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As the Bill goes through Parliament, we really must decide what is proportionate and reasonable and how we balance the interests of copyright owners with our duty to our citizens to ensure that they are not put in fear and made to worry over something that they find extremely difficult to comprehend or defend themselves against. They have a deep feeling that they have been wronged because they know that they have not done what they are accused of.
The Government have not got the balance right, and the amendments suggest how we might start to tackle this. Somewhere in the Bill there must be a real understanding of the need for balance between copyright owners and citizens and that this is not a matter of heinous and absolute liability, such as sticking a knife into a person. This can be done unawares and can be extremely difficult to tackle in court. I beg to move.
Lord Clement-Jones: The noble Lord, Lord Lucas, has made some very important points. We debated this at some length on the previous day in Committee, but I should point out to the Minister that, having put various statements on the record on that day, I was inundated with correspondence. The impression was that the Solicitors Regulation Authority had received no complaints about the activities of ACS:Law Solicitors, and, it now transpires, of Davenport Lyons. In fact, there has been a torrent of complaints to the SRA, and I sent the Minister an e-mail, which I hope he has received, setting out at some length the material that I have received.
This is clearly a matter of great importance. Just as the noble Lord, Lord Lucas, has said, some of these firms are using some extremely unjustified and unpleasant ways against perfectly innocent people. I hesitate to use the word "innocent", but in a sense they are because they have not breached copyright. What that makes them, I do not know, but certainly they have not been acting illegally or are guilty of any criminal offence. The SRA is apprised of the matter, although perhaps it is not moving fast enough. The Minister and his colleagues in the business department and the DCMS should be fully aware that this is a hot topic and that there have been complaints of professional misconduct against the firms involved.
Baroness Howe of Idlicote: My Lords, as regards those who produce material which is shared without any remuneration to the originator, I am in favour of them being properly compensated for that which is downloaded. I speak as someone who, for the first time, has received a letter about ACS:Law Solicitors, which I found pretty disturbing, as I do the fact that ACS:Law Solicitors has up to six years to keep this correspondence hanging around. Even though the SRA has been contacted again, the matter does not seem to have moved on particularly fast. Of course, one is hearing only one side of the story, so I cannot say more than that.
It is worrying and I assume that the Minister will address this issue seriously in his reply. I gather from the shaking of his head that he is aware of at least some of the complaints that have been coming in his direction.
Lord Howard of Rising: My Lords, the amendments in this group build on my noble friend's suggestions of other useful criteria that should be included in any assessment by Ofcom. I have already mentioned briefly the cost of any measure and I should like to emphasise how important it is that proper scrutiny is given to the cost that will fall on internet service providers forced to implement the technology necessary to impose a technical measure.
Amendment 163 touches on a point raised much earlier in these debates. If technical measures are imposed crudely and in large numbers, perfectly legitimate internet companies might suffer. I can easily imagine a company setting up a lawful file-sharing site, notwithstanding the implementation of Clauses 4 to 9. If a technical measure is imposed on large numbers of subscribers that bans access to any file-sharing sites, rather than just those that provide unlawful material, a promising alternative could be strangled at birth.
Amendment 164 is self-explanatory. It seeks to tie the assessment under Clause 10 specifically to the progress reports under Clause 9. At the moment, one of the greatest weaknesses of these clauses is the lack of read-across from Clause 9 to Clause 10. This amendment would improve that.
Amendment 167 is essentially a summary of the points that have already been raised. I am sure that the Minister will be pleased to see that it is only a guideline for Ofcom to follow and not a prescriptive list. However, all the matters outlined in it are fundamental to whether a measure will be successful. The possibility that one
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I, too, have received correspondence about these people who are sending out bullying letters. I add my plea to the Minister, if only for it to appear in Hansard for the benefit of those people who have corresponded with us pointing out this appalling behaviour.
The Earl of Erroll: My Lords, these are extremely important amendments. They must be there to guide Ofcom in its deliberations. My noble friend said that the copyright resides with the originators, but usually it does not. It is owned by six large rights holders-copyright holding companies-because they have the originators under contract from day one. Only a very small amount of money filters out to the creators the work. Most of it is rental on the back catalogue owned by large rights holders. We have to keep that in the back of our minds when we are told that this will kill creativity-it is not necessarily so.
The main point I want to make is about the unintended consequences that may arise when we implement the technical measures and why Ofcom must take into account wider considerations The sort of thing that could happen is that a company sets up and sensibly wishes to deliver most of its stuff over the internet. It is selling into a market that also happens to coincide with people who have an age profile in the group that tends to download music-music being the easy one to catch as it is the most popular in this area. You could stop their market and bankrupt them overnight. It is a bit like secondary picketing by the trades unions: the same principle of trying to prevent one evil while actually creating another. The same applies to the Government in their delivery of services electronically to reduce costs to taxpayers. If we end up having to intervene to make this effective, by cutting off a tiny proportion of infringers, say 100,000, it could have an impact. If we tackled just 10 per cent of the infringers, which is not an enormous proportion, 700,000 people would be unable to use the internet properly. That is a significant part of the market.
Funnily enough, it would probably also penalise those with good, innovative methods of distributing music and film. At the other end of these connections will be subscribers who both download to sample stuff unlawfully and buy stuff lawfully. So it may have an effect on the market that we should be developing. This needs to be considered incredibly carefully. A final thing is proportionality and the EU. The European Parliament, in saying that people's internet could be cut off only by going through judicial procedure, recognised that these days it is almost a basic human right to have access to the internet. Our legislation must be proportionate or it will fall foul of EU legislation. On those grounds alone, proportionality must be put in it somewhere.
Lord Puttnam: My Lords, I want to clarify something that the noble Earl, Lord Erroll, just said. He rightly pointed out that the bulk of copyrights are owned by a
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Lord Young of Norwood Green: My Lords, new subsection (4)(b) allows the Secretary of State to direct Ofcom to carry out an assessment of the likely efficacy of a technical measure in relation to a particular type of internet access service. Amendment 161 would add "proportionality" and "objective justification" to the assessment. While I have sympathy with the view that these are important criteria, I do not think it is necessary for Ofcom to do this because they are points that the Secretary of State will have to consider as part of the decision whether to make the order to impose technical obligations, and on what terms.
On the other amendments in the group, new subsection (4) in Clause 10 sets out the steps that the Secretary of State might particularly direct Ofcom to carry out as part of conducting an assessment of whether technical obligations should be introduced, or taking steps to prepare for them. As such, it identifies the main things we consider it will be important should be done: proper consultation, an assessment of measures which would work and early preparation of a code. We are not suggesting that these are the only things that the Secretary of State might ask Ofcom to do as part of making an assessment, nor yet all the things that Ofcom would expect to include in an assessment in order to do it properly. I do not think it would be helpful to try to do that.
There is also a risk of duplication here. For example, the issues raised in Amendments 162 and 163 are likely in any case to be captured under the existing reference to an assessment of efficacy. So while there might be much benefit in the Secretary of State asking Ofcom to consider these and other issues, I do not think that they need to appear in the legislation. I hope noble Lords will take that into account.
On the much-discussed and debated ACS:Law, I am glad that it has at least been reported to the SRA but regret that no action seems to have been taken to date. I am not sure whether I have fully understood the point made by the noble Lord, Lord Lucas. I thought he was welcoming the Bill in that our process might well be described as taking a graduated approach. In the first instance, people will be sent a letter saying, "It appears that there has been an infringement. If it has been done unwittingly or by someone else, here is what you can do to remedy the situation". We are laying down what I think is a proportionate, reasonable and fair procedure. We have to ensure that it is all reflected in the code and that we build in all the rights of appeal and so forth, as we have discussed in our debates here
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I stress that so far as we are aware, firms are operating within the existing legal framework, a point which to a certain extent was confirmed by the noble Lord, Lord Lucas. It may not be a procedure that everybody likes, and in some cases I presume that people have been guilty of the offence, but we are saying that this Bill cannot be the vehicle to deal with it. As we have said, it provides a graduated response that seeks to change the culture and the behaviour.
I am glad that the noble Baroness, Lady Howe, is with us at least in principle and thus is in favour of proper compensation-that is what we are trying to achieve. The noble Lord, Lord Howard, asked about the costs to internet service providers. We share his concern because this has to be something that they are capable of dealing with and does not undermine their normal operating procedures. The costs associated with any technical measure will therefore be the subject of a separate statutory instrument and a new or revised code. All this will be subject to scrutiny and I take entirely the noble Lord's point that we keep control of it.
The noble Lord also talked about a rush to implement necessary steps. We are not going to rush this, and I hope that a future amendment will demonstrate our response to concerns that sufficient time is provided to see whether the first set of technical measures has had an effect before contemplating the need for further ones. We shall come back to that.
I listened carefully to what the noble Earl, Lord Erroll, said about the law of unintended consequences, but I do not think that we are in any way likely to stop legal markets operating overnight. There was a presumption that, assuming we did catch 700,000 people in our first attempt, all of them will carry on with their misbehaviour-assuming that they are misbehaving. I do not take that view; I think that we will be able to change them.
If we want to introduce some balance into this debate and an overall assessment about what we are trying to do, then I thank my noble friend Lord Puttnam for doing just that. These are not just minor infringements, and they apply not only to music, as my noble friend Lord Puttnam knows, because films are also very much affected by them. I quoted a case the other day in which the film "Avatar", on the very day that it was released, was downloaded, including the 3D version. We should not kid ourselves that these are just minor downloads of the odd piece of music.
The Earl of Erroll: My Lords, I just point out to the Minister that "Avatar" is the second-highest grossing film in history, so a few downloads has hardly affected it. I do not think that we can say that they are completely bankrupting the film industry. The fact that it has a technical aspect, the 3D, which makes it far more enjoyable to see in a cinema perhaps points the way that the industry should be looking.
Lord Young of Norwood Green: My Lords, I must admit that I struggle with the analysis of the noble Earl, Lord Erroll. He seemed to be saying that it does
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On the question of the telecom framework directive raised by the noble Earl, Lord Erroll, we believe that the provisions in the Bill are consistent with the final outcome of Amendment 138. That requires a fair and transparent prior process that allows the consumer the right to be heard. I have dealt with this issue on many occasions so I shall not take any more time. I hope that, in the light of the explanation and assurances that I have given, the amendment can be withdrawn.
Lord Lucas: My Lords, I suspect that we are not going to agree on "Avatar". It seems to me that the industry is being peculiarly stupid about it-it got 300,000 free advertisements. "Avatar" is something that you cannot consume sensibly on a small screen: you need the big-screen experience to appreciate all the work that they have put into it. The immediate consumption of it created an enormous demand for going to the cinema, which has benefited the film enormously. That is the fundament of this-we must get the industry to see this as an opportunity and not as a threat.
We must get the industry to be in there selling these downloads. If the industry had been in there selling at a dollar a time, it would be better off for it and it would still get the advertising. Its refusal to deal with the way that the world has moved on and with what technology makes possible, and its attempt to stick to old ways of doing things and to the idea that you can release a film in the United States today and wait six months to release it in the UK, is a looking-backwards attitude which we should not support through legislation. Yes, we should support copyright, but we should direct ourselves at real losses and not imagined losses. I do not believe that the makers of "Avatar" have lost a dollar; in fact, I think that they have gained a great deal from the piracy. We should not seek to punish people for losses that have not occurred.
When we come back to the question of what is going to happen on the Bill, after what I agree are shaping up to be quite reasonable preliminary procedures, we must have something to make sure that Norwich Pharmacal orders are not given, willy-nilly, to people who have not gone through this procedure. We have produced some comfort for the citizen in the Bill; we must at least make sure that judges consider whether or not this procedure should be used before Norwich Pharmacal orders are granted.
We must also do something about the quantum of damages that is being sought. In a civil procedure on a technical matter, it amounts to blackmail; the cost of defending one of these things is reckoned to be £10,000. You can get away with asking for £500 or £1,000 and be paid on most occasions without any effort having to be made to really establish guilt. It is straightforward legal blackmail, and we should do
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Lord Young of Norwood Green: I referred to the telecom directive. We have said numerous times-as the noble Lord said, we have been over this ground on many occasions in this Committee-that we will be compliant with the Human Rights Act as well as the telecom directive. I was trying to save the odd amount of time by not going over the same issue. As a noble colleague of mine once said, reiteration does not always enhance the value of the point.
Lord Lucas: No, my Lords, but eventually it seems to draw useful answers out of the Government. The fact that one has to ask the same question five or six times to get the answer that one is seeking is, I am afraid, just a characteristic of the way that Governments work sometimes.
The word "proportionality" in my Amendment 161 is important. I understand that the Government resist its inclusion. Since I was arguing yesterday against the inclusion of the word "proportionality" in a Bill and was successful in that, I suppose I should be content to be consistent. I hope that this means at least that the Government are converted as a result of the reverses they suffered yesterday. I beg leave to withdraw the amendment.
In the course of our debates, the Minister has reassured us that the technical measures will not be imposed without demonstrable failure of the initial obligations and that there will be a graded response. The question is: what will be the empirical evidence that the initial steps have failed to cure what is clearly an issue? I am not at all at odds with what the noble Lord, Lord Puttnam, had to say in that respect. We wish to see the proper upholding of copyright, but it has to be done-to use the word that the noble Lord, Lord Lucas, has almost but not quite resiled from-in a "proportionate" way.
On what basis will that be done? We do not believe that it should done purely on the basis of the Secretary of State's decision. Pure whim, the length of thumb of
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I hope that the Government will look again at this aspect because, in order to create confidence, technical measures are an important step. As we know, and to repeat what I said earlier, they have caused a great deal of controversy, but if they are to be introduced then that must be on the basis of proper evidence that the steps taken to date have been a failure. The only institution that will carry confidence and will be regarded as being sufficiently objective in those circumstances is Ofcom. That is the reason for Amendments 168 and 174. I beg to move.
Amendment 172 is intended to make sure that the industry has looked after its side of the bargain. In return for passing this Bill, we should be requiring that the industry moves ahead and makes product easily available on the internet in proper volume, at a proper price. Its failure to do this is the reason for the whole problem. This market developed and the industry refused to address it-it turned its back on it. People, particularly young people, said, "We are not having that. If they will not give us this stuff in the way that we want it we are going to get it". I have an enormous amount of sympathy with that. I agree that we must tackle the problem and deal with the piracy that has developed, but we should not allow the industry to continue to create the conditions where piracy flourishes. We should not allow it to continue to encourage people into piracy because it will not provide its product in the way and at the time that people want it.
Certainly, people ought to be able to hold product back: I am not at all saying that someone who comes up with something which is not public should be protected in some way. But at the moment the industry is refusing to license additional outlets for the internet availability of music, and although the wholesale price of a music track is somewhere around 20p-not the retail price, of course, the wholesale price-it is trying to run vastly inflated prices on new entrants trying to come into the market and compete with iTunes. That is pure monopoly behaviour and we are creating the monopoly for the industry in this Bill. We are giving it additional defences. We must require that the industry, as well as ourselves, address the problem, or else it will merely occur in another and more difficult form.
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