---

Digital Economy Bill [HL]

The two amendments deal with the funding of content production through a system of regulated payments for retransmission of free-to-air material. I thank the noble Lord, Lord Lucas, as I confess that I tended to confuse retransmission with repeats, in relation to iPlayer and other such things, so we need to be careful that we are talking about retransmission and not repeats. The first amendment will require Ofcom to produce a study of retransmission and delayed transmission fees. The second amendment will require Ofcom to set fees for the retransmission of free-to-air broadcast material at the time of the original by, for example, cable television, satellite services or streaming web services. It also tasks Ofcom to set similar fees for delayed retransmission of the same material by catch-up TV services, on-demand viewing services or potentially web TV services. Retransmission or delayed transmission of broadcast material by means of these services, except cable, should already be subject to copyright licensing and payment through commercial negotiation. These payments are what the noble Lord, Lord Lucas, refers to as retransmission and delayed transmission fees. Cable operators, as the noble Lord, Lord Howard, reminded us, are exempt from paying retransmission fees under Section 73 of the Copyright, Designs and Patents Act 1988. Some have called for this exemption to be repealed, arguing that it would generate incremental money for content creation. The noble Lord, Lord Howard, reminded us that the Government considered that in Digital Britain: Final Report. Following a robust analysis of the available evidence, we remained unconvinced that in practice repealing Section 73 would generate incremental revenues to fund content creation in the UK. No such exemption exists for satellite, and what is paid by platform operators and ultimately by broadcasters in return to rights owners is largely a matter for commercial negotiation. The current arrangements on satellite transfer no additional value to PSBs because the retransmission fees are offset by the carriage fee. There is no evidence that a similar situation to the one observed on satellite would not arise on cable if the Section 73 exemption were repealed, and therefore such a move would be unlikely to generate additional revenue for the UK content industry. We also believe that, given that there is only one national cable operator in the UK—Virgin Media—the majority of the uses of material covered by Amendment 288 are already subject to commercial negotiations. It does not appear that there is a pressing reason for the heavy hand of government to start setting prices for such licences—or perhaps I should say the potential heavy hand of government. There is another angle from which to look at this issue. If the concern is not to ensure that copyright owners are paid for their work, as I have just discussed, but rather a concern that the material may not be currently available for licence at a reasonable fee, other considerations must be borne in mind. Enshrined in international treaties is a principle of copyright law that we must consider in debating these amendments. Amendment 288 appears to introduce compulsory licensing. Compulsory licensing where a copyright owner is told that they must license their property to a third party should be avoided unless there are very compelling reasons to consider it. In any event, it may be implemented only if it does not unfairly prejudice the rights of the copyright owner. I am not aware of evidence that there is a failure in the market such that this content is not available on fair terms to those who require it. In the absence of such evidence it would not be right to take away the control that copyright owners rightly enjoy over their property. The Government are more than aware of the funding challenges faced by high-quality, original UK content. Indeed, we propose alternative measures in this Bill to modernise our public service media content ecology and to deal with the challenges of content creation. Outside the Bill, with the digital test-bed initiative, we are also contributing to the development and the testing of new funding models for content creation, particularly micropayments. We will, of course, keep the question of retransmission fees under review, but we consider that the case has not been made for intervention of the kind proposed by the noble Lord, Lord Lucas, for the reasons I have just mentioned. Furthermore, I do not agree that requiring Ofcom to conduct a one-off study, as proposed by Amendment 32, is a matter that should be enshrined in statute. In the light of that explanation, I hope that the noble Lord will feel able to withdraw the amendment.