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Internet: Online Piracy

My Lords, I congratulate the noble Lord, Lord Lloyd-Webber, on initiating today’s debate and on making such a powerful introductory speech. This debate is much more about means than ends. In the context of online copyright piracy or infringement, I am sure that there is general agreement in the House today about our objectives. As the Gowers report, referred to by a number of noble Lords, which reported in 2006, and the interim Digital Britain report acknowledged, knowledge or creative capital in this country is increasingly important. The creative industries in the UK form a higher proportion of GDP than in the US, Canada, France or Australia. Of course, the creative industries have been growing significantly faster than other sectors in this country. One of the biggest threats to that growth and, indeed, further investment in creative industries is copyright infringement. All the evidence, referred to by the noble Lord, Lord Lloyd-Webber, is that with higher speeds and greater penetration of broadband, piracy is growing. The loss to rights owners could represent at least half a billion pounds a year in royalties, if the Ipsos figures are correct—they have been referred to in a number of subsequent reports—and the loss is probably split at present between audio-visual and music rights holders. Many people say that that figure is an underestimate. The Gowers report made a number of recommendations. Even though the monsters of Napster, Grokster and Kazam may have been slain, Napster as long ago as 2001, new threats constantly emerge. Just this week I was reading about the Scribd website, which allows copyright books to be downloaded. On these Benches, we are very strong defenders of intellectual property rights. We have strongly supported the proposition that good copyright protection is vital for the encouragement of creativity. My honourable friend Vince Cable promoted a Private Member’s Bill in 2001, which became the Copyright, etc. and Trade Marks (Offences and Enforcement) Act 2002. It increased the maximum penalty for copyright theft to 10 years’ imprisonment. The Gowers report pointed out in 2006, however, that there can be a tension between the data protection obligations of the ISPs and the desirability of protecting the copyright of rights holders. The problem is whether or not we expect ISPs to be policemen. The Gowers report recognised the problem of piracy and suggested matching penalties for digital infringement to those for physical infringement, raising the maximum penalties and enabling fast-track litigation. None of those suggestions has yet been implemented. Subsequently there has been consultation by the Department for Business, Enterprise and Regulatory Reform on tackling illicit file sharing and the recent government response to that consultation. The Creative Britain report was published in February last year. Last July, the memorandum of understanding between the major ISP and rights holders was designed to lead to agreed codes of practice in this area. More recently, the Digital Britain interim report and the consultation over proposals for a rights agency have seen the light of day. In all of this, although the Government have tried to steer an even course, there is no doubt that views have become very polarised, which makes going forward by consensus extremely difficult. ISPs believe that rights holders are asking them to be copyright policemen, a role which they do not want. One of the most crucial areas of contention is whether ISPs, once they have given notice to persistent infringers, should be obliged to throttle their broadband service or cut them off. This approach was originally suggested by the Government and is still favoured by President Sarkozy as part of his "three strikes and you’re out" policy, involving setting up a new body in France called Hadopi, and by a number of UK rights holders. The French Government are pressing for amendments to the EU telecoms package as a result. I am as sympathetic as anyone to rights holders, but I do not believe that this is the right approach. I take some comfort from some very prescient words of the noble Lord, Lord Puttnam, in a speech some three years ago. He said: ""In fact some of the anti-piracy policies pursued by different sectoral interests can look remarkably like a continuation of war by other means—hardly an effective strategy for winning the hearts and minds of consumers and citizens"." We should be mindful of that. The BPI and others say that few people believe that the answer lies in suing individual consumers. I agree with that, but a court order should be required to terminate services when inevitably evidence will be somewhat contested in those circumstances. We broadly agree, therefore, with the Government’s stated approach in the rights agency paper and the response to consultation that a voluntary approach through codes of practice would be preferable. In terms of the first compulsory step of notification by the ISP, all the evidence is that a significant number of infringers, some two-thirds, would change their behaviour once they had been written to by their ISP. As an alternative to penalising individuals and legal enforcement against non-persistent infringers, as Gowers and subsequent reports have said, it is clear that investment in education of the public is vital, together with creating alternative lawful distribution channels. The Culture Media and Sport Select Committee report in 2007 on the new media and the creative industries emphatically agreed with that proposition. At the weekend I saw a superb example at the Science Museum of what is possible. The Intellectual Property Office and Aardman Animations are collaborating on the mounting of an exhibition, A World of Cracking Ideas. This exhibition, to which I took my 11 year-old son, is inspiring, shows some of the great inventions of our time and stimulates children’s enthusiasm for innovation and creativity; but it also gets the message across about the need to protect intellectual property. It was interesting to see how the exhibition explained the world of music copyright, including VPL, PPL, PRS, MCPS and so on; it was a noble attempt. We need to combat the idea that copyright infringement is socially acceptable. Having said that, and that I agree with the overall approach of the Government, we have considerable doubts on these Benches about the rights agency proposed in the recent paper. It proposed that the agency should be industry-run, not run by the Government, and that the basis for funding should be a levy on broadband ISPs and users. But the basis for the operation seems to be somewhat flawed. It will not have statutory powers, even if it is responsible for dispute resolution and developments of the codes of practice. It is meant to have a role in standardisation of practice, but again on a non-statutory basis. Bringing together rights holders and others clearly has a role, but why not simply call it a forum? The notion of a rights agency seems somewhat mistaken. The question is rightly raised in the consultation paper: how will a rights agency achieve sufficient authority? It will be with difficulty. The appeal procedures envisaged in the paper are intended to be non-binding, which again is a problem. There is also the question of how representative of all the different interests the agency would be. Rightly, consumer groups believe that they should be included; but so, too, should others such as visual artists who have important interests to represent and are often ignored in these debates. Is it not essential if the DRA is to be credible that it is properly representative? Ministers rather grandly claim in the proposals that the DRA will, ""facilitate a change of approach across the whole value chain"." But the bottom line is whether it will reduce infringement and unlawful activity. The proposal is somewhat paradoxical, and I cannot see how the agency could operate without statutory powers. The educational role of the DRA is valuable, and I am sure that its representative nature will be useful, but at the end of the day, Ofcom will have and retain the power of regulation. A number of noble Lords mentioned the need for new models and innovative ways of exploiting copyright. I take on board the comments of the noble Lord, Lord Lloyd-Webber, in that context, but there need to be alternative distribution channels alongside better enforcement and education. We have heard a few examples. For instance, Nokia’s "Comes With Music" service was launched in 2008, followed closely by Sony Ericsson’s Play Now service and, as the noble Lord, Lord Luke, mentioned, Spotify, all of which are examples of how a new music service can happen when it is wholly legal and is provided in co-operation with the rights holders. The different perspectives on online copyright piracy are difficult to reconcile, but generally we believe that the Government are getting the balance right. It is internationally where we think that greater effort should be made. Many rights are infringed by dedicated sites that move into another jurisdiction when challenged, and there are a number of countries that are seen as safe havens for that kind of activity. Such co-operation is needed not just between ISPs, rights holders, consumers and others but between countries. There is little point in having very effective systems here and finding that rights can be infringed at will by downloading from foreign sites. The Government need to engage in international discussion, debate and co-operation on that subject. I look forward to hearing the Minister’s reply.