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Digital Economy Bill [HL]

My Lords, I thank those noble Lords who have taken part in this debate but I am afraid we do not agree with any of the points that have been made. We do not think that Amendment 197A would be regarded by anyone as one which reinforces the seriousness of what this legislation is trying to achieve including, I suspect, most internet service suppliers if they were being frank. We must take into account the sheer scale of the companies involved. They will range from medium-sized companies to some multinational corporate giants. A point to be borne in mind is that this is the maximum penalty. We would not expect it to be applied too often—perhaps not at all—to any smaller bodies which find themselves in contravention. The text makes it clear that this has to be both appropriate and proportionate to the contravention. However, it must be right to retain the deterrent effect of a significant sum. Amendment 198 would effectively set the maximum penalty in stone for all time. We do not believe that it would be appropriate to do that either. The maximum penalty is a significant one of £250,000, but against that must be set the huge scale of the bodies being regulated and the need to provide a route through which such maximum penalties will remain an appropriate deterrent into the future. What is certainly a hefty figure now may not seem so in 10 or 20 years and we should take care when a specific sum is mentioned to allow that sum to be changed as circumstances change. The noble Lord, Lord Clement-Jones, claimed that the £250,000 penalty was out of line with penalties for similar offences elsewhere. We would not agree with that. It is in line with other penalties within the Communications Act 2003 and is the same as the maximum penalty for breaching a condition relating to premium rate services. It is true that there are other penalty levels in the Communications Act, including the £10,000 suggested by the amendment. There is also in the Act the much steeper maximum penalty for breach of a Section 45 condition—these are conditions of entitlement to provide networks or services—of 10 per cent of annual turnover. We agree that such a penalty would not be appropriate here. However, I am satisfied that we have got it just about right. It is a maximum penalty and Ofcom is required to take into account appropriateness and proportionality. The noble Lord raised the question of Ofcom’s jurisdiction over copyright owners. He is right that Ofcom is a communications regulator and does not have jurisdiction over copyright owners. In this instance, the jurisdiction that it has is over ISPs. It is in that respect that the Act will apply. On the amendment of the noble Lord, Lord Howard of Rising, we take the view that any future changes to penalty levels should be made by statutory instrument subject to affirmative procedure and therefore will be approved by Parliament rather than set in stone. I hope that, after what I have said, the noble Lord will feel able to withdraw his amendment.