find that Clause 17 might be used to address this issue. Nevertheless, they appeared to agree that setting in place arrangements for blocking sites that make unlawful material available might be an acceptable alternative. Unfortunately, discussions between the Government and the Opposition have not resulted in an amendment on which all sides can agree. The sticking point appeared to be the security services, as the noble Lord, Lord Clement-Jones, has explained. We on these Benches have therefore worked with the noble Lord and his party to address that concern, and our amendment would insert the consideration of national security, thus ensuring that, if these concerns are indeed justified, the Secretary of State can intervene to ensure that there are no unintended consequences from injunctions being granted. We will obviously keep such considerations under close review.

We support Amendment 120A as an alternative to Clause 17, and hope very much that the Minister will agree to accept it as a necessary solution to a growing problem.

My Lords, this is an interesting idea which, theoretically anyhow, we should consider very seriously. I hope the Minister will do so.

Will the Minister comment on his amendments in this group so that I can comment on them as well as on this amendment? I encourage him to do so.

I am resisting getting up unnecessarily because I have problems with my hip, so I hope noble Lords will understand that I do not mean to be impolite when I nod in the affirmative.

Before I speak to the amendments, it is worth my recalling what gave rise to Clause 17. The clause provides a framework within which to address future issues of online copyright infringement. It is the most effective and proportionate way to ensure that we do not have to react continually to crises but can consider and act within specified limits if—I stress this—Parliament agrees.

Online copyright infringement is estimated to cost in the region of £400 million per year. In addition to lost sales, this acts as a significant dampener on the ability of the creative industries to build new commercial online models due to their inability to compete with free online copyright infringement. This is a threat to the ability of an important part of the UK economy to modernise and develop.

We live in a time of rapid technological change in which new ways of online copyright infringement can come to the fore quickly, and we need to be able to respond quickly and flexibly. We cannot be completely confident today which nascent threats will become sufficiently serious to require consideration under Clause 17. I give three examples: programs that allow streaming services, such as Spotify music or video such as BBC iPlayer, to be permanently downloaded, thus contravening the terms of access to those services; programs that overcome digital rights management technology, such as stripping music tracks from music videos; and types of aggregators that could create conditions for infringing behaviour.

Clause 17 requires a rigorous process to be undertaken, but it might be used to strengthen existing provisions on digital rights management, which might help to counter threats of stream-ripping or video-to-audio conversion, to clarify the legal status of metadata when used to convey the wishes of a copyright owner regarding material that is later subject to civil infringement, and to support rights-holders’ actions against online copyright infringers either by helping with the process or by assisting efforts to educate consumers. I hope these examples illustrate the breadth of the problem with which we need to deal.

Amendment 54A, moved by the noble Lord, Lord Clement-Jones, highlights the potential impact that Amendment 120A might have on the operation of the detailed provisions that we are setting up in Clauses 4 to 16. However, the main issue to address is Amendment 120A. I understand what lies behind this approach, but I cannot accept it for two fundamental reasons.

First, the provisions would need to be notified to the European Commission under the technical standards directive. Although I accept that the drafting attempts to deal with this, we are clear that even the creative solution offered by the noble Lord, Lord Clement-Jones, in subsections (6) and (7) of the proposed new clause in Amendment 120A would not count as notification in draft. Without the proper three-month notification, the provision would not be enforceable.

Secondly, I do not think that it would be sensible or appropriate to adopt this approach today. Blocking access to websites is an enormous step. It is worth noting that many and possibly most sites containing infringing material will also contain legitimate material. Finding a way of blocking infringing material without impacting disproportionately on legitimate uses is likely to be difficult. Simply leaving it to the courts to do that without any guidance or assistance does not seem sensible.

However, the trickiest issue is likely to be around sites that link to other sites that would be caught by this proposed clause but which do not have any control over or even knowledge of the content to which they link. That could lead to search engines being on the wrong end of a blocking order, something which I think will cause significant public disquiet. In my view, people would be right to be worried, since we have only the most basic understanding of the potential consequences of such a clause.

The noble Lord, Lord Clement-Jones, implied that this would provide a simple solution—would that that were the case. He rightly referred to the activities of the Internet Watch Foundation list. We see that as a very different situation. The core offenders of child abuse imagery are a very small proportion of the population and the list affects only a small number of sites. Due to the penalties and stigma involved, the offenders do not advertise their techniques, and they practise evasion techniques which make them very difficult to detect. However, it is important to prevent accidental exposure to what is globally recognised as offensive content, the very presence of which continues to abuse victims.

This is a very different strategy to tackle a different problem. It is not comparing like with like. We estimate that as many as 6 million or 7 million people may be infringing copyright online, and probably thousands of sites are involved. The adoption by 6 million or 7 million people of evasion technologies would be a very substantial change in internet user behaviour and you cannot compare that to the small number of sites to which the noble Lord, Lord Clement-Jones, referred. This is a serious step and we should make sure that if we are going to make analogies, they can stand examination and scrutiny. With due respect, I do not believe that the analogy quoted by the noble Lord, Lord Clement-Jones, can stand that scrutiny.

Despite everything that the noble Lords, Lord De Mauley and Lord Clement-Jones, rightly said about scrutiny, accountability, fairness to subscribers and the burden of proof in relation to Clauses 4 to 17, this amendment offers no such safeguards, no thresholds and no defences that can be relied on. It also assumes the service provider’s responsibility even when it cannot reasonably be in a position to prevent the harm complained of. The court is enjoined to take some of those matters into consideration, but it is given no guidance on how to make those judgments or on what might be reasonable levels of collateral harm.

I also note that the amendment refers the court to consider any issues of national security raised by the Secretary of State. I say candidly that that misses the point. The security concern felt by the Government and the intelligence and law enforcement agencies is not about particular acts of site blocking but about the impact that site blocking would have in changing public behaviour. That point has somehow been overlooked—I will not say “conveniently overlooked”, because I do not dispute the genuine attempts being made here—in a way that would make it significantly more difficult for the intelligence and law enforcement agencies to do their job effectively. For that reason, I strongly urge the House to think and reflect very carefully. I believe that we should reject this amendment.

Although it is possible that a clause along these lines might be a useful and appropriate way of tackling some forms of copyright infringement, this amendment is not it. We should not act precipitately in a matter that would so significantly impact on internet users and the digital economy. We have never said that there might not be a case for site-blocking. However, this approach, without consideration and consultation, is not the right way to apply it.

It may be an understatement to say that my comments might not be popular with noble Lords who have put their name to the amendment. However, Clause 17 would give us the opportunity to look at the issue properly and to give Parliament every opportunity to scrutinise the evidence and the terms of any order, thereby holding the Government to account. Surely this is a much better approach and is much more likely to yield effective results. I must therefore ask noble Lords to consider the matter carefully and not press their amendments.

I come last, but by no means least, to the government amendments. A number of your Lordships rightly expressed concern about the breadth of the power in Clause 17. We agree with the assessment of the Joint Committee on Human Rights that there is a delicate balance to be struck between the right to freedom of expression and the property rights of copyright holders. The checks and balances in Clause 17 allow us to strike that balance. The Government have listened to the concerns raised and, in Committee, proposed substantial amendments which clarified the power’s scope and strengthened the safeguards surrounding its use. They do so in four ways: first, by making it clear that the power is targeted and may be used only to tackle infringement, and only in a way which is appropriate and proportionate—we have narrowed the scope; secondly, by providing a threshold in terms of serious adverse effects, which is sadly lacking in the noble Lord’s amendment; thirdly, by making it clear that the Government must consult all persons likely to be affected; and, fourthly, by requiring the use of the power to be subject to super-affirmative resolution.

For the life of me, I still cannot understand the analysis of the noble Lord, Lord Clement-Jones, that that is not a protection. It provides accountability in both Houses, and it gives both Houses the right to reject if they do not believe that a government proposal is appropriate. The noble Lord has not denied that. The super-affirmative procedure provides that the Government must have regard to resolutions of either House and to the recommendations of a committee of either House that is charged with reporting on the draft order. That is accountability. As I said in Committee, a balance has to be struck between the competing needs for careful and measured consideration of any action and for the ability to act quickly when the occasion demands. It is absolutely right that Parliament should have enough time to consider properly any proposed use of the power. The use of the super-affirmative procedure will provide for this.

We are supplementing that through new amendments. First, we have listened to concerns about the breadth of the clause. Amendment 113 makes it clear that the scope of amendments to Part 1 of the 1988 Act is limited to Chapter 6 of Part 1 of the copyright Act. It clarifies that the clause can be used only to make enforcement of rights easier or more efficient, not to define what constitutes copyright infringement. Secondly, the amendments require an independent report to be submitted to Parliament on whether the infringement about which concerns have been raised is having a serious and adverse effect on businesses or consumers. Thirdly, the amendments prohibit the clause being used to require payment of any sum other than that required to cover the cost of the performance of the function.

The amendments will ensure that the breadth of Clause 17 is properly defined and that Parliament is properly able to consider the evidence and any order made under the power. As a result, the clause will allow us to respond quickly and flexibly to adverse developments that affect our vital creative industries. I strongly urge the House to reject the amendments tabled by the noble Lords, Lord Howard and Lord Clement-Jones. Their intentions may well be honourable, but their proposals are unfortunately not appropriate and will not solve the problem. I hope the House will reflect further and agree with the Government’s amendments, which give us both proportionate and flexible power.

My Lords, I shall comment on all the amendments in the group. The Minister will be surprised to hear that I agree with him. I still do not like Clause 17 and shall support Amendment 121, which would remove Clause 17. I believe that the super-affirmative procedure leaves too much of the power with the people drafting the statutory instruments and removes powers from this House unnecessarily. I would like to see at an early stage in the next Parliament a proper review or rewrite of the Copyright, Designs and Patents Act to sort this issue out. That is well overdue in the digital age. It would be the proper way to do this, rather than through funny other procedures that do not involve Parliament properly. I will try to get everyone to accept Amendment 121 and the removal of Clause 17. It is the most sensible amendment in this group and would enable us to consider this issue in the next Parliament, although that does not mean that I do not think that there should be a review.

Given the choice between the government amendments and Amendment 120A, whose paving amendment is Amendment 54A, I would prefer the government amendments, for all the reasons that the Minister gave. As he said, Amendment 120A is full of honourable intentions but it is also full of unintended consequences. That is my real problem with it. We have to remember that the Bill does not just deal with streamed video, film and music. It also involves text—it can be applied to ordinary short text and brief things like that. What do search engines do? They search text and reproduce it in an aggregate form so that you can find what you are looking for. That means that, almost certainly, all search engines will be infringing from day one. It will not take people long to find some infringements. You can just see the legal wars between the big boys and the little boys—of course, the big boys will probably win in the High Court.

That leads me to the next issue, which is the cost of the defence. This will go to the High Court, but until it does we will not know whether we really are talking about a substantial proportion of the content and what would qualify. We will face the old situation in which ACS:Law and others threaten people with huge costs in court unless they roll over and give lots of money up front, so that people end up settling out of court. The problem is the cost of justice, which is a huge block. We have to remember that.

We have dealt with the fact that we need to know that people own the copyright before they take a case to court. There have been a huge number of amendments, from the noble Lord, Lord Lucas, in particular, saying that we need to know that people really are in a position to take a case to court. Well, we will not know until it has got to court. There is no requirement that people should show evidence up front that they own the copyright, so we certainly need to consider that.

I have not got my head around the status of orphan works and the problems that may face the British Library and other libraries or the collecting agency if it ends up managing orphan works. Will they get the right to say that something is in copyright? That will need to be looked at.

I discovered last night that Queen Mary, University of London, is in effect like an ISP. It has three security people overseeing a system of 20,000 connections. People come and go, such as students coming over here and lecturers on attachment. Three people cannot hope to manage all that. The college will of course have lots of material for research on its servers. I should think that most of that is bona fide, but what if one of the researchers has breached copyright in the way in which he has put up material that he thinks is relevant to his research? I can see that being taken down.

I can see the point of Amendment 120A. It is a clever way of trying to ensure that we do not go too far in Clause 17, by replacing it. However, this is too late a stage to insert it. This needs to go out to the whole industry for discussion first, so that we can find all the pitfalls. I have described the pitfalls that I spotted in 10 minutes of reading on this Bench. If I can do that, what could the whole industry do?

Government Amendment 113 would amend the heading to read “Power to amend Chapter 6 of Part 1 and this Part”. I need a legal opinion on this, but does that mean that the Minister can use this part to remove Chapter 6 and then do what he likes? I am not sure whether laws can be used retrospectively in that way.

Apart from that, I prefer the government amendments to Amendment 120A, because they tighten up Clause 17, but most of all I would prefer Clause 17 to be removed altogether, so I support Amendment 121 in the names of the noble Lords, Lord Razzall and Lord Clement-Jones.

My Lords, I first express my gratitude to my noble friend for bringing this forward in prime debating time because it is an important issue. My main concern with this whole debate is that whatever we conclude here, the other place will not be able to spend any time scrutinising what is actually an incredibly important change in the way that the internet is dealt with.

The Minister almost implied that the Government needed power in times of crisis. This is not a national crisis: this is still a matter of civil copyright infringement. Although I can see that it is important, such changes to the way that the internet is used in terms of filtering and blocking should not be undertaken without the other place having full opportunity to scrutinise them, which they will not have. Therefore, without going into the other technical ins and outs that my noble friend, the Minister and the noble Earl, Lord Erroll, talked about, for that reason alone it would be much neater at this stage to simply remove Clause 17, given that this is not a national crisis. If it becomes very urgent at some stage, the Government can introduce primary legislation that can be properly scrutinised, amended and dealt with.

My Lords, I am sorry to enter this debate at a late stage. I have only just worked out that what is now Amendment 120A was Amendment 112 last night. I was alarmed because I did not expect such a radical measure from the Liberal Democrat Front Bench. It raises serious problems, as the noble Earl, Lord Erroll, said, and introduces a novel procedure.

I was not much enamoured with Clause 17 and still have my doubts about it. But it is undoubtedly true that the amendments that the Government have brought forward plus the super-affirmative resolution greatly narrow Clause 17 and make it more subject to parliamentary scrutiny. However, the problem with both approaches is that they are attempting on the narrow basis of what this part of the Bill is primarily about, which is peer-to-peer file-sharing, to build a whole new approach to copyright in the digital age. What is really required—the noble Earl also referred to this—is a more comprehensive approach to copyright protection and its impact on consumers and rights holders in the digital age.

What puzzles me is that that process is being pursued in another part of the Minister's department in terms of a copyright strategy engaging the Intellectual Property Office and so forth. There are also developments at European level. At some point within a year or two we will have to return to this to develop a more modern approach to copyright and intellectual property more broadly and relate that to the digital age. In the mean time, the original Clause 17 was far too broad and blunt, but I am afraid that the amendment of the noble Lord, Lord Clement-Jones, also sounds too repressive to me. I will consider where I stand on Clause 17 when we come to it.

My key point is that the Minister needs to consider whether we should take these comprehensive aspects of the Bill away and focus on the narrower area of peer-to-peer file-sharing and return in a more sympathetic and considered way, with—I see that my noble friend Lord Puttnam is in his place—a fair degree of pre-legislative scrutiny about how we approach copyright issues in the longer and broader term.

My Lords, I take to heart some of the things that have been said about Amendment 120A, although I admit that I am prejudiced because I tabled an amendment very much along these lines in Committee. My amendment did not excite the Government so much, because they are engaged in laying a smokescreen; they can see that this is a serious torpedo heading towards this bit of the Bill. I do not take seriously what they say about the security services. There is nothing about this proposal that is not also implied by the Government’s proposals. If the Government are to go ahead with cutting off people’s internet if they appear to be file-sharing illegally, that will result in a substantial migration to encrypted services and other ways round, as it seems to be doing in Sweden.

No additional dangers are presented by Amendment 120A, which, as the noble Lord, Lord Clement-Jones, has said, addresses an aspect of illegal behaviour that was addressed by the noble Lord, Lord Triesman, at an earlier stage, when he talked about what is happening with football. As soon as a match is played, the stuff is there, with a streaming video on the internet and lots of people watching it illegally. Nothing in the Bill addresses that, whereas this proposal would. For those parts of the digital world where an immediate experience is required, this is probably the only way in which to deal with the issue, and it will have to be addressed.

The Minister and others have pointed out that the amendment will need some tweaking. That is not unusual. I have very rarely had anything substantial by way of an amendment accepted by the Government, even if they liked it. It would be a good idea to get this into the Bill so that the Government can set about improving it or giving us an alternative.

This amendment represents the right way forward. It would do something in primary legislation; it would not create a structure that allows the Government to make radical changes through secondary legislation but ensure that things are properly debated and thought out. The objections that the Government raise to this proposal are minor ones, which could be dealt with by adaptations to the fact of the clause being in the Bill, if that is where it ended up. Dealing with the requirements of European legislation is within the capacity of the Government, and dealing with the requirement that there be full and proper consultation before the clause comes into effect will be there in other aspects of this Bill. Whether the balance is exactly right in these clauses can be dealt with between now and Third Reading. There is no insuperable objection to incorporating this new clause into the Bill, and I prefer it to anything in Clause 17, even with the admittedly helpful changes made by government amendments.

I ask the noble Lord, Lord Clement-Jones, to clarify one aspect of his argument for me, because I am genuinely puzzled by it. The noble Lord is an experienced lawyer, who has been in this House for a dozen years and seen a great amount of legislation flow through it. He refers several times to the notion that somehow a super-affirmative resolution removes the power from this House, but nothing removes the power from this House as much as its inability to legislate in situations in which there is clear abuse and the very nature of our legislative process makes it impossible to move with sufficient alacrity to deal with issues.

I should have thought that it was much better to work on and improve the process of the super-affirmative resolution to the point at which it becomes a very useful instrument for this House, knowing full well that the process of introducing primary legislation into your Lordships’ House is tortuous. The noble Lord has been here a long time, so how much time would he guess it takes to take a problem, turn it into primary legislation and get it through this House? It is probably something like two and a half years. In a fast-moving environment such as the one we are dealing with in relation to the entire Bill, two and a half years is a lifetime. Whether a super-affirmative resolution is right or not, we have to find a better, more effective, more efficient and speedier way of dealing with the kind of problem that the Bill overall is attempting to address.

The point made by the noble Lord, Lord Puttnam, is important and I shall deal with my view on it in a moment. I have some sympathy with the case put by the Minister. I was told that the industry supports the amendment to get rid of Clause 17. I am not sure what part of industry that is. It may well be that Google supports it, but I do not think that the creative industry is speaking in one voice on that. As far as I am concerned, the British creative industry—film, television and musicians—is made up of important people who want to see effective action taken against piracy. I come from a position of having a certain amount of sympathy with what the Government are saying.

As the noble Lord, Lord Puttnam, mentioned, we are told that we should have primary legislation and that nothing would be easier. In my experience of government, that has not always been the case. It takes a certain amount of time to get primary legislation through and it has always been hard fought for by a series of Ministers. My favourite example is camcorder crime, which involves recording the showing of a new film in a cinema and selling it as a DVD. I give the department credit for wanting legislation on that, but I suspect that it was unable to do so. It said that it was waiting for the result of the test case under the Fraud Act, which was a very odd argument, given that the department did not even realise that the test case had taken place. In any event, it was held in the magistrates’ court on the Isle of Wight. I do not think it had much resonance on the Isle of Wight, let alone in the nation. I need a bit of convincing on that issue.

The noble Earl, Lord Erroll, and I are on the same side for once. It is Clause 17 that we need to address. Whatever the Government say about consultation, the measure will end up as an order which the House can accept or reject, but which it cannot amend. That is a fundamental defect in something that we are doing here. The Minister talks about consultation. Although he was not the Minister responsible at the time, I have to say that we have been down the consultation path before with Ministers from his department. We had what was described as the biggest consultation in history on the BBC charter. It was a major consultation and all kinds of people were asked about their views. The only trouble was that the department took not the slightest notice of the result of the most important part of that consultation. That is why we have the BBC Trust. Virtually everyone told Ministers at the time that the BBC Trust was a bad idea that would not work and would create a divided structure at the top of the BBC. What did the department do? It said, “We are not consulting on that bit. We are consulting on other parts”.

I am not content, frankly, to receive only vague assurances on consultation. In far too many parts of the media area we make decisions not on the basis of fundamental debate in this House but on an order, such as on the licence fee, which noble Lords can accept or reject—you cannot amend it in any way—or through the BBC charter which does not even come to this House. I regret that I share many of the feelings of the noble Lord, Lord Puttnam, on that, but I fear that I could not support the idea that we should go ahead and put another accept-or-reject order into legislation. Rather like the noble Earl, I could not conceivably support Clause 17 as it stands.

I was not going to speak on this amendment, but the debate has become about the rights and wrongs of secondary legislation, rather than what the Bill is about, namely the digital economy. With due respect to the noble Lord, Lord Fowler, on whose committee I served, he is a Conservative ex-Minister and I spent 18 years myself in opposition in the other place. I have now had to listen to somebody who was in that position talking about secondary legislation when again and again, on legislation that in some ways was more important than this, I had to endure the introduction of secondary legislation. One example was the community charge or poll tax legislation, which was littered with secondary legislation, including orders that were going to be passed in exactly the way that the noble Lord is now objecting to. We are living in a fast-changing technological world and we need powers to change legislation. Maybe my noble friend is right and we need to look at how we deal with secondary legislation, but let us not say that we will not use it in the Bill when we use it in so much other legislation that goes through both Houses.

My Lords, it is time for me to wind up. This has been a very serious debate and I thank all noble Lords who have taken part. I thank particularly the Conservative Benches, both Front and Back, for their support for the amendment. It is greatly valued.

The debate between the noble Lords, Lord Fowler and Lord Puttnam, was extremely important. It is not invalid for a Minister to repent, and certainly not for him to draw on his experience in these matters. One key case against Clause 17 is the fact that an order cannot be amended in these circumstances. Having myself been the victor by the narrowest of margins against an order for the third time since the Second World War, I know how squeaky those debates can be.

I hope that the noble Lord, Lord Puttnam, will look seriously at the amendment. It provides a clear remedy for the creative industries. It is not a blanket like Clause 17: it is designed to assist the very people for whom he is such a powerful champion. Primary legislation need not take two and a half years. If the amendment goes through, the creative industries will have the remedy that it provides rather more quickly than two and a half years.

I will deal with some of the issues that the Minister raised. First, I will say, in response to his passionate speech—it was none the less welcome for that—that Section 97A of the Copyright, Designs and Patents Act 1988 provides similar remedies to that in proposed new Section 97B. It is vaguer and less explicit, and states:

“The High Court (in Scotland the Court of Session) shall have power to grant an injunction against a service provider, where that service provider has actual knowledge of another person using their service to infringe copyright”.

I could go on with the rest of the provision, but I will not. That is in legislation now as a result of the e-commerce directive. This is not a new, speculative tour de force being proposed by these two Benches, but a realistic new clause building on existing Section 97A.

I say again to the noble Earl, Lord Erroll, whose contributions in Committee and on Report have been extremely valuable, that this is not directed against consumers. This is directed against ISPs that allow copyright infringement to be hosted on Russian websites. I have seen demonstrations from the creative industries, and it is hair-curling how the business models—

I am sorry to correct the noble Lord, but an ISP gives connectivity to the internet; it does not necessarily host a website. He is objecting to people who host websites. This is not targeted at ISPs, but at web hosts.

The wording of the Act and the wording of the proposed new clause relate to service providers. Therefore in practice it is going to be the ISPs, so I correct the noble Earl in that respect.

We are simply building on existing Section 97A. This is not about a blind trampling over the rights of internet users or consumers, but about the rights of creators both large and small. Quite often we have heard noble Lords describe the creative industries as the “big boys”. There are small creators as well as large creators and the concern on these Benches, and I am sure on the Conservative Benches, is for the smaller creators just as much as for the larger ones. Let us not forget that many of those who have been talking to us during the passage of the Bill represent musicians, actors, film technicians, engineers and the trade unions. All support measures that will stop their members’ jobs being affected by copyright infringement. That is of great importance.

I shall deal briefly with some of the issues raised by the Minister. He seemed to demonstrate an enormous lack of confidence in our courts. I have shown that Section 97A, which the Government themselves inserted into the Copyright, Designs and Patents Act 1988, tackles infringement effectively by way of the courts, and this new provision does exactly the same. The Minister complains that there will be no proper guidance for the poor old judges, who will not be able to work out whether someone is abusing the court process, whether they are genuinely bringing forward evidence, or whether they are seriously trying to oppress people in terms of costs and so forth. I do not have that lack of confidence in the courts, and I think that the Minister needs to reconsider.

Further, I do not believe that this will involve thousands of sites. As soon as the ISPs notice that this legislation has gone through, they will alter their behaviour. We have seen what has happened in Sweden where there has been a steep fall in pirate sites, and I believe that it would be exactly the same under this legislation. We also cannot accept the Minister’s points about the EU technical directive in this case. The noble Lord, Lord Lucas, made the point very effectively. If the Minister thinks that the wording of proposed new Section 97B is not precisely apposite for the purpose, it can always be changed at Third Reading to make sure that it is valid. We would welcome amendments to that effect.

The Minister talked of “no defences” and “no guidance”, and I have made the point about our judges. Our intellectual property rights judges are extremely well equipped to deal with this matter. On the question of the impact on changing public behaviour and the issue of people migrating to encrypted sites, I do not believe that that is going to be the case. What will happen is that, yes, we will see a change in behaviour, but it will be wholly positive, not negative. As for being precipitate, I could never describe the Government as precipitate. When I look back to the Gowers review so many years ago, it is the very reverse of what the Government are doing. I do not believe that this is precipitate. We have debated in the proper fashion the merits of this kind of procedure and what needs to be done in the course of primary legislation over any number of days. The conclusion validly reached on both Opposition Benches is that we need something extra.

I do not know why it has taken the Government so long to come to no conclusion whatsoever in this respect, but I believe that this will send a powerful message to our creative industries that we value what they do and that we want to protect what they do. While we do not believe in censoring the internet, we are responding to genuine concerns expressed by the creative industries about the provision of a process whereby their material can be accessed legally in a satisfactory manner. The emphasis is on “legally”. I would very much like to test the opinion of the House.

Amendments 55 and 56

Moved by

55: Clause 8, page 10, line 40, at end insert “and”

56: Clause 8, page 10, line 41, leave out from “report” to end of line 42

Amendments 55 and 56 agreed.

Amendment 57 not moved.

Amendments 58 to 66

Moved by

58: Clause 8, page 11, line 6, at end insert—

“(3A) The provision mentioned in subsection (3) must not permit any copyright infringement report received by an internet service provider more than 12 months before the date of a notification of a subscriber to be taken into account for the purposes of the notification.

(3B) The threshold applying in accordance with subsection (1)(ba) may, subject to subsection (3C), be set by reference to any matter, including in particular one or more of—

(a) the number of copyright infringement reports;(b) the time within which the reports are made;(c) the time of the apparent infringements to which they relate; and(d) any other matter.(3C) The threshold applying in accordance with subsection (1)(ba) must operate in such a way that a copyright infringement report received by an internet service provider more than 12 months before a particular date does not affect whether the threshold is met on that date; and a copyright infringement list provided under section 124B must not take into account any such report.”

59: Clause 8, page 11, line 7, leave out “enforcement and related matters” and insert “administration and enforcement”

60: Clause 8, page 11, line 8, leave out “or another person has” and insert “have”

61: Clause 8, page 11, line 10, leave out “copyright infringement” and insert “owner-provider”

62: Clause 8, page 11, line 11, leave out from beginning to “; and” in line 16

63: Clause 8, page 11, line 18, leave out from “costs” to “the” in line 19 and insert “incurred by OFCOM in administering and enforcing”

64: Clause 8, page 11, line 30, leave out ““copyright infringement” and insert ““owner-provider”

65: Clause 8, page 11, line 31, leave out from “between” to “; and” in line 32 and insert “persons who are copyright owners or internet service providers”

66: Clause 8, page 11, leave out lines 35 to 42

Amendments 58 to 66 agreed.

Clause 9 : Progress reports

Amendment 67

Moved by

67: Clause 9, page 12, line 15, at end insert—

“But this is subject to any direction by the Secretary of State under subsection (3A).

(3A) The Secretary of State may direct that subsection (3) no longer applies, with effect from the date given in the direction.”

My Lords, I will speak also to government Amendments 72 and 77. The amendments deal with reports required of Ofcom, or which might be required of it under these provisions. In Committee, there were calls from several noble Lords for reports from Ofcom to the Secretary of State to be made generally available. The Government agreed that there was a case for transparency, so long as legitimate concerns about confidential or other sensitive material were borne in mind. These amendments deliver that transparency, requiring that Ofcom publishes the annual progress reports that it is required to produce under Clause 9; and, should it be required by the Secretary of State under Clause 10 to assess whether technical obligations should be imposed, to publish its report to the Secretary of State on that issue.

The amendments require that Ofcom brings the report to the attention of all interested parties, though one might doubt that there would be much difficulty in attracting their attention to these issues and feel that the amendments are somewhat otiose. Ofcom is also permitted to exclude information if such information would be excluded in response to a freedom of information request. I am sure noble Lords will appreciate the need to protect commercially confidential or other sensitive information. The key is that the reports will be publicly available so that others can also see the main planks of evidence that the Secretary of State will consider.

We also agreed in Committee to look at whether there was any point in Ofcom being required to continue to produce quarterly reports if it became apparent that they were no longer serving any useful purpose, following the comments made from the opposition Front Bench by the noble Lord, Lord Howard, and others. The House will see that this is now covered by the amendments in this group. I beg to move.

My Lords, I thank the Minister for Amendment 67, which meets a concern raised in Committee that to continue with interim reports ad infinitum would serve no purpose. However, I would welcome clarification from him on how long it is expected to take for the notification letters and infringement lists to have an impact on people’s behaviour. How long are the Government expected to wait before establishing whether the actions taken have failed or have been successful?

My Lords, that is a rather difficult question. As the noble Lord will readily appreciate, the Government will adopt a judicious approach to these matters. We have accepted the fundamental argument on transparency that was presented in Committee. We have also accepted the Committee’s argument that quarterly reports might readily be dispensed with. I imagine that the latter matter will be acted on quite quickly. The other matter will require evaluation, but we will stay true to the commitment that we have made. I am sure that the noble Lord will accept that as a basis for the Government’s amendment.

Amendment 67 agreed.

Amendment 68

Moved by

68: Clause 9, page 12, line 18, at end insert—

“( ) an assessment of the level of subscribers’ use of internet access services to obtain legal access to copyright material;”

My Lords, in moving Amendment 68, I wish to speak also to Amendments 70 and 71. These three amendments share a common purpose to increase the pressure in the Bill on the rights owners, particularly the larger ones, to move towards providing their customers with what their customers want, in the way that they want it and with the time limits that they want. The failure of the rights industry to do this has been at the root of the problems that this part of the Bill addresses. In some sections they still drag their feet terribly. Indeed, some extraordinarily bullish statements are coming out of Mr Bronfman and others in the United States. They need to understand—perhaps they will understand this from the previous vote as much as anything else—that there are limits to the degree to which we are prepared to punish our citizens in the cause of rights owners who have not played their part in the compact that is copyright.

The point of copyright is to allow citizens access to creative material. There are two parts to it: one is protection for the creators; the other is access for the citizen. If we are not getting the access to the citizen bit, we are not going to jump up and down on our citizens as a result. The Bill could do with being improved in this respect by flagging up actions that Ofcom needs to take to make it absolutely clear to the creative industry that it has to be constructive and to move on this issue, and that we will not work to maintain over the long term the dissonance between the industry and its customers. The industry has to come into balance with its customers and to find ways of providing the copyright content to them that they will by and large accept so that the desire to go down the illegal route is greatly diminished.

The three amendments come back to a discussion that we had in Committee in which we said that we really ought to be looking not just at the degree of illegal file-sharing but at the degree of legal file-sharing, and that we ought to look at all aspects of the use of copyright material. There has to be strong co-operation between copyright owners and internet service providers. They really ought to be working together in the way that Apple has shown is possible with iTunes. There is no natural division—it has just grown up that way. Copyright owners kept to themselves and internet service providers kept to themselves. Copyright owners still make it extremely difficult for internet service providers to offer a subscription service for music or film to go with people’s internet subscription because the whole business of negotiating rights is extremely slow and lengthy, particularly for the smaller organisations. I am aware, in particular, that the Association of Independent Music has been trying to put together a project in which a certain ISP will work with rights holders to produce these sorts of packages, rather along the lines of what has been done in Denmark. However, there has been immense dragging of heels, particularly by the big American publishers and the interests that they represent.

There really has to be some force from the Government to shift these discussions along or all the efforts that we are putting into this Bill will come to nothing because of the pig-headedness of the rights holders. I should very much like to see the Government, through this Bill, push hard to make sure that we get a constructive resolution to this matter. We need to do all that we can to avoid having to go through some kind of catharsis, where internet copyright becomes effectively unenforceable, to ensure that we get a change of management in the big copyright-holding organisations and end up with people who will deal with the realities of the modern world. I beg to move.

My Lords, my noble friend’s and my amendments in this group suggest other measures that could usefully be included in progress reports to assess the success or failure of the procedures that we have just debated. Amendments 68 and 69 focus on legitimate access to copyright material. During these debates, it has sometimes felt as though the Government and some parts of the industry see all internet usage as potentially harmful. We do not want to attempt to limit legitimate use of the internet.

From a practical point of view, I do not think that a progress report that gives a measurement of unlawful use of the internet under new paragraph (a) will be very useful without a comparison with lawful use. Similarly, I do not see how new paragraph (b) can be useful without an assessment of how many users are availing themselves of these steps.

I should like to clarify whether the progress reports made under this new section will cover technical measures, should they ever be imposed. It would seem likely that they would, given the wide scope laid out in subsection (1). If that is the case, should not the possibility be specifically referenced? I appreciate that I have not tabled an amendment to this effect, but would the Minister not consider it useful for there to be a requirement in subsection (4) specifically to cover the impact of technical measures? An assessment of how many technical measures have been imposed and how many subscribers they are covering would be valuable information.

My Lords, I support these amendments in general, as I do the comments of the noble Lord, Lord Howard of Rising. If we do not know whether what we are doing is working, we do not know whether we should continue down that route.

I do not know whether the word “current” in Amendment 69 would limit the assessment too much and provide an excuse to say, “We can’t keep up to date. It has to be a year behind”. However, I think that “lawful” in Amendment 69 is probably more legally correct than “legal” in Amendment 68. I believe that we should carry one of the two amendments and the wording can be tidied up at Third Reading. If the Government are not willing to accept the amendments, we should divide on them. I can see that when these reports come out it will be all too easy for Ofcom, which is trying to produce the reports, to say, “Well, we don’t have the time or the resources. We can’t do that bit of it”, and just to do one part of the report. In the future, we cannot make valid judgments of the efficacy of all these laws that we are passing if we cannot see the balanced argument. Therefore, I strongly support the amendments.

My Lords, as is often the case, I understand why the noble Lords, Lord Lucas and Lord Howard, have tabled Amendments 68 and 69, but they do not add anything to the existing text in new Section 124F(4)(b), which requires Ofcom to include a description of the steps taken by copyright owners to enable subscribers to obtain lawful access to copyright works.

I am happy to agree with noble Lords that it is essential that copyright owners play their part and make sure that they offer legitimate alternatives in attractive ways—as the noble Lord, Lord Lucas, rightly required—and offer attractive prices that make sense to them, their online partners and subscribers. Without that we will largely be wasting our time on enforcement. The message has been heard loud and clear by copyright owners in this country.

Amendment 70, also tabled by the noble Lord, Lord Lucas, emphasises the importance we all attach to copyright owners working constructively with partners online to ensure that attractive, legitimate alternatives are available. As I have said before and am happy to repeat, the Government take this very seriously. There will be a three-pronged approach to online infringement of copyright—enforcement, education and an attractive legitimate alternative. However, we do not need to be concerned with how such legitimate alternatives are offered or in conjunction with which partners, if any. Taking music as a convenient example, I am sure that we are just as pleased to see the success of the Apple iTunes Store, for example, as we are with the Nokia Comes with Music initiative or any deal done between the record labels and ISPs. I do not think that the amendment is necessary or useful, and suggest that the existing text does the job as far as ensuring that the efforts of the copyright owners are properly considered.

Finally, I thank the noble Lord, Lord Lucas, for Amendment 71, which rightly acknowledges the importance of the person who originally creates the material on which the creative industries are ultimately based. However, the focus of these provisions has and should remain tightly on particular players—subscribers, copyright owners and internet service providers. It is the ability of copyright owners, whether the creators of the material or the investors in it, to develop new and compelling legitimate alternatives to unlawful copying that we seek to enable. It is the efforts of copyright owners to develop such products that we are rightly asking Ofcom to report on, along with the other factors. I do not think that it is directly relevant for this to be extended to the efforts that copyright owners make to ensure the position of the creators as a category in the digital marketplace. To put it bluntly, I do not see it as their primary responsibility since any further category of information added to the list under Clause 9 will inevitably result in additional costs or everything else being done a little less thoroughly as a consequence. We should be aware of that. We need to be careful that we do not add what could be described as “nice to have” items—what in other circumstances is often referred to as gold-plating. With the greatest respect to the noble Lord, I think that this amendment would fall within that category.

The noble Lord, Lord Howard, asked for a progress report on technical measures. The progress report under Clause 9 will look at levels of infringement. I assure him that, if technical measures are in force, they will indeed be reflected in the reports. I hope that the noble Lord will feel able to withdraw his amendment.

That was a most helpful reply in all but the last aspect, and even for that I understood the reason. I beg leave to withdraw the amendment.

Amendment 68 withdrawn.

Amendments 69 to 71 not moved.

Amendment 72

Moved by

72: Clause 9, page 12, line 42, at end insert—

“(7) OFCOM must publish every full report under this section—

(a) as soon as practicable after they send it to the Secretary of State, and(b) in such manner as they consider appropriate for bringing it to the attention of persons who, in their opinion, are likely to have an interest in it.(8) OFCOM may exclude information from a report when it is published under subsection (7) if they consider that it is information that they could refuse to disclose in response to a request under the Freedom of Information Act 2000.”

Amendment 72 agreed.

Clause 10 : Obligations to limit internet access: assessment and preparation

Amendment 73 not moved.

Amendment 74

Moved by

74: Clause 10, page 13, line 12, at end insert “for the purpose of preventing or reducing infringement of copyright by means of the internet”

My Lords, this amendment ties the technical obligation order more closely to the stated purpose of the notification letter and infringement list process set out in Clauses 4 to 9. Although the Minister has assured us that technical obligations are to be used as a backstop power in the event that the letters do not make a significant impact on copyright infringement, there is nothing in the Bill to say that. In the past few years, we have seen too many instances of legislation being used in ways that were not intended when the legislation was passed. This safeguard is more than just a drafting improvement. The order-making power set out in Clause 10 is significant. It allows the Secretary of State to involve himself with the ongoing business of private companies and to limit the provisions of a service to what is likely to be a very large number of subscribers. The Government have accepted many amendments today that make it more likely that such a step will not be taken without proper consideration, so the principle should be acceptable. Amendment 74 makes sure that such a step will be taken only for the purposes we have discussed throughout these proceedings. I hope the Minister will be able to accept it. I beg to move.

My Lords, I bring good news. I am aware that some concern has been expressed in Committee and outside this House that technical measures could be imposed as part of the Bill for purposes other than addressing the online infringement of copyright. I have consistently made clear that these provisions relate to online infringement of copyright and, frankly, I do not think that any alternative interpretation is tenable. However, I recognise that when we are introducing the option of technical obligations, we must be extremely sensitive to concerns that any possible flexibility could be utilised to use the technical obligations outside the area of online infringement of copyright in future, which is the concern, whatever the purpose of the current Government. That being the case, and in order to ensure that our intentions are crystal clear on this point, we are pleased to accept the amendment.

Amendment 74 agreed.

Amendment 75

Moved by

75: Clause 10, page 13, line 31, after “providers” insert “and copyright owners”

This is yet another change that we are proposing in response to the many excellent points that noble Lords raised in Committee. New Section 124G(6) requires internet service providers to give Ofcom any assistance that it may reasonably require in complying with the obligations under Clause 10. Many noble Lords queried why this duty to provide assistance was not extended to copyright owners. We felt that it was unlikely that copyright owners would be in a position to offer much by way of relevant assistance, but we recognise that it might be of use to Ofcom to be able to call upon the assistance of copyright owners when carrying out their Clause 10 obligations. We are therefore proposing these amendments, which impose this additional obligation on copyright owners, to apply the relevant enforcement provisions in Clause 14 to them. I believe that these amendments respond effectively to a specific concern raised in Committee and I urge noble Lords to support them. I beg to move.

I thank the Minister for listening to the concerns expressed in Committee. What happens to the money extracted by this process? The debates in Committee got somewhat convoluted on that point. As I understand it, since a penalty will be awarded when there is a breach of the code, but no measurable identifiable damage is done to a person, the money raised would end up in the Consolidated Fund. I therefore assume that any damages will be paid to the organisation or subscriber who has been harmed. Can the Minister confirm that?

Amendment 75 agreed.

Amendment 76 not moved.

Amendment 77

Moved by

77: Clause 10, page 13, line 35, at end insert—

“(8) OFCOM must publish every report under this section—

(a) as soon as practicable after they send it to the Secretary of State, and(b) in such manner as they consider appropriate for bringing it to the attention of persons who, in their opinion, are likely to have an interest in it.(9) OFCOM may exclude information from a report when it is published under subsection (8) if they consider that it is information that they could refuse to disclose in response to a request under the Freedom of Information Act 2000.”

Amendment 77 agreed.

Clause 11 : Obligations to limit internet access

Amendment 78

Moved by

78: Clause 11, page 13, line 39, at beginning insert “If the Secretary of State believes necessary, having regard to the progress reports under section 124E,”

My Lords, the Minister kindly accepted my previous amendment, which limited the purpose for which technical obligations could be imposed. Dare I hope that he will be equally as receptive to my amendment in this group?

Amendment 78 seeks to ensure that Clause 11 is genuinely used only as a backstop power in the event that notification letters and copyright infringement lists have not been successful in making a meaningful impact on unlawful copyright infringement. The Minister’s Amendments 79 and 82 make significant improvements. They require an assessment under Clause 10 to be carried out before any order is made, and ensure that the initial process has a year to bed down before technical obligations are imposed. Both of these are important concessions, and I thank the Minister for tabling them. However, neither point has regard to the success or failure of the notification process and copyright infringement lists. As it is, it would still be possible for technical measures to be imposed, even though Clauses 4 and 9 were working.

My amendment would ensure that Clause 11 was resorted to only if necessary. It is possible that the amendment’s wording could be improved, but I hope the Minister will agree that it would be beneficial to be certain that the initial measures had failed before moving to the next step. I beg to move.

My Lords, I intend to speak to the Government’s Amendments 79 and 82, which deal with how and when technical obligations may be imposed together. With permission, I will also address Amendment 78, tabled by the noble Lord, Lord Howard of Rising, and Amendment 80, tabled by the noble Lord, Lord Lucas, as they also deal with this part of the Bill.

Noble Lords will recall that I made it clear on a number of occasions in Committee that the Government considered that the initial obligations should be sufficient and should certainly be given a proper chance to work, and that we most certainly did not regard them as a mere precursor to technical obligations. Very often in this House we seem to ignore these initial obligations and somehow assume that we will proceed to technical measures. However, given the concerns expressed by the House, I agreed to consider amendments that would give effect to that commitment.

The Government’s two amendments deliver on that commitment. They ensure that, under the Bill, the initial obligations will have a minimum of 12 months to work. We saw that as an understandable requirement when this was discussed in Committee, and we have tried to address that concern. Technical obligations cannot be introduced until at least a year after the initial obligations code comes into force. I hope noble Lords will agree that this is the right safeguard to have. Let us not forget that there will also be progress reports.

In addition to the assessment carried out by Ofcom under Clause 10, we require that the Secretary of State must take into account reports published as part of Ofcom’s duties under Clause 9 when considering whether it is appropriate to make an order. It would be very strange if the Secretary of State did not automatically do that anyway, but these amendments make that a requirement on him in those circumstances. Given that assurance and the amendments, I hope that the noble Lord, Lord Howard of Rising, will be pleased and feel able to withdraw his amendment.

In part, this also addresses Amendment 80 in the name of the noble Lord, Lord Lucas, and I hope that he is content with the 12-month period which we are specifying from the date on which the initial obligations code comes into effect before technical measures can be imposed. It is entirely sensible that the Secretary of State should also take into account reports produced as part of Ofcom’s duties under Clause 9. I suggest that there is no need to go any further; the policy intent is clear and a proper time is allowed for the initial obligations to work. I hope that this will satisfy the House.

I hope noble Lords will agree that these amendments are helpful in ensuring that a proper time is allowed for initial obligations to work, and that all the evidence that is produced through this process is taken into account in the event of technical obligations being considered. I trust that the House will feel able to support the government amendments and that the noble Lord will feel able to withdraw his amendment.

One amendment accepted in the past quarter of an hour is a cause for happiness and I must not complain if the Minister does not accept this amendment, but should regard my glass as half full. I beg leave to withdraw the amendment.

Amendment 78 withdrawn.

Amendment 79

Moved by

79: Clause 11, page 13, line 39, leave out “at any time”

Amendment 79 agreed.

Amendment 80 not moved.

Amendment 81

Moved by

81: Clause 11, page 13, line 40, after “providers” insert “in relation to online copyright infringement”

The previous group of amendments went sufficiently fast for me not to intervene. My noble friend the Minister will be pleased that I strongly supported his amendments in that group: they have improved Clause 11. However, it probably needs a little more improvement and Amendment 83 addresses one crucial issue.

I am assuming that the Government will accept Amendment 81 in that it follows the same logic as Amendment 74 in the name of the noble Lord, Lord De Mauley, which my noble friend has just accepted. In other words, we need to make it clear that this refers to online copy infringement and not the rather more broad possibilities suggested in the original version of Clause 11. Clause 11 is a key hinge clause in the area of technical measures. I fully expect the Minister simply to accept that amendment.

I suspect that there may be difficulties with Amendment 83. However, it is my way of doing something about which I think others have been concerned and on which we have had widespread debates. The whole purpose of this Bill should be to move the bulk of what is currently unlawful file-sharing on to legal measures, which was referred to in our discussion on the group before last. The amendment in the name of the noble Lord, Lord Lucas, referred to it and the 12-month delay allows some time to see if the new system settles in.

In order for the educational process to have full effect, I had thought that we needed a clear timescale from the passage of this Bill to the point where we could move to the technical measures. Although the Bill has some built-in delays in drawing up the code et cetera, which would probably amount to about 18 months from that passage, I felt that we needed a bit longer than that. However, rather than designate a particular timescale, it seemed sensible to bring this back to the House. We will be moving from the notification and the warning phase, and we will have some appreciation of other, I hope, more positive forms of educational activity and some innovative changes in terms of the options that will be available to consumers for more lawful access to copyright material.

It therefore is quite a step to move from here to the technical measures. I do not know how long will be required to be able to make a proper assessment of the need for that, even within the Government’s terms and certainly within the terms from which I am approaching this. The best bet would be, rather than to have a specific timescale, to bring it back to Parliament. Amendment 83, in effect, requires the Secretary of State to lay a draft order here and an explanatory document as to why we are moving to the next stage and subject it to, in effect, the super-affirmative resolution. There may be other procedures which will achieve the same thing, but it is important for Parliament, at this stage in the process, even were the subsequent clauses to be amended more to my liking, to consider this step before we move to it. I therefore think that something like Clause 83 ought to be acceptable to Parliament.

The narrowing of the effect of Clause 11 to online copyright infringement helps in alleviating that which Amendment 84 is intended to address. The clause states:

“The order may also specify … the criteria for taking the technical measure concerned against a subscriber”.

That is a potentially wide-ranging basis, which is not confined to the peer-to-peer file-sharing that the procedure is primarily about. It has been ameliorated by the Government’s amendments and acceptance of the amendment of the noble Lord, Lord De Mauley. Nevertheless, it would be better if the paragraph were not there. I hope that the Government will accept Amendment 81 and at least take into account the arguments for Amendment 83. I beg to move.

My Lords, I have added my name to the amendments. I feel particularly strongly about Amendment 83. Unfettered access to the internet is seen by many people as being on a par with access to other services such as electricity or water. We would not dream of technical measures being taken against those services without an order and an explanatory document being laid before Parliament. This measure should fall into the same category. I repeat my concern that the other place will not have debated the Bill beyond Second Reading. The amendment would at least give it a chance to debate such measures in the future.

The amendments are essential. The trouble comes from the words “any other consideration” in new Section 124H(1)(b). It is not constrained at all, so I presume that it could be for anything that one wanted. There is nothing that puts in the context of being only for online copyright infringement. It is essential to constrain the clause for that reason; without it, the Bill would be seriously affected. I cannot believe that the Minister would want to hand over such powers to someone in the future without knowing what they would be like.

The noble Lord, Lord Whitty, has come up with a very good idea for dealing with the problem of the world changing fast in ways which we cannot expect and predict. Let us think about these technical measures two years hence. Already, quite a number of internet subscribers have voice-over IP telephones—in other words, internet telephones—and they no longer have a landline, because it saves them a lot of money. Those telephones are essential to them for making emergency calls in the event of heart attack, burglary or other such things. Skype, for instance, contains many elements that are similar to peer-to-peer technology and can look like it. We have therefore to be very careful about how the technical measures are implemented. In the light of the way in which the communications industry, broadband penetration and consumer use of the technology move, we may have to revise the measures very carefully. It is therefore very sensible at least to have something such as the super-affirmative provision—which, for once, I shall accept—to look at the measures; otherwise, I can see a Minister in the future inadvertently ending up in very deep water. Why constrain that Minister or allow mistakes to happen when we can see a car crash or a train crash occurring?

My Lords, the Government have accepted Amendment 74, tabled by the noble Lord, Lord Howard, which in our view renders Amendment 81, put forward by my noble friend Lord Whitty, unnecessary. I hope that my noble friend will agree that the best place for such an amendment is in Clause 10, where a technical obligation is defined. Everything else then follows with regard to ensuring that the only target of the measures applied under such obligations will be the online infringement of copyright. I hope therefore that he will feel able to withdraw his amendment, confident that its intention has been covered and accepted. We are all agreed—

My Lords, I am sorry to interrupt, but I am not sure that the Minister has covered the fact that, although new Section 124H(1)(a) covers assessment under new Section 124G, which is inserted by Clause 10, new Section 124H(1)(b) then mentions “any other consideration”, which is outside the scope of new Section 124G. That means that new Section 124G no longer applies if you exercise powers under new Section 124H(1)(b) in the Communications Act 2003.

That is merely intended to cover wider economic considerations—no more than that—so I do not depart from what I have already said about Amendment 81.

We are all agreed that any decision to introduce technical measures is not to be taken lightly and that Parliament should play a part in the process. We have accepted that there should be a gradual approach and an educative approach. However, I cannot accept my noble friend’s proposal, even though he wanted to do it his way, as he said. I do not think that Amendment 83 is the right way of delivering that scrutiny, for two reasons: first, we are having a full debate now as part of the scrutiny of this primary legislation; and, secondly, we have provided that the order will be considered under the affirmative procedure, which means that there will be further parliamentary debate on any order if and when technical obligations are proposed.

We have said that we expect that our initial obligations, allied with education and new business models, should bring about a significant reduction in copyright infringement, which I know my noble friend desires. However, because we cannot be sure of that, we believe that including a reserve power on technical measures is necessary. The debate has been about whether the process and procedure by which we might use that reserve power is stringent enough and has sufficient safeguards. We have listened to and understood the concerns and we have added these extra significant safeguards. The super-affirmative procedure is appropriate in the particular circumstances of Clause 17, but in this situation all that the super-affirmative procedure would achieve is further delay. I therefore ask my noble friend not to press his amendment.

Removing the text that Amendment 84 proposes should be deleted would remove the clarity in the Bill that the Secretary of State has the power to set criteria for taking technical measures. I am not sure whether the intent of the amendment is to remove what my noble friend Lord Whitty may regard as extraneous language, but I suggest that it is sensible to make it clear in the Bill that we anticipate that the order will contain specific criteria within which technical measures would operate.

I reassure the noble Baroness, Lady Miller, that we have no intention of withdrawing people’s internet access. That would only be at the end of a long process. We feel confident that most people will respond when they are advised that what they are doing is illegal and would take steps to remedy the situation. We are not talking about removing people’s internet access on a whim. I should add that government Amendment 82 changes new Section 124H(1)(a) in Clause 11 so that the Secretary of State must take into account any Ofcom assessment and report and any other matter that he considers relevant.

The noble Earl, Lord Erroll, talked about people who use Voice over Internet Protocol and do not have a landline. There may be such people, but I suggest that they would more than likely possess a mobile telephone. I see the noble Earl nodding. I do not think that we are casting them into the outer darkness of being unable to communicate. I take his point about the changing nature of people’s requirements with regard to telecommunications, but I have yet to encounter a person using VOIP who does not have a mobile phone. Maybe someone is out there, but I have not met them.

We understand the concerns. Moving to technical measures is a serious step, but we will not take it without having gone through the initial obligations, such as the educative and warning processes, ensuring that Ofcom issues progress reports and has to take into account exactly what is happening. With those assurances, I trust that my noble friend will feel able to withdraw the amendment.

My Lords, I will certainly not press Amendment 81, but I ask the Minister to look at the points made by the noble Earl, Lord Erroll. My understanding is the same as his: that the amendment to Clause 10 does indeed qualify some of the activities that follow. But I am not utterly convinced—and neither is the noble Earl—that it covers all of them. It is a technical point that can be easily clarified.

Likewise, on Amendment 84, it is probably true that the noble Lord’s amendments ameliorate Clause 11 and I will not therefore press that either. However, Amendment 83 covers an area that embodies the anxieties expressed in a wide range of interventions in the House at various points in the Bill. The move from stage 1 to stage 2 is an important step. If Clause 13 and subsequent clauses remain as drafted, it is a step that will be decided simply by an administrative tribunal not a court. It can involve, as noble Lords have stressed at earlier points, pretty substantial detriment to the subscriber. The subscriber may not actually be the perpetrator, but their home and business or institution could be completely cut off, at least temporarily, from access to the internet. Those are substantial penalties. The need to move into that territory deserves serious parliamentary consideration.

It may be that the process outlined here is not entirely appropriate, but it should involve something more than affirmative resolution. The first paragraph of Amendment 83 introduces the need for explanatory documentation, which should be a little more than the notes that occasionally accompany affirmative orders. There should be a debate in both Houses of Parliament—as required by an affirmative order—but one that allows Parliament to recognise that this is a serious step and a serious escalation of the process.

Although I will not divide the House at this point, I will reconsider the issue in the light of any amendments that are made to Clause 13 and associated clauses. However, I suspect that I will ask the Government to return to this. The credibility of the process in this House and among subscribers and others outside will depend on whether we have a controlled process. Do we have a process that takes account of progress towards convincing users of the desirability of moving to lawful systems? Do lawful systems exist to the extent that they are usable—in terms of price, availability and flexibility? In other words, is progress to the desired goal of moving to lawful systems in sight of being achieved or has technology overtaken us, making it less likely to be achieved? The problem of unlawful file-sharing may escalate in that period and therefore these measures, in their full force, will be necessary. We do not know what the outcome of that will be in 18 months-plus time, and we need a position to reconsider. The noble Lord said that this would slow it down. Well, yes, it would with regard to the timing and preparation for a debate in this House, but such a serious step deserves the time of this House and its ability to make a difference to what whichever Government are then in power decide to do about this clause. Whoever aspires to be in government at that stage, one would expect quite a serious political reaction to moving down this road; it would be wise for any Government to get a clear and positive endorsement from Parliament before they did so. For the moment, I beg leave to withdraw the amendment.

Amendment 81 withdrawn.

Amendment 82

Moved by

82: Clause 11, page 13, line 40, leave out from “if” to end of line 44 and insert “—

(a) OFCOM have assessed whether one or more technical obligations should be imposed on internet service providers; and(b) taking into account that assessment, reports prepared by OFCOM under section 124F, and any other matter that appears to the Secretary of State to be relevant, the Secretary of State considers it appropriate to make the order.( ) No order may be made under this section within the period of 12 months beginning with the first day on which there is an initial obligations code in force.”

Amendment 82 agreed.

Amendments 83 and 84 not moved.

Clause 12 : Code by OFCOM about obligations to limit internet access

Amendment 85

Moved by

85: Clause 12, page 14, line 22, leave out “(f)” and insert “(fa)”

Amendment 85 agreed.

Clause 13 : Contents of code about obligations to limit internet access

Amendment 86

Moved by

86: Clause 13, page 15, line 6, at end insert—

“(aa) that the requirements concerning subscriber appeals are met in relation to the code (see section 124JA);”

Amendment 86 agreed.

Amendment 87

Moved by

87: Clause 13, page 15, line 16, at end insert—

“( ) that those provisions do not have a significant adverse effect on legitimate users;”

My Lords, Amendment 87 is designed to ensure that technical obligations are not imposed on relevant subscribers without an appreciation of the impact that they will have on other users. The word “user” is deliberately chosen in this amendment, as in many cases there may be more than one user of an internet account other than the named subscriber—for example, on communal internet accounts, when many users are channelled through a single subscription account. Regardless of whether a subscriber will be able to protect his or herself from technical obligations by setting up reasonable measures to protect against unlawful fire-sharing, it would be welcome to have some reassurance that no technical obligations will be imposed without consideration for those who may well be the majority, who utilise the subscription responsibility. Paragraph (f) requires the code to ensure that the technical measures are proportionate. Can the Minister confirm that the number of users who would be impacted will be taken into account when deciding what sort of technical measure should be imposed? I beg to move.

My Lords, while I have much sympathy with the objective of ensuring that people who have nothing to do with online infringement of copyright are left in peace to enjoy all the riches that the internet has to offer, I do not think that this is an amendment that we should accept. One practical difficulty with it would be defining precisely what we mean by “legitimate users”. For example, does this mean that it applies to users of accounts not subject to copyright infringement reports, or is this about people who have not infringed in households where the account is subject to copyright infringement reports? Certainly, I would expect that we could tie ourselves into legal knots trying to be clear what we mean, and we may not in any case agree precisely what scope the amendment is supposed to have. Fortunately, I do not think that the amendment is really necessary.

The other criteria within clause 13(1) serve to ensure that the provisions are properly targeted and focused, and in particular that they are objectively justifiable, not allowed to discriminate unduly against particular people or categories of people, and are proportionate to their purpose. This is certainly sufficient to ensure that subscribers who are not involved in online infringement of copyright have nothing to fear from these provisions. We have outlined the appeal procedures and what we feel would be reasonable measures to protect accounts against lawful infringements. We have taken a number of considerations into account. I hope that in the light of that and the practical definitional difficulties, the noble Lord will feel able to withdraw the amendment.

I thank the Minister for his reply and appreciate the difficulties in defining something such as this. I am glad to have on record his reassurance that this point is covered elsewhere in the Bill. I should prefer to see it on the face of the Bill, but I beg leave to withdraw the amendment.

Amendment 87 withdrawn.

Amendments 88 to 94

Moved by

88: Clause 13, page 15, line 22, leave out “or another person has” and insert “have”

89: Clause 13, page 15, line 24, leave out “copyright infringement” and insert “owner-provider”

90: Clause 13, page 15, leave out lines 25 to 30 and insert “and”

91: Clause 13, page 15, line 32, leave out from “costs” to “the” in line 33 and insert “incurred by OFCOM in administering and enforcing”

92: Clause 13, page 15, line 34, leave out “and”

93: Clause 13, page 15, line 35, leave out from beginning to “may” in line 6 on page 16 and insert—

“(4) The provision made concerning enforcement and related matters”

94: Clause 13, page 16, leave out lines 15 to 18

Amendments 88 to 94 agreed.

Amendment 95 not moved.

Amendments 96 to 98

Moved by

96: Clause 13, page 16, line 20, leave out “copyright infringement” and insert “owner-provider”

97: Clause 13, page 16, line 21, leave out from “between” to “; and” in line 22 and insert “persons who are copyright owners or internet service providers”

98: Clause 13, page 16, leave out lines 25 to 28

Amendments 96 to 98 agreed.

Amendment 99 not moved.

Amendment 100

Moved by

100: After Clause 13, insert the following new Clause—

“Subscriber appeals

After section 124J of the Communications Act 2003 insert—

“124JA Subscriber appeals

(1) The requirements concerning subscriber appeals are—

(a) for the purposes of section 124E(1)(fa), the requirements of subsections (2) to (8); and(b) for the purposes of section 124J(1)(aa), the requirements of subsections (2) to (11).(2) The requirements of this subsection are—

(a) that the code confers on subscribers the right to bring a subscriber appeal and, in the case of a technical obligations code, a further right of appeal to the First-tier Tribunal;(b) that there is a person who, under the code, has the function of determining subscriber appeals;(c) that that person is for practical purposes independent (so far as determining subscriber appeals is concerned) of internet service providers, copyright owners and OFCOM;(d) that there are adequate arrangements under the code for the costs incurred by that person in determining subscriber appeals to be met by internet service providers, copyright owners and the subscriber concerned. (3) The code must provide for the grounds of appeal (so far as an appeal relates to, or to anything done by reference to, a copyright infringement report) to include the following—

(a) that the apparent infringement to which the report relates was not an infringement of copyright;(b) that the report does not relate to the subscriber’s IP address at the time of the apparent infringement.(4) The code must provide for the grounds of appeal to include contravention by the copyright owner or internet service provider of the code or of an obligation regulated by the code.

(5) The code must provide that an appeal on any grounds must be determined in favour of the subscriber unless the copyright owner or internet service provider shows that, as respects any copyright infringement report to which the appeal relates or by reference to which anything to which the appeal relates was done—

(a) the apparent infringement was an infringement of copyright, and(b) the report relates to the subscriber’s IP address at the time of that infringement.(6) The code must provide that, where a ground mentioned in subsection (3) is relied on, the appeal must be determined in favour of the subscriber if the subscriber shows that—

(a) the act constituting the apparent infringement to which the report relates was not done by the subscriber, and(b) the subscriber took reasonable steps to prevent other persons infringing copyright by means of the internet access service.(7) The powers of the person determining subscriber appeals must include power—

(a) to secure so far as practicable that a subscriber is not prejudiced for the purposes of the copyright infringement provisions by an act or omission in respect of which an appeal is upheld;(b) to make an award of compensation to be paid by a copyright owner or internet service provider to a subscriber affected by such an act or omission; and(c) where the appeal is determined in favour of the subscriber, to direct the copyright owner or internet service provider to reimburse the reasonable costs of the subscriber.(8) The code must provide that the power to direct the reimbursement of costs under subsection (7)(c) is to be exercised to award reasonable costs to a subscriber whose appeal is successful, unless the person deciding the appeal is satisfied that it would be unjust to give such a direction having regard to all the circumstances including the conduct of the parties before and during the proceedings.

(9) In the case of a code under section 124I, the powers of the person determining subscriber appeals must include power—

(a) on an appeal in relation to a technical measure or proposed technical measure—(i) to confirm the measure;(ii) to require the measure not to be taken or to be withdrawn;(iii) to substitute any other technical measure that the internet service provider has power to take;(b) to exercise the power mentioned in paragraph (a)(ii) or (iii) where an appeal is not upheld but the person determining it is satisfied that there are exceptional circumstances that justify the exercise of the power;(c) to take any steps that OFCOM could take in relation to the act or omission giving rise to the technical measure; and(d) to remit the decision whether to confirm the technical measure, or any matter relating to that decision, to OFCOM.(10) In the case of a code under section 124I, the code must make provision—

(a) enabling a determination of a subscriber appeal to be appealed to the First-tier Tribunal, including on grounds that it was based on an error of fact, wrong in law or unreasonable;(b) giving the First-tier Tribunal power, in relation to an appeal to it, the powers mentioned in subsections (7) and (9); and(c) in relation to recovery of costs awarded by the Tribunal.(11) In the case of a code under section 124I, the code must include provision to secure that a technical measure is not taken against a subscriber until—

(a) the period for bringing a subscriber appeal, or any further appeal to the First-tier Tribunal, in relation to the proposed measure has ended (or the subscriber has waived the right to appeal or abandoned any appeal); and(b) any such subscriber appeal or further appeal has been determined or otherwise disposed of.””

Amendments 101 and 102 (to Amendment 100) not moved.

Amendment 103 (to Amendment 100)

Moved by

103: After Clause 13, leave out lines 52 to 55

My Lords, this amendment is important and seeks to limit the role of the appeal tribunal to judging appeals that are based on process and due cause, whereby the appeal should decide only whether the rights holder and the ISP have conformed to the provisions of the code. In other words, the appeal would be against breach of process. It is difficult to move to an appeal tribunal set up administratively by Ofcom which would have powers that, in other contexts, would be taken by the court. These are, as I said on previous amendments, severe enforcement measures. They would limit access to the internet, and leaving such measures to a decision of an administrative tribunal without going through the formal process would be against normal civil procedure and the rights of the individual citizen to due process.

Wider human rights issues are involved, and the importance of the Government following due process in this regard is reinforced by the EU provisions on the subject, in particular those that apply to communications markets under Amendment 138 to the EU telecoms package—which is not yet fully enforced but which will be enforced by the time that this part of the Bill is brought into operation.

I have argued from Second Reading onwards that sanctions of this order need to be endorsed or imposed by the court process. The clause does not allow for access to the court. It leaves the imposition of sanctions to the new administrative tribunal, the formation and governance of which are not explicit in the Bill but are left to the operational processes of Ofcom. While in many respects I trust Ofcom, it is not right that it should be left to establish a body that in all parallel contexts would be left to the court.

I scratched my head and talked to people, but I failed to find an equivalent case where a potentially very damaging penalty to households and businesses could be imposed without going through the court system. The Government would do well to think again. I am happy for issues of process to be dealt with by the appeals tribunal, but the imposition of sanctions should be imposed under our general law. There are issues with the Human Rights Act, with EU law and with the EU telecommunications package that will need to be taken into account. This procedure does not conform to any of them. I therefore hope that the Government will at least take time, if they do not accept the amendment, to consider the matter. It would be very serious if the whole structure fell on this point. At the moment, it depends on an obscure tribunal that is not yet set up, not designated, not defined, and with its qualifications and role not clear to the House. Noble Lords would be wise not to go down that road at least until further consideration has been allowed both here and—I follow the noble Baroness, Lady Miller, on this point—in another place. I beg to move.

My Lords, I will briefly associate myself with all the remarks of the noble Lord, Lord Whitty. One of the disappointments in the debate is that this House, and our noble and learned friends and others who are normally so good on due process, have not taken more of an interest in the issues. There are human rights issues here. It is very important that we make sure that due process is followed. I hope that the Front Benches will take a particular interest in this issue: they did not in the last amendment moved by the noble Lord, Lord Whitty, which stated that Parliament should have a chance to look at a super-affirmative resolution with regard to the technical measures. I was disappointed not to hear from either Front Bench on that important issue and hope that they will express an opinion on this.

My Lords, I will make a couple of general comments that apply to the proposed new clause. They concern the appeals procedure, and where laws or rules might conflict. I am afraid that this will get technical: it is for the people behind the Minister. In an IPv4 world, IP addresses are relatively fixed and easy to monitor. What I had not realised until last night is that in an IPv6 world, we go to 128-bit addresses—and that is already coming in. JANET, the educational internet network, has already moved to it. It needs to, because China also uses it. Come the Olympics, we will probably have to move to it for the BT backbone as well. What I had not realised is that multiple IPv6 addresses are issued, some anonymously—they have to be under tier 3 regulations—to people who are going on the internet. Therefore, some stuff will be impossible to monitor. The question is, which rule will be supreme? The appeals procedure will have to take into account—this must be inserted somewhere—the conflict of rules. I put in the technical stuff to highlight the challenges that will be faced. Something must be added at some stage to say that where rules conflict, there must be adjudication and a ruling about which takes precedence.

My Lords, I shall start with Amendment 103. I am surprised that the noble Lord, Lord Whitty, wants to see the removal of this provision, which is there to protect subscribers. It will ensure, so far as is practicable, that a subscriber who has successfully appealed against a notification does not suffer any harm as a result of that particular notification. This would include, for example, a subscriber being taken off a serious infringer list if a successful appeal meant that the subscriber no longer met the required threshold.

Let us reflect on what will happen under the Government’s proposals before a subscriber would become subject to any technical measure: an alleged infringement is detected and matched to his account; a notification is issued and he can contest that; a number of subsequent alleged infringements will have been detected and matched to his account; he will get another notification, which he can also contest; yet further alleged infringements will have been matched to his account, and he will be notified that technical measures will be applied; again, he can contest it. Let us imagine that now he does appeal. The copyright owner and ISP will have to prove that each and every copyright infringement report that led to his being in that position was a genuine copyright infringement and that it was properly matched to his account. It is frankly not credible to suggest that, at that point, there has been an insufficiently rigorous process. Neither can I see what benefit there would be in requiring that a court should look at a case where the subscriber does not appeal but accepts that the notifications are valid and that the measure is properly applied. That was the whole purpose behind building in these appeal procedures at every stage.

We do not want to apply technical measures to anyone. We want them to stop infringing copyright. We also do not want to drag people before the courts, which is always a stressful experience for anyone, unless there is a genuine need to do so. The appeals route we have set out should offer a less stressful, less expensive route for the first appeal, as we have already discussed and given assurances on, but it does require the final appeal to be heard by a judicial body, ensuring that the subscriber does have the equivalent of the protection of a court. We believe that that is right.

Finally, the question of multiple IP addresses is so technical in nature that we will reply to the noble Earl in writing. On the question of the EU provisions, we do not believe that anything we are proposing will conflict with them. We have checked the position carefully and we adhere to our view in that respect. I am afraid that we cannot support the amendment and I urge the noble Lord, in taking into account the points I have made, to withdraw it.

I am most disappointed with that response. The first part of what the noble Lord said is quite right. I agree that the evidence needs to be subject to appeal and that there should be an appeals tribunal to check the process, the evidence, and the association of various offences under one address, and the title. All that can be dealt with by an administrative tribunal. However, my understanding of sanctions at this level is that the term “judicial tribunal” would not apply to the tribunal that is set up indirectly by the Bill. It is important that the Minister should let us know, before the Bill completes its passage through the House—or, if necessary, in another place—quite how the tribunal is to be constituted. Would it have legal representation? If, as the Minister said at the end of his remarks, it is genuinely equivalent to a court, I might at least consider the argument. At the moment, it seems that there is no parallel situation where, at the final point of imposing a sanction, there is no ability to appear before a court.

The noble Lord referred to this as a “graduated approach”. It is a one-step graduated approach—from warning through to second and third warnings, but straight from there to imposing sanctions which could be very detrimental to the subscriber—and, as I said, it will operate regardless of whether the subscriber is the actual perpetrator. The only suggested equivalent to this is the driving licence. If you get three points on your licence, you do not have a genuinely graduated penalty because that is two or three steps of penalty, and at the last knockings, you can appeal to a court.

I do not think that in any of the sanctions regime operating in our legal system, either civil or criminal, there is an exact equivalent to this. It therefore has wider implications than the providence of this Bill. If there are equivalents and if the nature of the tribunal is such that it is genuinely the equal of a court, will my noble friend spell that out to me and to other noble Lords before Third Reading? If he can manage to convince me, that is fine, but I have seen nothing which would do that at this point. If he cannot convince me, I will want to return to this issue at Third Reading—even if I bring nothing else back. I hope that other noble Lords will themselves consider the implications of this—in particular, as the noble Baroness, Lady Miller, has said, the Front-Benchers and Ministers. In my judgment, we are taking quite a significant step here. I hope that the noble Lord can convince me in the interim, but at this point I certainly have not been convinced. I shall withdraw the amendment so that we can proceed with the Bill, but I am deeply worried about these provisions as they stand.

Amendment 103 (to Amendment 100) withdrawn.

Amendment 104 (to Amendment 100) not moved.

Amendment 100 agreed.

Clause 14 : Enforcement of obligations

Amendments 105 to 107

Moved by

105: Clause 14, page 16, line 44, after “provider” insert “or copyright owner on whom the penalty is imposed”

106: Clause 14, page 17, line 1, after “provider” insert “or owner”

107: Clause 14, page 17, line 4, after “provider” insert “or owner”

Amendments 105 to 107 agreed.

Clause 15 : Sharing of costs

Amendment 108 not moved.

Amendment 109

Moved by

109: Clause 15, page 17, line 23, leave out from “to” to end of line 24 and insert “a subscriber appeal or a further appeal by a subscriber to the First-tier Tribunal, the subscriber.”

Amendment 109 agreed.

Amendment 110

Moved by

110: Clause 15, page 17, line 29, at end insert—

“( ) payment by an internet service provider of a contribution towards the costs that a copyright owner incurs in generating copyright infringement reports”

My Lords, the intention of this amendment is to ensure that the costs incurred by rights holders in generating copyright infringement reports under the provisions of the initial obligations code are taken into account when framing the provision on the sharing of costs. Currently, the Bill makes reference only to the costs that will be incurred by internet service providers and Ofcom. There is a clear lacuna. The copyright owners’ costs are nowhere to be seen in the Bill, yet they are and they will be considerable and therefore deserve to be recognised and reflected in these provisions.

Copyright owners’ costs are incurred at the very first step of the notification process. In order to detect copyright infringement within peer-to-peer networks, rights holders have to spend considerable sums, usually with third party providers, to defend infringements, generate the copyright infringement reports and send these to internet service providers. In short, none of the Bill’s measures on reducing online infringement works unless copyright owners first spend money. It is sometimes suggested that these costs are optional and that rights holders are under no obligation to incur them. That may be strictly true in the sense that they are not being imposed by statute, but the harsh practical reality is that it is an economic imperative for rights holders to spend money on detecting infringement.

As has been mentioned in earlier debates on the Bill, the music industry alone stands to lose £200 million of revenue to online copyright infringement this year alone. The cumulative loss between 2007 and 2012 will be £1.2 billion. The figures for the film industry are similar. No industry losing that level of revenue can afford not to invest in combating it. If there is a choice to incurring those costs, it is a Hobson's choice. Rights holders already invest in infringement detection, but currently much of that activity is to no avail. Internet service providers are under no obligation to process the copyright infringement reports and, indeed, currently none does so. The initial obligations code will change that. It will require ISPs to call on the CIRs. That will make it possible and viable for copyright owners to up the level of detection activity. The Bill means that the ISPs have to process the CIRs, their capacity for dealing with them will increase and there will be meaningful levels of engagement with copyright owners.

The entire logic behind the measures in the Bill is to reduce unlawful file-sharing by about 70 per cent. That represents a considerable sum. One of the main ways to achieve that is through notification having a deterrent effect on infringements. We have had lots of discussions, and I am sure that we will have even more, on that. That is estimated to involve about 7.3 million people. The more notifications that can be sent to as large a number of infringers as possible, the more marked that effect will be and the better off the creative industries and the whole economy will be. To this end, the Bill must be structured so as to optimise the ability of copyright owners to use the system, not lumber them with the undue burden of all of its costs. Otherwise, we are just creating an elaborate structure that will never be used and, by extension, just will not work.

There is also a question of fairness to be addressed. We see from the draft statutory instrument on costs that the department has published that rights holders will be expected to meet some of the ISPs’ costs of sending notifications. The ratio in square brackets in that document is a 75:25 split. We are told that that is an indicative level, but it has achieved the status of a working assumption. That means that rights holders will have to pay three-quarters of the costs that ISPs incur in meeting their statutory obligations under the Bill. Let us bear in mind, again, that rights holders will have already met 100 per cent of their costs in raising copyright infringement reports.

Furthermore, it must be borne in mind that it is the copyright owners and the creative sector that has been losing money to infringement over the past decade. The ISPs have not lost any revenue as a result of piracy. Indeed, it is argued by some—although, I agree, not by all—that their businesses have actually prospered in part because of the growth in consumers keen to get online so that they can download music and films, often unlawfully. Again, the amendment is an attempt to bring some fairness and balance to the equation of costs.

To conclude, the amendment would allow the Secretary of State to take account of the costs necessarily incurred by copyright owners in using the notification system. I hope that it will find favour with the Minister, and I beg to move.

My Lords, the noble Baroness introduced the amendment very cogently. I do not want to say much more other than I believe that the way that the clause is drafted is rather strange in the lack of balance between the different stakeholders involved. I very much hope that the Minister will address that in his usual thorough fashion.

I see that this is an attempt to introduce balance, but if it were to be adopted, we would have to include some exemptions and exceptions. As I mentioned earlier, Queen Mary, University of London, effectively qualifies as an internet service provider because it issues addresses to students, and such things. As I mentioned, it currently has three security people in charge of 20,000 connections. It would have to take on considerably more staff if it were to issue a lot of these reports. I hope that the Minister will consult the education department and other people who are budget holders about giving a considerably greater allocation of money to some such establishments before just doing that, willy-nilly. I can see why for some commercial operators that may be all right, but certain establishments must be exempted.

My Lords, I do not want to be seen as the defender of the ISPs’ interests, but the point about them is that whatever costs they incur will be passed on to consumers—all consumers, including those who have never unlawfully file-shared or made any other infringement of copyright. It is therefore in the interest of consumers to ensure that the ISPs do not incur excessive costs. It would be helpful to know whether 75:25 is more or less set in concrete. We could argue that that is a bit of a compromise. I would oppose anything that implied a heavier payment by the ISPs towards the rights holders covering their costs, because all that will end up on the millions of individual consumers, most of whom are not the problem.

My Lords, we made it clear. We think that the bulk of the cost of the process should fall to copyright owners. They are the main beneficiaries from a change in consumer behaviour from unlawful to legal sources of content. However, we feel that ISPs should share some of the burden to ensure that they carry out their obligations in an efficient and economic manner and have an incentive both to reduce infringement and to participate in business models—points made during our debate. New Section 124L(2) does not specify the costs that ISPs may be required to share under the cost-sharing order. That is a matter to be consulted on prior to the order being made. In principle, therefore, the order could make the provision in the amendment. However, we do not intend such provision to be made, so we do not think that it would be right to suggest that it might be done by particularising it in subsection (3), as the amendment does. It does not seem right to require ISPs to subsidise copyright owners acting to defend their copyright. In fact, that would impose a double cost on ISPs: they would subsidise copyright owners in detecting infringements but have no control over the level of detection activity and cost.

We tried to be helpful about this in the code. We gave a split of the costs which was indicative—it was not set in stone by any means. People asked us to give them an idea, so we suggested an indicative split. It will be the subject of consultation, and surely that is the right way forward. I cannot see how it can be reasonable, proportionate or fair for copyright owners to have their cake and eat it in the manner suggested. As I said at the outset, they are the main beneficiaries. It is right and proportionate that they should bear most of the costs. I end by saying that the ratio that we suggested was indicative will be subject to consultation. In the light of my comments, I hope that the noble Baroness will feel able to withdraw the amendment.

My Lords, I am grateful to the Minister for his reply, even though I am not exactly pleased with what he said. I am most grateful to the noble Lord, Lord Clement-Jones, for his support. I am also grateful to the noble Lord, Lord Whitty, and the noble Earl, Lord Erroll, for the points they made, even though they were not in support of the amendment.

We ought to bear in mind that many rights holders do not have vast sums of money. This creative industry creates huge numbers of jobs and is hugely productive to our economy. If we do not take a proper, balanced and fair look at the costs proposed in the Bill—which I support in many ways—the damage this will do to the industry when it comes into effect will be to our peril.

I shall bear in mind what the Minister said and read it carefully. However, I am not entirely convinced and I may want to come back with an amendment at Third Reading. In the mean time, I beg leave to withdraw the amendment.

Amendment 110 withdrawn.

Clause 16 : Interpretation and consequential provision

Amendment 111

Moved by

111: Clause 16, page 18, line 40, at end insert—

““subscriber appeal” means—

(a) in relation to an initial obligations code, an appeal by a subscriber on grounds specified in the code in relation to—(i) the making of a copyright infringement report;(ii) notification under section 124A(4);(iii) the inclusion or proposed inclusion of an entry in a copyright infringement list; or(iv) any other act or omission in relation to an initial obligation or an initial obligations code;(b) in relation to a technical obligations code, an appeal by a subscriber on grounds specified in the code in relation to—(i) the proposed taking of a technical measure; or(ii) any other act or omission in relation to a technical obligation or a technical obligations code;”

Amendment 111 agreed.

Amendment 112 had been withdrawn from the Marshalled List.

Clause 17 : Power to amend copyright provisions

Amendments 113 to 120 not moved.

Moved by

120A: Clause 17, leave out Clause 17 and insert the following new Clause—

“Preventing access to specified online locations for the prevention of online copyright infringement

In Part 1 of the Copyright, Designs and Patents Act 1988, after section 97A insert—

“97B Preventing access to specified online locations for the prevention of online copyright infringement

(1) The High Court (in Scotland, the Court of Session) shall have power to grant an injunction against a service provider, requiring it to prevent access to online locations specified in the order of the Court for the prevention of online copyright infringement.

(2) In determining whether to grant an injunction under subsection (1), the Court shall have regard to the following matters—

(a) whether a substantial proportion of the content accessible at or via each specified online location infringes copyright,(b) the extent to which the operator of each specified online location has taken reasonable steps to prevent copyright infringement content being accessed at or via that online location or taken reasonable steps to remove copyright infringing content from that online location (or both),(c) whether the service provider has itself taken reasonable steps to prevent access to the specified online location,(d) any issues of national security raised by the Secretary of State.(e) the extent to which the copyright owner has made reasonable efforts to facilitate legal access to content,(f) the importance of preserving human rights, including freedom of expression, and the right to property, and(g) any other matters which appear to the Court to be relevant.(3) An application for an injunction under subsection (1) shall be made on notice to the service provider and to the operator of each specified online location in relation to which an injunction is sought and to the Secretary of State.

(4) Where—

(a) the Court grants an injunction under subsection (1) upon the application of an owner of copyright whose copyright is infringed by the content accessible at or via each specified online location in the injunction, and(b) the owner of copyright before making the application made a written request to the service provider giving it a reasonable period of time to take measures to prevent its service being used to access the specified online location in the injunction, and no steps were taken,the Court shall order the service provider to pay the copyright owner’s costs of the application unless there were exceptional circumstances justifying the service provider’s failure to prevent access despite notification by the copyright owner.

(5) In this section—

“copyright owner” includes a licensee with an exclusive licence within the meaning of section 92 of this Act,

“infringing content” means content which is produced or made available in infringement of copyright,

“online location” means a location on the internet, a mobile data network or other data network at or via which copyright infringing content is accessible,

“operator” means a person or persons in joint or sole control of the decisions to make content accessible at or via an online location, and

“service provider” has the meaning given to it by section 97A(3) of this Act.

(6) Subsections (1) to (5) shall come into force on such day as the Secretary of State may by order appoint not less than 3 months and not more than 12 months after subsections (1) to (5) have been notified to the Commission of the European Communities (“the Commission”) in accordance with the obligations of notification imposed by Directive 98/34/EC.

(7) If any comments are received from Member States of the European Union or the Commission after subsection (1) to (5) have been so notified and the Secretary of State reasonably considers amendments are necessary to give effect to such comments, he may make the necessary regulations within the period referred to in subsection (6)(a), to amend subsections (1) to (5).””

Amendment 120A agreed.

Amendment 121 not moved.

Clause 18 : Powers in relation to internet domain registries

Amendment 121A

Moved by

121A: Clause 18, page 22, line 27, at end insert—

“( ) the failure is an issue reasonably within the responsibility of the registry and the registry has not taken reasonable steps to respond to this failure”

My Lords, I raised this issue previously. It is a simple matter and I hope that the reason the Minister has not tabled an equivalent amendment is because he is going to accept mine.

If the Secretary of State is to appoint a manager to run a registry because it is not performing properly, there is no point in doing so if the manager is not able to do anything about the failure anyway. If the failure is an issue which was not within the responsibility of the registry, what on earth is a manager going to do? What is the purpose in putting in a manager? This provision will allow the use of some other external excuse in order to take over the management of a registry. This is a minor protection, one might say, because otherwise there is no point in putting in a manager.

My Lords, if the noble Earl were to broaden his remarks a little to say how big a problem would be required before a manager were put in, I might not have to move my next amendment.

My Lords, I wish to say something about the amendments of the noble Lord, Lucas, which I fully support for the same reason. When we were discussing the Computer Misuse Act and I wanted to change the word “likely” to “more likely than not”, it was explained that “likely” meant “more likely than not” in legal terms. We have the same thing here: how serious is “seriously”? These qualifiers are needed to enable the normal person to understand it. However, if the lawyers assure the noble Lord, Lord Lucas, that “seriously” is implied by the previous mention of the word, that may clarify the situation.

My Lords, what is proposed here is a further test of a relevant failure by an internet domain registry. The effect of the amendment is that a registry could delay or avoid action by claiming it could do nothing because it was not its responsibility. This would leave the Secretary of State powerless to act where a registry had taken reasonable steps, even when those steps had entirely failed to sort things out. We have already placed on record that we would not expect a registry to act beyond its powers to correct any failure that it could not reasonably address. However, to put this in the Bill would cause difficulties, as I have explained.

The Secretary of State is bound to act reasonably whenever he makes a decision because his decision is always subject to judicial review. I can assure noble Lords that such a decision would not be taken lightly. It is unlikely that a domain name registry would not have the authority and capability, for example, to suspend a domain name, or take down a site using a domain name issued by that registry, if it was requested to do so by the relevant authorities because of its adverse effects on the interests of consumers and so on. For example, a registry such as Nominate, with its exemplary record for dealing with domain name abuse and its best-in-class dispute resolution system, would need no such provision, but it could afford substantial protection to a rogue registry. I have referred to Nominate but there are other registries and, in the future, there is likely to be a significant increase.

I trust the noble Lord will feel sufficiently reassured to enable him to withdraw his amendment. I shall address the question posed by the noble Lord, Lord Lucas, when we come to Amendment 122.

My Lords, I find it greatly reassuring that the Minister believes that all Secretaries of State in the future will always act reasonably. I know that they have a duty to do so but, unfortunately, history shows us that this does not always happen.

It would have been nice to have this provision in the Bill because it clarifies matters. Judicial review can be expensive and time-consuming and is not a realistic route to take. Although I realise that it is there as a longstop, it would be a difficult process to go through. I am sad that the Minister will not accept the amendment, but I have no intention of pressing it.

Amendment 121A withdrawn.

Amendment 122

Moved by

122: Clause 18, page 22, line 29, at beginning insert “seriously”

I thank the noble Lord, Lord Lucas, for giving me the opportunity to address the point that concerns him. It picks up on the point made previously by the noble Earl, Lord Erroll. We believe that the Secretary of State is bound to act reasonably—not because he is always a reasonable person but because, whenever he makes a decision, his decision will always be subject to judicial review. That is the point I have tried to emphasise. Deciding whether the failure of the domain name registry is serious enough to warrant action is not an exception; neither is it a decision that would be taken lightly.

The effect of qualifying “adversely” with the word “seriously” would widen the grounds of legal challenge, with all the delay that would entail at a stage when urgent action against a registry may be necessary to protect businesses and consumers. It continues to be our view that it must remain within the Secretary of State’s reasonable judgment to decide on the facts available whether the adverse effect is sufficiently serious to warrant intervention, and not within the judgment of the court.

The hurdle for taking action against a registry is already a high one; the trigger is not light, as I have explained. A set process must be gone through and the registry will have the opportunity to address the Secretary of State’s concerns before he can even consider exercising his other powers in this area. I hope in the light of that explanation the noble Lord will feel able to withdraw his amendment.

Amendment 122 withdrawn.

Amendment 123 not moved.

Amendment 124

Moved by

124: Clause 18, page 22, line 34, at end insert—

“( ) In subsection (3) “prescribed” means prescribed by regulations made by the Secretary of State.

( ) Before making regulations under subsection (3) the Secretary of State must consult such persons as the Secretary of State considers appropriate.”

My Lords, we have listened carefully to the points made in Committee by the noble Earl, Lord Erroll, about the need for prior consultation. It was always the Government’s intention to consult before the Secretary of State decided to exercise the powers. The amendment establishes a requirement in the Bill for the Secretary of State to consult before making regulations prescribing either the practices considered to be a relevant failure of a registry or the arrangements registries have in place for dealing with complaints. I hope this will satisfy noble Lords. I beg to move.

I thank the Minister for this amendment, which to a large extent answers the concerns I raised on the last amendment. I should probably have grouped them together, but I had not fully understood the implications. I thank the Minister for listening.

Amendment 124 agreed.

Amendment 125

Moved by

125: Clause 18, page 22, leave out lines 40 and 41

Amendment 125 agreed.

Clause 19 : Appointment of manager of internet domain registry

Amendment 126

Moved by

126: Clause 19, page 23, line 40, leave out “and any consequences of the failure”

My Lords, it was never the Government’s intention that a registry would have to pay compensation to any party affected by a serious failure of a domain registry. The words,

“any consequences of the failure”,

were meant to ensure that a registry would ensure that the failure concerned never happened again, as well as correcting the failure itself. We fully realise that these words could be open to misinterpretation so we have decided simply to delete them. Instead, we propose to rely on the fact that when a registry takes steps to remedy a failure, it would want to make sure that the failure did not recur. I beg to move.

I thank the Minister again. This goes a long way towards reassuring the registries, which are concerned that there are huge consequential loss implications.

Amendment 126 agreed.

Amendment 127

Moved by

127: Clause 19, page 24, line 10, at end insert—

“( ) The Secretary of State must discharge the order before the end of the period of 2 years beginning with the day on which it was made (but this does not prevent the Secretary of State from making a further order in the same or similar terms).”

My Lords, we considered the points made in Committee by noble Lords on the question of how long the appointed manager to an internet domain registry would be in place. We were particularly struck by fears that a manager sent in temporarily to correct the failure of a registry could end up as a permanent appointment. As I have said, nationalisation of a registry is certainly not the Government’s intention. The amendment will put a two-year limit on the order appointing a manager. I hope this will satisfy the concerns expressed by noble Lords. I beg to move.

Amendment 127 agreed.

Clause 20 : Application to court to alter constitution of internet domain registry

Amendments 128 and 129

Moved by

128: Clause 20, page 25, line 25, leave out “and any consequences of the failure”

129: Clause 20, page 25, line 35, leave out “and any consequences of the failure”

Amendments 128 and 129 agreed.

Clause 21 : Functions of C4C in relation to media content

Amendment 130

Moved by

130: Clause 21, page 27, line 45, at end insert—

“( ) In section 295 of that Act (involvement of C4 Corporation in programme-making) in subsection (1) for “programmes to be broadcast on Channel 4” substitute “content for C4C services” and accordingly in subsection (2) of that section for “programme” substitute “content”.”

My Lords, I declare an interest as an associate of an independent production company. As I have said, we on these Benches welcome the fact that the Bill extends public service broadcasting duties across all of Channel 4’s platforms. However, I wish to move this amendment because of my concern, voiced in Committee, that there is nothing in the Bill to stipulate that the content of this extended remit must be commissioned from external sources.

The current wording allows Channel 4 to produce PSB programmes or online content in-house, provided it is not for the main channel. This could have serious negative consequences for the independent production sector. It also risks allowing Channel 4 to pursue a BBC-style route, while what we want is diversity in our broadcasting system. It is the very way in which Channel 4 commissions its programmes that has resulted in its unique identity and reputation for creativity and innovation. Channel 4 was conceived as an open broadcasting authority, commissioning from independent production companies—a publisher-broadcaster. In-house production goes against its whole ethos.

In Committee, the noble Lord, Lord Puttnam, sought to reassure me by pointing out that during the four years he has been deputy chair of the Channel 4 board, there has never been any discussion about production being brought in-house. The Minister gave the same reassurance in the letter that he sent me. My response is that if that is the case, why is there such concern about putting it in the Bill? More cynically, who is to say—and here I rather echo the noble Earl, Lord Erroll, on all Ministers following the same path—what will be discussed and agreed to once the noble Lord, Lord Puttnam, is no longer imparting his wisdom as a member of the Channel 4 board? I beg to move.

My Lords, I am not sure I can agree with the noble Baroness, Lady Bonham-Carter. After all, Channel 4, although publicly owned, is unlike the BBC, not publicly funded. I would therefore have expected that, in the current economic climate, where all media dependent on advertising revenue are going through a very difficult time and a major struggle even to survive, any amendment to the Bill would loosen the regulatory shackles imposed in an analogue age rather than extend them.

Bear in mind, too, that the balance of power has changed remarkably since 1982 when Channel 4 was introduced. We rightly needed to give maximum protection to independent producers faced with the then duopoly of ITV and the BBC. That pattern has now changed; some of the independents are now very big. While it is important, as the noble Baroness acknowledged, to recognise that Channel 4’s core remit on Channel 4 itself remains subject to the same regulatory regime, it should be given maximum freedom to meet the broader remit that the Bill imposes on it.

My Lords, I again declare my interest as deputy chairman of Channel 4. I will try to clarify the situation, as seen from the channel. First, there is an absolute, genuine, self-denying ordinance. Channel 4, as the noble Baroness said, was created as a route to market for independent production. I make no apology for the fact that I was part of the lobby group in the late 1970s that persuaded Willie Whitelaw and the then Conservative Government to create a quite brilliant invention.

I speak for myself and not on behalf of the channel, but what the channel seeks to preserve is the ability to innovate. Innovation requires that we invest from time to time in material that has no commercial value whatever. I am particularly keen to protect our 4iP project. It is, effectively, the channel’s R&D department. Total expenditure is around 3.5 per cent of the total content budget. To be unable to spend on R&D would, in the long run, potentially cripple the channel. None of us knows how successful the experiments being carried out in the digital area will be, and there is no way of knowing. What is certain is that we are moving into uncharted territory.

There is no commercial competition for what 4iP does. It works, where possible and most of the time, in partnership with other organisations. My hope—and, I think, that of the rest of the Channel 4 board—is that what will spin out of the activities of 4iP is a new industry, offering opportunities to new production companies in new ways to create new revenues. That cannot be done unless, within the channel, we have the freedom to spend our own money as intelligently as we can on research and development. There is nothing to look for behind that. It is why the channel is grateful to the Government for being given the freedom to pursue the matter in the way it presently does.

My Lords, sadly, I do not support the amendment. What we have just heard from the noble Lord, Lord Puttnam, is very important. Channel 4, with which I have had quite a few brushes over the years in one capacity or another, has nevertheless done a pretty magnificent job, particularly in its major role of public service broadcasting, especially for children. As the noble Lord, Lord Puttnam, said, not to have the capacity to spend on research and development at this time of enormous change would be a great pity. I am afraid I cannot support the amendment.

My Lords, I am grateful to noble Lords who have contributed to this short debate, and particularly to the noble Baroness for moving the amendment. I apologise for missing her first two or three sentences. However, I am well aware of her concerns in this area, and we looked at these issues in Committee. In many ways, the other contributors to the debate have largely made the case that the Government make in response to the amendment. Noble Lords are concerned that Clause 21 might encourage C4C to shift public service content from Channel 4 on to other platforms to get round the prohibition. However, I cannot articulate the position any more graphically than my noble friend Lord Puttnam, who has declared his interests. His expertise and knowledge of the issue are valuable.

We are not reducing Channel 4’s public service obligations, so for the foreseeable future the bulk of C4C’s public service content will continue to be delivered on Channel 4. Even beyond the licensed public service channel, the publisher-broadcaster model is likely to remain C4C’s principal approach. Our worry is that a blanket prohibition on in-house production by C4C, across all platforms, would be especially problematic in relation to new media, where the operation of technical infrastructure, software and content need to be integrated. C4C needs to maintain in-house production capability, even though the great majority of content is commissioned externally. As regards the concept that this is the R&D function translated from a different context, the point holds that this is important to Channel 4. As regards C4C’s digital TV channels, although there is currently no prohibition on in-house production, C4C commissions all the original programming on these channels from independent producers. The noble Baroness knows that all too well and I am in great danger of spelling out facts of which she is all too well aware. I ask her to withdraw the amendment but to rest assured that we have considered this issue carefully. We are aware of the anxiety. However, for the reasons that I have given in terms of the role of Channel 4 and what we see for its future, I do not think that her anxieties are necessarily well founded. Therefore, I hope that she will feel able to withdraw the amendment.

I thank the Minister for his reply. I accept the need for flexibility expressed by other noble Lords. However, that flexibility already exists. Section 295 of the Communications Act prevents Channel 4 making programmes in-house except to the extent that Ofcom may allow. Therefore, if Channel 4 wishes, it can seek Ofcom’s approval to make programmes in-house. We are not proposing any change to that condition. We would have felt happier if we could have persuaded the Government of the need for this amendment. However, I beg leave to withdraw it.

Amendment 130 withdrawn.

Clause 26 : Report by OFCOM on public teletext service

Amendment 131

Moved by

131: Clause 26, page 33, line 22, at end insert—

“( ) OFCOM must publish every report under this section—

(a) as soon as practicable after they send it to the Secretary of State, and (b) in such manner as they consider appropriate.”

My Lords, we discussed these issues earlier this afternoon. This amendment requires Ofcom to publish each report prepared on the public teletext service. Ofcom will need to publish each report as soon as practicable after submitting it to the Secretary of State. I have been challenged on how quickly that will occur. I have indicated that the Secretary of State will seek to ensure that Ofcom meets its obligations in that regard.

The Secretary of State is already required to lay Ofcom’s report before Parliament if he decides on the basis of that report to make an order under Clause 27 to remove Ofcom’s duty to secure provision of the public teletext service. We consider that to add the publication of the reports as well will raise public awareness of the potential cessation of the public teletext service. Publication will also allow public access to the reports regardless of whether the Secretary of State makes an order under Clause 27.

The Government take the public interest in the teletext service seriously. This amendment reflects that concern. We know how much the service is valued. The amendment helps to ensure that that is recognised. I beg to move.

Amendment 131 agreed.

Clause 28 : Appointed providers of regional or local news

Amendment 132

Moved by

132: Clause 28, page 35, line 4, at end insert—

“( ) must be made subject to such conditions relating to the form, character and quality of the relevant media content as OFCOM consider appropriate,”

My Lords, in moving Amendment 132, I wish to speak also to Amendments 133, 134 and 135. This amendment is tabled in order to introduce quality as a requirement when appointing independently funded news consortia to provide regional news for an area. We all have an interest in maintaining well made, impartial news programmes in the nations and regions—ones that attract audiences, appeal to advertisers and complement the ITV or STV brand. This is what the public expect and what they deserve. As it stands, we do not think that the Bill places enough emphasis on the importance of the quality of the programmes made by the news consortia. This amendment seeks to redress this. I beg to move.

My Lords, the Government are pleased to accept this amendment and the other three to which the noble Baroness has spoken.

Amendment 132 agreed.

Amendment 132A

Moved by

132A: Page 35, line 4, at end insert—

“( ) must be made subject to such conditions as OFCOM consider appropriate for securing the standards objectives in section 319(2)(c) and (d) (impartiality and accuracy in programmes included in television and radio services),”

My Lords, I apologise for the last-minute changing of a couple of words, on the advice of parliamentary counsel, but in essence this is very much the same amendment as published. This is both a small thing and a very big thing. My noble friend Lord Bragg spoke about it in Committee eloquently and at great length. It is a small thing because the world would manage to survive without this amendment, but it is a big thing because it is an opportunity for the House as a whole to make its view clearly felt as regards the direction of travel we take on the plurality and impartiality of news.

I pulled two completely different but fascinating things out of a newspaper today. The BBC strategy review was published earlier in the week. It states that,

“global democratisation of opinion and argument [is not] as straightforward as it appears … Individual plurality may increase but collective, effective plurality decreases—with societies around the world left with fewer reliable sources of professionally validated news. The risk of bias and misinformation and, in some countries, of state control, may grow”.

That is paralleled interestingly by a piece from the Guardian online, discussing some things going on in the United States which concern me a great deal and which, I hope, concern the House. It states:

“[Al] Gore has become a symbol of the harsh partisanship that is ripping Washington apart. Graham”—

that is, Senator Graham—

“by contrast, harks back to a better time, when Democrats and Republicans could occasionally work together for the common good. Let’s hope there’s a little of that in our future as well”.

I argue that megaphone propaganda damages democracy. The point here is that, as we necessarily migrate into an era in which the difference between what is clearly professional broadcast news and current affairs and what is something that begins to work on the fringes—particularly under the new consortia that have been suggested—there will be a very real temptation to begin to move away from our traditional commitment to plurality and impartiality. The amendment is an attempt to reaffirm this House’s absolute commitment to insisting that that would be a move contrary to our notion of democracy, and an affirmation that there is no way in the world that we wish to move down the road that the Americans have chosen towards ever-greater partisanship and ever-greater megaphone politics. I beg to move.

My Lords, I agree entirely with everything that the noble Lord, Lord Puttnam, has said. My only point is that I wonder whether the amendment is necessary. Since the output is being broadcast by an ITV contractor, or STV in the case of Scotland, it is bound by the rules of impartiality anyway.

I add my support to the amendment of the noble Lord, Lord Puttnam. As I said earlier when I made a request to include quality as a requirement, we all have an interest in the maintenance of impartial news programmes. Plurality, which we believe in, must go hand in hand with a commitment to impartiality. Therefore, we on these Benches support the amendment.

My Lords, I certainly support the amendment, unless of course, following the point made by the noble Lord, Lord Gordon, the Minister tells us that it really is not necessary. Otherwise, it is absolutely crucial that we have an alternative provider of impartial and objective news, and every single effort that we can make must be made to ensure that that is the case.

My Lords, as the noble Lord, Lord Puttnam, indicated, we have a new situation because of the consortia coming together, and perhaps underlying this is a certain suspicion of the press. I used to be chairman of the Yorkshire Post. We were called Yorkshire Conservative Newspapers but had to change the name when the Queen came to open the building because it was not regarded as satisfactory. By the time I became chairman, it was called Regional Independent Media and everything was left to the editors, as I think is right and proper.

Having been brought up on the old Times, when impartiality and accuracy were the criteria, I think that what the noble Lord says is very sensible: impartiality and accuracy should be the objective. However, that should not preclude such services campaigning on particular issues. The BBC, which is governed by very much the same confines, also campaigns on particular issues. Therefore, the requirement is very much that any broadcasting organisation should be fair in what it does. Even if it is campaigning, it should be fair about how it presents the campaign. However, the noble Lord has made a very important point. Having slightly disagreed with him at a previous stage, which was very unusual for me, I am very glad that our alliance now continues as before.

I want briefly to raise a question that I am sure the noble Baroness, Lady Buscombe, has raised in the past on this issue. If part of the consortium is a local newspaper group, it cannot be bound—and certainly the noble Baroness, Lady Buscombe, would insist that it cannot be bound—by the laws of impartiality that cover television. That may be perfectly fair in terms of its newspaper production but, if it is part of a consortium and it puts a news item on its own website—the newspaper’s website, rather than the news provider’s website—do the laws of impartiality still cover that? I am slightly confused by that.

My Lords, I was sitting here blissfully enjoying the unanimity being expressed in all parts of the House. My noble friend Lord Gordon had a slight anxiety about whether the amendment was necessary. He is absolutely right that a condition requiring impartiality could already be imposed by Ofcom under the clause as it stands. However, making it mandatory in these terms reinforces the values to which all noble Lords have subscribed in this debate, and that is why it is neither otiose nor unnecessary but helpful. I shall therefore take a positive line on the amendment, which is just as well as I have just accepted amendments from the Liberal Democrat Front Bench and I am not sure that my noble friend Lord Puttnam would take too kindly to me being resistant to his.

Although all the other points raised were expressed in terms of favouring the amendment, which the Government are prepared to accept, there is one point to which I need to reply. My noble friend Lord Maxton asked what would happen when newspapers were part of the IFNCs. The requirement would apply to the IFNCs’ branded output only, regardless of the individual or media affiliation. It would not apply to the content produced by the newspaper member. I am sure my noble friend appreciates that the newspaper will maintain its independent stance when it operates under its own brand and funding. However, noble Lords should remember that we are talking here about public funding, and that is the burden of the amendment moved by my noble friend Lord Puttnam, which I am happy to accept.

Amendment 132A agreed.

Amendments 133 and 134

Moved by

133: Clause 28, page 35, line 5, after “such” insert “other”

134: Clause 28, page 35, leave out lines 16 and 17

Amendments 133 and 134 agreed.

Amendment 134ZA not moved.

Amendment 134A

Moved by

134A: Clause 28, page 35, line 30, at end insert—

“( ) Before inviting applications for an appointment under this section to provide news for all or part of a designated Channel 3 area, OFCOM must—

(a) give notice to the provider of the regional Channel 3 service for the area, and(b) have regard to any representations made by the provider of that service during the period specified in the notice.( ) That period must end not less than 28 days after the date on which OFCOM give the notice.”

My Lords, as was discussed at an earlier stage, it is important that any new arrangements for independent news in the nations and regions proceed in a spirit of partnership and agreement between the Government, the regulator and the Channel 3 licensees. As currently drafted, Clause 28 does not fully capture that intent, as it would in effect entitle Ofcom to select an appointed independent news provider and impose that provider on an existing Channel 3 licensee. These news programmes will appear on the Channel 3 network, and it is essential that they are compatible with the house style of the channel and that the Channel 3 brand is not compromised.

The purpose of our amendment is therefore to provide greater confidence on the part of the Channel 3 licensees that their views will be taken fully into account when and if the rollout of IFNCs proceeds in 2012. It would place a requirement on Ofcom to notify Channel 3 licence holders that it will invite applications for appointment, and it would place a further requirement on Ofcom to have regard to representations received from those Channel 3 licence holders. The definition of “representations” is already covered in relevant sections of the Communications Act.

Our amendment is designed to ensure that Ofcom has proper regard to what the Channel 3 licence holders say, and this includes objections to a proposal going forward in a particular nation or region. Given that the licensed broadcasters continue to carry all the statutory obligations and the necessary compliance risk for the continuing provision of the new service, this seems entirely right and fair. I would welcome further assurance from the Minister that if this amendment is accepted, the Government will ensure that the long-term implementation of IFNCs is carried forward with the full involvement and consent of the licensed broadcasters. I beg to move.

I rise briefly to support what the noble Baroness has said. The main point regarding the important providers of regional or local news is that we want the system to work well. ITV is crucial in this, and it seems to me that it has made a good offer. On the one hand, this will take from it responsibility for a £50 million per year cost; on the other hand, it has to broadcast the output of the new consortium on ITV1 and ensure that it makes good viewing for local audiences. It is important to have local choice in television, otherwise we will be turning the clock back to a period when the BBC had a monopoly. I do not think that anyone wants to go back to those days, including the BBC. It wants competition as well.

This amendment is therefore important. If the Government can express in the legislation their intention that the new consortium should be selected with the agreement and full involvement of the Channel 3 licensee, that will be all to the good. I thoroughly support what the noble Baroness said.

I, too, support the noble Baroness’s amendment. I spoke to an amendment roughly to this effect in Committee. From the viewer’s point of view, the transition from the IFNC’s output to the rest of the programmes should be absolutely seamless. He or she should not be able to detect the different origination of the output.

I also add my support to the amendment. It is clearly important that the brand that is attached to the ITV spectrum is maintained. It should be involved in every aspect and also ensure that the regional news is of the quality that we all expect it to be.

My Lords, I am grateful to all noble Lords because their comments would have been made from this Dispatch Box if they had not been articulated so ably by all those who have spoken. I shall dwell a little longer on the issue because the noble Baroness made one or two specific comments on which I want to give assurances and put the Government’s position firmly on the record.

We believe that securing news plurality under this clause should not be to the detriment of Channel 3 licence holders, as the noble Lord, Lord Fowler, said. The Government agree that Channel 3 licence holders should have more than just a say on whether an appointment should be made. Indeed, they should have the right to make direct representations to Ofcom where that appointed news service is to be carried in the schedules. This amendment clearly provides for more than just enabling Ofcom to take account of Channel 3 licence holders’ views. In securing a high-quality plural local and regional news services, Ofcom will want to see Channel 3 licensee co-operation—a point which the noble Baroness particularly emphasised. Representations made in this context could include anything of material importance and relevance to a Channel 3 licence holder. For instance, it could well involve objections or matters to do with schedule or brand protection.

We expect the consultation and representation process to achieve consensus between Ofcom and the Channel 3 licence holder before any appointment is made, especially where it directly affects the Channel 3 licence holder. In exercising its functions under this clause, Ofcom’s duties in law will apply. As a public body, it must act reasonably and give proper and due consideration to all representations received, as well as ensuring that its regulatory activities are transparent, accountable, proportionate, consistent and targeted. We would be surprised if Ofcom were to proceed on any other basis. I am grateful for the clarity that the amendment offers and I am pleased to accept it on behalf of the Government.

I thank the Minister for his welcome reply. I believe I have trumped the noble Lord, Lord Howard, in accepted amendments. I also thank the Minister for the extra reassurance that he has provided that the interests of Channel 3 licence holders will be properly recognised.

Amendment 134A agreed.

Amendment 135

Moved by

135: Clause 28, page 35, line 36, leave out “(5)(e)” and insert “(5)”

Amendment 135 agreed.

Amendment 136

Moved by

136: Clause 28, leave out Clause 28

My Lords, we have a number of concerns with Clause 28. Noble Lords will recall from previous debates that we do not believe that the solution to the problems in the regional and local media sector is more taxpayers’ money. I did not find the Minister’s comments in Committee particularly reassuring as he could give no clear indication of when and how these independently financed news consortia would become commercially sustainable.

The establishment of consortia that will be reliant on the state for subsidy is an approach to the need for plurality in local news which in our view is not sustainable. It seems almost a slur on the media to suggest that they cannot adapt to the new realities of the media market and become commercially successful. Indeed, a number of the organisations involved in bidding for the pilot schemes have indicated that they are doing so only because their rivals are also bidding, not because of a desperate need for public subsidy. They are quite capable of innovating, adapting and creating new models of local news provision that the public will like and which will be financially independent from Government.

That brings me to our second point. If we become reliant on public subsidy to provide regional news we are creating a system under which the appointed news providers would need to keep Ofcom, as the primary source of their funding, happy to an even greater extent than they would need to keep audiences happy. I cannot believe that that is good for the future of regional and local journalism. Equally worrying are the practical ways that this clause would implement the Government’s preferred model. We feel that the clause as drafted gives Ofcom far too much power in determining the output of the appointed news provider. It can shape the form and character of any media content that is produced. I am worried that the result will be an official world view as directed from Riverside House. I am sure this is not what Ofcom intends but it could be the result.

I see many problems with Clause 28 and I gently remind the Minister that my honourable friend in the other place described it as a “red line” for our party. I hope that our concerns will be heeded as opposition to its provisions seem to be growing. With so many problems apparent, I beg to move.

My Lords, I fully understand where the noble Lord is coming from and I see a lot of problems with intervening in one section of the market and not others. I can see local newspapers saying, “If there is Ofcom money going for regional television why not for local radio or newspapers?”. I see the problems, but on the other hand the noble Lord has to reflect on the fact that ITV has more or less said in terms that it cannot continue to provide regional news. Is he suggesting that we simply take away the licences and give them to someone else whom he feels will be able to provide regional news in the modern marketplace, or do we acquiesce in regional news on television being carried only by the BBC? There are real problems. This is not a perfect solution, but it is the least bad one.

The noble Lord, Lord De Mauley, made his point extremely eloquently, and it leaves me fairly conflicted. My experience of 20 years at Anglia Television makes me realise how difficult it is to create a financial model that works in this area. I thought long and hard about something that the noble Lord, Lord Howard, said in Committee. He talked, rightly, about something that will permanently remain in the quasi-public sector. I am not in favour of that. What attracts me in the Government’s proposition is the idea of getting a new shape, a new player, into the marketplace and then finding a mechanism whereby it can move off into private hands. I may be being Pollyanna-ish about it, but there is a lot in what the noble Lord, Lord De Mauley, said and in the points made by the noble Lord, Lord Howard, in Committee. On balance, I support the Government on this, with some concerns.

My Lords, I am the chairman of the Select Committee on Communications which made the proposal that the Government are acting upon, so I do not intend to jump overboard at this point. I believe it is a sensible proposal, and I will continue to support it. I understand what my noble friend said. He made the argument extraordinarily well. I shall make two points. The argument about public subsidy needs to be treated with a certain amount of caution because regional television has been supported by the implied subsidy from analogue broadcast. That is the whole point. Analogue has given an advantage to companies such as ITV, which is creating the new situation and the new position. Explicit subsidy and support may be a new concept, but implied and real subsidy and support is not.

What worries me more than anything else is the idea that at a regional level BBC television will have a monopoly. I do not want that. It would be a retrograde step. I sometimes say it takes us back to the 1950s, but it is worse than that because in the 1950s, at least we had strong regional newspapers. You do not have to be a great media expert to understand that regional newspapers are not what they were. I was chairman of a regional newspaper group about 10 years ago, and it has changed radically even in that small time. We will not go back to the old days. These points need to be considered, not least, I humbly suggest, by my own party because we do not want to have a position where at regional level the BBC determines the political and news output for television. That would put a vast amount of power in the hands of news editors and correspondents.

I regret that that is not entirely helpful to my noble friends, whom I support and like in every conceivable way, but I hope that they understand that I am not going to resile from the recommendations and proposals that I made only a short time ago.

My Lords, what is the role of a Minister when friends fall out in the Opposition? The noble Lord, Lord Fowler, has articulated an important case that emerged from his committee and which we have taken seriously. It is not a question of falling out among friends but of different perspectives in different parts of the Opposition. He will not be at all surprised or delighted that I am on his side on this rather than the official position put so ably by the noble Lord, Lord De Mauley. I congratulate him on the clarity with which he presented his reservations about the Government’s position. However, even if we descend to the point that my noble friend Lord Gordon suggested we should—namely, that the Government’s position is the least bad solution to a difficult problem—that is where the Government will rest.

I accept the point that my noble friend Lord Puttnam made. There is nothing about the Government’s proposals on this that are hard and fast for the future of news provision in this country. They are a response to the ever-pressing, growing problem, clearly identified by the noble Lord, Lord Fowler, of the decrease in other forms of expression of news and the crisis affecting television, which affected regional newspapers earlier. I heard what the noble Lord, Lord De Mauley, said about resistance to public subsidy, but the Government are setting up pilots to test the market and see whether the position proves effective and viable. There is no commitment that this should be long term. If the hopes of my noble friend Lord Puttnam are fulfilled—and we can have hopes in this area, given the creative abilities of our people in the media—why should this not be seed corn that is so successful that public funding becomes unnecessary?

The Bill is not the place to reach decisions on funding, but the House knows that the Government are moving judiciously in this area. This is not setting up a new brand of public subsidy of news, but creating opportunities for alternative news fora and creative forces to develop and present the only challenge to what would otherwise become a BBC monopoly, not even checked by the regional press, which did so in the past, but is regrettably not in a position to do so now. These are genuine shifts in the marketplace.

We should be concerned to safeguard the plurality of news and the competitiveness of news provision, and that is what the Government are concerned to do. I know the ogre that can be created. It is that this will be subject to the Orwellian monstrosity of Ofcom control of news: a deep-laid government plot to ensure that there is a monopoly controller who will eye us all from the television set, which will be the only provision we will get. No; that particular ogre will not materialise. Editorial judgment and control will remain precisely where they should be—with the news providers, who will need support in the early stages.

This is about securing the quality of delivery that audiences expect. They have high and proper standards when it comes to news provision. Every opinion poll that is ever carried out on television and news provision in this country emphasises that the public value the provision of news because of the standard and quality which all providers in this country have maintained thus far.

This is clearly a sticking point for the Opposition. They have made it clear that they want this clause out of the Bill, but unless action is taken, exactly the position described by the noble Lord, Lord Fowler, and his committee—the deliberations of his committee were important in these areas—will pertain, and the plurality of local and regional news and the news-gathering enterprise that underpins it will erode very quickly. The problem is that the erosion is quick at the present time and it is not obvious that the pace will not accelerate.

The clause is of great importance. I know that I will not persuade noble Lords opposite—after all, they have identified their position with clarity and force—but I hope they will not think it advisable to press this issue to a vote. Clause 28 deserves to be in a Bill that is part of a coherent whole in tackling this important issue. I have no doubt that noble Lords opposite recognise the importance of the issue. They cannot produce an alternative within the framework of the Bill, so I hope that they will allow the clause to remain and that the noble Lord, Lord De Mauley, will withdraw his amendment.

My Lords, I thank my noble friend Lord Fowler and the noble Lords, Lord Gordon and Lord Puttnam, for their contributions. I respect and appreciate their views. These things are not easy, as the noble Lord, Lord Puttnam, acknowledged. Noble Lords were generous to appreciate our preference for a commercially viable solution. I am therefore not at all surprised at the Government’s response. Indeed, I am pleased that the Minister at least acknowledges the ambition to wean the IFNCs eventually off public money.

Even so, I respectfully say that it does not bode well for the Exchequer in what will be very difficult times—or, for that matter, for the future of regional and local news—but I recognise that discretion is the better part of valour, so for this evening I beg leave to withdraw the amendment.

Amendment 136 withdrawn.

Clause 30 : Digital switchover

Amendment 137

Moved by

137: Clause 30, page 36, line 33, after “to” insert—

“(a) ”

My Lords, I tabled Amendments 137 and 138 again simply to get more detail from the Minister, as his assurances about these points were not wholly convincing. The amendments would give the Government an explicit requirement to take into account the views of radio listeners and local and community stations. The Minister argued that this was unnecessary because of the breadth of the requirements to consult that are already proposed and the commitment to consult widely. The problem with such vague assurances is that they can be quickly forgotten. The BBC currently states that the views of the BBC and Ofcom should be given due regard before the Secretary of State nominates a date for the digital switchover. It does not say too much about consulting widely or taking into account in any way those who are most affected by the switchover—the listeners. I hope the Minister can give more encouragement that the listener will not be forgotten in this whole process. I beg to move.

My Lords, I commend the amendments, which are a very constructive way of seeking further assurance from the Minister. Indeed, they very much reflect the concerns that I expressed from these Benches in the Clause 30 stand part debate in Committee. Assurances about the future of analogue radio in particular are so important. The noble Lord, Lord Young, and I engaged in a slightly semantic conversation about whether FM’s existence would be perpetual or whether it would simply be there for the long term. I think the assurances were that it would be there for the long term, which did provide some reassurance. However, the interests of the ultra-local stations and the consumers of the product of those stations are extremely important, and I very much hope that the Minister can cast more light on the future of analogue in the face of the digital switchover.

My Lords, I congratulate my noble friend on the amendment—I am now rowing back frantically—on a very important issue. It is so important, in fact, that the Select Committee on Communications is currently engaged in an inquiry on precisely this—the digital switchover—although a number of reasons have been adduced as to why it should be called not a switchover but various other names.

I do not intend to pre-empt our report, but I must say that it is generally a very important issue with the public and that there will be a public outcry if we get the radio digital switchover wrong. There could be a very big row indeed about this. My only reservation about the amendments is that I can think of quite a number of other issues on which I would like the Government’s assurance. There are, for example, 20 million car radios out there. What will happen to those? How will they be converted? What are the plans? There are so many issues here that either we will have a totally comprehensive list or we will simply have to ask the Minister at this stage for his current views. I think I probably speak for the committee when I say that there is public confusion at the moment about what exactly the plans mean to the individual consumer, and I cannot believe that that is a sensible way of proceeding. My noble friends on the Front Bench have raised a crucial issue to which we will have to return again, and very soon.

My Lords, I absolutely agree with what has been said so far. This is one of the greatest eye-openers. As we have proceeded with this Bill—particularly as it has run parallel to the deliberations of the Select Committee which the noble Lord, Lord Fowler, is chairing so ably—we have come to realise just how important radio is to so many people, whether to the disabled or to all of us, listening as we do for a vast amount of our time to the radio. However, this is clearly one of the areas in which there is still a need to reassure people locally. The idea was that analogue transmission could be switched off once 50 per cent of listening is to digital radio. Then there was the business of how long FM would be available once it is more or less accepted that there will be a change. As regards the production and selling of cars, the issue is when there will be sufficient technology to convert radios already in cars and to convert some DAB radios to the right level.

No one is trying to argue for a moment that the quality of digital radio will not be valued. But getting to that point will need a lot of reassurance to citizens. I would be grateful, as would I am sure other noble Lords, for further reassurance from the Minister that FM will be available ad infinitum, but certainly well beyond the point of switchover. That would do a great deal to reassure noble Lords who have looked into all this. But much more importantly, the citizens and the consumers—I come back to them because I am looking at this issue from both viewpoints—are crucial. I hope that the Minister will be able to give that reassurance.

My Lords, I do not have any problem with the sentiments behind the amendments. The only problem is that if those points are listed, it would look as though that is what the Government or Ofcom should give priority to, but they are only three of a myriad number of conditions to which they must give attention. Specifying that is almost counterproductive.

My Lords, I rather echo that point. In Committee, I expressed, as did many noble Lords, concerns about local and community radio stations and about the extension of FM. These are very important matters, but as other noble Lords have indicated in this short debate, there are other areas as well. In all this, I hope that we will continue to recognise that, while it has often been said that the switchover for television has gone very smoothly, the complexities in relation to radio are far greater. While supporting so much that lies behind these amendments, it would be a great shame, in a sense, to wreck it by omitting rather than being inclusive.

My Lords, I am grateful to all noble Lords who have spoken in this short debate, particularly the right reverend Prelate the Bishop of Manchester and my noble friend Lord Gordon, for identifying the weaknesses of the amendment and the nature of the issue on which the Government need to take care.

Perhaps I might say that if I was not going to take care after the Opposition Front Bench and the noble Lord, Lord Clement-Jones, had spoken in support of the amendment, I certainly was after listening to the noble Lord, Lord Fowler. First, he told me, as if I did not know, that there could be the most enormous row if this switchover went wrong. I could not agree with him more and I accept entirely what the right reverend Prelate has said. The switchover from analogue to digital for television is much easier than this exercise because of the diversity of radio opportunities and provision. But the noble Lord, Lord Fowler, produced an even greater anxiety for me when he mentioned car owners. He is right that we would not dare to get that wrong. I know that we are not far from a general election, but the idea that the Government are about to alienate 20 million car owners by telling them that their radios are defunct, out of date and will not work is somewhat unrealistic. The conversion of car radios is an important point that has to be established before a digital switchover could conceivably be considered a success.

We have been clear that an affordable in-car converter is key to the success of digital radio switchover. There are already devices on the market which will convert an FM car receiver to receive DAB. One would predict that this market will expand very rapidly. Very few markets move quite as quickly as the car accessories market, which helps to guarantee the sale of cars.

That point therefore will be taken into account, as will the other points about the importance for the Government of effective consultation before such a switchover could take place. We have made clear that, for the foreseeable future, the Government will consider FM radios to be part of the broadcasting firmament. Radio stations will want to combine to broadcast on FM to take account of the points that the right reverend Prelate drew to the attention of the House.

What date will all this be effected? That is a pointed and precise, but nevertheless very difficult, question. We have indicated that 2015 is ambitious, although it is achievable. If we do not set a target, there is no stimulus to all those who can make a contribution to effecting this successfully to get to work and do so. So we want a date and have identified 2015, but we recognise that it is a challenge. However, we accept the concept behind the amendments; namely, that the fullest consultation will be necessary. Otherwise, the almighty row anticipated by the noble Lord, Lord Fowler, will descend upon the Government who get it wrong.

Why do I resist the amendments, as we did in Committee? It is simply because consultation is written into the Bill already. We could not dream of going forward or of proposing that the Government could go forward with an issue of such significance to our people without the fullest consultation in order to guarantee that we do not fall into those dreadful traps to which noble Lords have called attention. Again, I am grateful to the Opposition Front Bench for drawing our attention to the necessity for care and consultation. That is part of the Bill and the amendments are unnecessary. Having stimulated a further debate, after the extensive one we had in Committee, I hope that the noble Lord will withdraw his amendment.

My Lords, can the Minister clarify the point about which a lot of people are concerned; namely, that whenever the point of switchover occurs, FM will continue beyond that point? A lot of small operators are very concerned about that.

My Lords, I wanted to indicate that. If I did not make it clear enough in my reply, we see FM continuing, but we also see the kind of criteria that will be necessary before we begin the process of significant switchover. As I have indicated, the Government will move with the greatest care with regard to this issue, as we have with television switchover. Noble Lords will know of the care that we have taken to make sure that groups who might not be able to make that switchover effectively because of limited resources are given support. Radio is much more complex and difficult, as the right reverend Prelate made clear. The Government are fully seized of that, which is why consultation is written into the Bill on this issue.

I thank the Minister for his comments, and I thank my noble friend Lord Fowler for his support. I was delighted to hear some support from the noble Lord, Lord Clement-Jones, after the sandbagging that I received from the noble Baroness, Lady Bonham-Carter. Having raised the issue and heard how sympathetic the Minister is to the potential problems—even though he dodged with his customary skill committing himself specifically to consulting listeners—I beg leave to withdraw the amendment.

Amendment 137 withdrawn.

Amendment 138 not moved.

Consideration on Report adjourned until not before 8.40 pm.