The Digital Economy Bill has now been published as the Digital Economy Act 2010 following Royal Assent.  The Act includes provisions relating to the UK’s communications infrastructure, public service broadcasting, copyright licensing and online infringement of copyright, and security and safety online and in video games.

Some of the measures in the Act will come into effect immediately with others coming into effect in two months’ time. Many of the Act’s provisions require further public consultation and in some cases approval by Parliament, before they can be implemented.

Further information:

• Factsheet: Contents and Commencement of the Act : a summary of the Act’s contents.
• The Digital Economy Act 2010 : the Act itself.
• Ofcom Terms of Reference : Ofcom’s initial obligations and approach under the Act, and opportunities for stakeholder engagement.
• Mott-MacDonald – P2P Final report : a recent report from consultancy Mott MacDonald, advising on cost allocations with regard to the Act’s provisions.

(Download Factsheet: Digital Economy Act – contents and commencement as a PDF, 58.4 KB)

The Digital Economy Bill is now the Digital Economy Act 2010, following Royal Assent. This note provides an overview of its contents and the commencement of its provisions.

Summary

The Act includes provisions relating to the UK’s communications infrastructure, public service broadcasting, copyright licensing and online infringement of copyright, and security and safety online and in video games.

Some of the measures in the Act will come into effect immediately with others coming into effect in two months’ time.

Many of the Act’s provisions require further public consultation and in some cases approval by Parliament, before they can be implemented.

What is in the Digital Economy Act?

Following Government amendments in the House of Commons, the Act’s provisions cover:

• Ofcom Reports – to require the sectoral regulator, Ofcom, to carry out an assessment of the UK’s communications infrastructure every three years;
• Online infringement of copyright – to tackle online infringement of copyright, by placing obligations on Internet Service Providers to work with rights holders and, if necessary, to take technical measures against infringing subscribers. It also provides a power for the Secretary of State to introduce Regulations for rights holders to seek a court injunction to prevent access to specified online locations for the prevention of online copyright infringement;
• Internet domain registries – to provide reserve powers in respect of efficient and effective management and distribution of internet domain names;
• Channel 4 Television Corporation – to adjust Channel 4 Corporation’s functions from a focus on traditional broadcast activities to include provision of public service media content on other platforms, including the internet;
• Independent television services – to enable future alterations of the Channel 3 and Channel 5 licenses, including adjusting the requirements on Channel 3 licence holders to produce or broadcast Gaelic programming, and allowing Ofcom to provide advice to the Secretary of State on future Teletext licences;
• Digital radio – to provide arrangements for digital switchover by making changes to the existing radio licensing regulatory framework, varying the conditions for multiplex licence holders and facilitating the relaxation of the localness requirements of local licences;
• Access to electromagnetic spectrum – to allow for the charging of periodic payments on auctioned spectrum licences, and confer more proportionate enforcement powers on Ofcom;
• Video games – to make changes to how video games should be classified in the UK. This will put age ratings of computer games on a statutory footing for ratings of 12 years and above;
• Public lending right – to extend eligibility for PLR to non-print books which are not currently eligible under the existing PLR scheme;
• Copyright penalties – changes to levels of penalties for copyright infringement.

When does the Act take effect?

The online infringement of copyright provisions of the Act will require secondary legislation before they can be implemented.

The majority of the Act’s provisions come into effect two months after the Act is published.

Some of the Act’s provisions come into immediate effect, including:

• Sections 5-7 regarding the initial obligations code;
• Section 15 regarding the sharing of costs in relation to provisions on online infringement of copyright; and
• Sections 30 to 32 regarding digital radio switchover and renewal of radio licences.

Other provisions come into affect on a date to be appointed by the Secretary of State in secondary legislation.

At Report Stage in the House of Lords, a new clause 17 (now 18) was inserted into the Bill by Opposition amendment. At Third Reading Government committed to bring forward a replacement clause that ultimately achieves the same effect, while addressing the concerns expressed regarding the current clause.

The Government is now publishing its draft replacement clause 18 . Lord Mandelson has written to Jeremy Hunt and Don Foster setting out Government’s concerns with the current clause and explaining the draft amendment.

The Government proposes to introduce this amendment immediately after Second Reading in the House of Commons. The Government believes that the amendment delivers the effect that the House of Lords wanted to achieve when it voted clause 18 into the Bill, but in a way that takes account of the legal and other concerns to which the clause gives rise.

Yesterday the Digital Economy Bill completed Third Reading in the House of Lords; it has therefore now completed all Lords stages. The official record is here. We now move to the House of Commons. The next significant stage there is Second Reading – date to be confirmed.

As of 6:14pm on Monday night, the Digital Economy Bill has completed Report Stage. It is now bound for its final stage in the House of Lords, Third Reading, on Monday.

Debate in the House covered Clauses 31 to 42, and the Government agreed to consider in principle two amendments tabled by Viscount Bridgeman, Baroness Buscombe (Conservative) and Lord Clement-Jones (Liberal Democrat) to Clause 42, concerning the representation of creators by extended collective licensing bodies. As the Minister, Lord Young, said, “The Government have always intended that extended licensing schemes should be run by representative licensing bodies. We therefore agree to consider Amendments 155A and 155B and will bring our proposals to Third Reading.”

According to Cabinet Office Guidance, “The principal purposes of amendments on Third Reading are to clarify any remaining uncertainties, to improve the drafting and to enable the Government to fulfil undertakings given at earlier stages of the Bill. Amendments are restricted to technical points to tidy up the Bill. An issue which has been fully debated and voted on or negatived at a previous stage of a Bill may not be reopened by an amendment on Third Reading. Notice is required if any Member of the House wishes to move an amendment to leave out a clause or schedule on Third Reading, just as it is on Report.”

Finally, a new copy of the Bill as amended in Report has been made available, for those of you wishing to follow the latest changes to the Bill.

Last night the Bill had its second day in Report in the House of Lords. The Government’s amendments on Online Infringement of Copyright were well-received, and we were pleased to accept a number of improving amendments from others, including amendments to Clause 28 from Baroness Bonham-Carter and Lord Puttnam. In accepting these the Government makes clear that quality and impartiality are of primary importance in appointing providers of regional or local news.

The Government opposed an amendment put forward by Lord Clement Jones (Liberal Democrat) and Lord Howard (Conservative). However the House of Lords supported the amendment, the result of which was to replace clause 17 with provisions regarding “Preventing access to specified online locations for the prevention of copyright infringement”. The amendment passed by the House of Lords raises significant issues which will need to be addressed as the Bill progresses through Parliament.

Debate came to an effective end at 7.40pm, having reached Clause 30. We had hoped to make further progress, but business scheduled in the dinner-break ran on and sitting was adjourned before we could return to the debate.

We look forward to resuming the remaining clauses at our next day in Report on the 8th of March.

(Download this factsheet as a PDF, 344 KB)

Introduction
There are several areas where copyright law in the UK is currently developing. This includes provisions in the Digital Economy Bill to create regulated schemes for licensed use of orphan works and extended licensing by collecting societies. This factsheet explains some key issues and corrects some of the more common misconceptions about the Government’s plans and policies.

We are aware of some concerns about how these changes might affect the way professional photographers do business, so parts of this factsheet are particularly aimed at them.

What are Orphan works?

Orphan works are works protected by copyright, but where the rights holder cannot be identified or found, even after a genuine and diligent search has been made. Although all types of work can become orphaned, the problems for the most part arise from unpublished letters and diaries, old books, or archival sound and video recordings held in museums and libraries. These may of course include photographic illustrations, or separate photographic works.

Why is the Government acting?

Access to orphan works is important from both a cultural and economic perspective. The BBC and British Library both experience difficulties – the British Library estimate that up to 40% of its archive collection is orphaned. Some institutions have very reasonable plans to use orphan works – digitising and making available historic material – but without the permission of the copyright holder such use may be an infringement of copyright and possibly a civil or criminal offence.

What is the Government doing?

The provisions in the Digital Economy Bill introduced on 18th November 2009 and currently before parliament will enable the Government to create a solution to the problem of Orphan Works. The changes will provide the Government with powers to authorise and regulate suitable bodies to operate orphan works licensing schemes. Before any of this can happen the Government is committed to a wide ranging public consultation, to make sure the rules are fair and workable.

When will this happen?

Public consultation is currently planned for some time in the second half of 2010. The consultation will be wide ranging to ensure as many stakeholders as possible have the opportunity to make their views known and are able to help shape the details of how orphan works will be licensed. Following that consultation work will be done to develop the secondary legislation to create the first authorised schemes.

How exactly will the schemes work?

Until the consultation has taken place it would be premature to speculate on exactly who might have access to licences, how the licence fees would be held and other administrative details. The system will be a flexible one, as it is clear that what is appropriate for one set of circumstances won’t be appropriate in another.

What does this actually mean for photographers?

Although the administrative details have yet to be worked out, the important thing to note is that any schemes created will operate on a regulated and licensed basis. That means that before a user can apply for a licence to use the work, they must first carry out a diligent search for the original owner of the right. The required steps are outlined in the Bill itself, but as the appropriate searching techniques are likely to be different for different sectors, the details for specific types of work will be fixed in the secondary legislation, after consultation.

Will this allow people to use works for unfair prices?

Certainly not! The Government is aware of many photographers’ concerns that orphan works will create a means for content users to appropriate large amounts of their hard work at an unfairly low cost or for free. Any use of an orphan work will require payment of a fair licence fee, and this fee will be held safely and kept available to be claimed by the rightful owner should they come forwards.

The Government’s intention is that there should be no financial advantage from mis-identifying a work as an orphan work and that deliberate or negligent mis-identification should carry an appropriate penalty. Subject to consultation, any regulations would be designed on that basis. The Government takes this to imply that licensing of orphan works would be at the market rate, where one exists; the intention would be that, as far as possible, rights holders would get a similar return regardless of who licenses their work (for instance, whether a collecting society or other body). Not only would this minimise any financial incentive to misidentify works, but it would also guard against unfair distortion of existing markets by protecting the interests of returning rights holders.

What happens if people use photographs that shouldn’t be considered orphan?

Currently, if photographic works are used without permission, the rightful owner usually has to take legal action to gain redress for the unauthorised use. However, if such a use is made under an authorised orphan works scheme, then there will be a clear point of contact and a simple process by which the rights holder can check for use of their works and claim the money that is being held for them.

Furthermore, if a content user fails to act properly and comply with the terms of the orphan works authorisation (for example by not carrying out a properly diligent search), then they would be subject to regulation and revocation of their permissions, as well as being liable for substantial financial penalties. It is anticipated that this will actually improve the situation for creators such as photographers whose work is sometimes orphaned.

Shouldn’t this be limited to non-commercial use?

The key point to ensure fairness to rights holders is not an arbitrary distinction between commercial and non-commercial use: it is about ensuring that there is adequate regulation of organisations running orphan works or extended licensing schemes. The Government is aware that different sectors have different needs, and these provisions will give the Government the flexibility to tailor the details of licensing schemes so that they are appropriate for different areas. If it proves impossible to devise a scheme for a particular area that does not unfairly disadvantage rights holders interests, then the Government will have the flexibility to not authorise any schemes to be set up in that areas.

What did the delegated powers committee say?

The Delegated Powers Committee suggested that the clause should include an explicit definition of orphan work, and that regulations (secondary legislation) made under the provisions should be subject to affirmative procedure (which means they will be debated and voted on in both houses of Parliament). The clause has now been amended to address both of these points, as well as a number of other minor concerns raised by the committee.

Metadata is easily stripped from photographs, doesn’t this make everything on the internet ‘orphan’?

No. Just because a photograph does not have a by-line or electronic metadata attached does not mean it can be considered orphan. A diligent search will in most cases still allow the original rights holder to be identified through the searching of databases, advertisement of the intention to use, use of electronic messaging (in the case of sites such as Flickr for example) and other steps. The effectiveness of electronic searching will also increase as image recognition technology improves. The effectiveness of available search tools will be taken into account when considering whether or not it is appropriate to authorise a scheme covering a particular type of work.

It should also be noted that there are already provisions in law to prevent the removal of metadata if the person doing so is aware that it may facilitate infringement of copyright (see section 296ZG of the Copyright Designs and Patents Act 1988). This means that stripping photographers’ work of metadata to claim it as “orphan” is now and will continue be unlawful.

Isn’t it unfair to do this without changing moral rights?

The provisions in this Bill do not change the existing system of moral rights. We are aware that some creators would like a change in the way moral rights work, particularly with regard to the right to identified as author of a work. This is however a polarised debate: publishers and users of copyright works are concerned that any change would prevent them from carrying out legitimate editing activities and add unacceptable overheads to established business practices.

The government has committed to continue to keep the case for a change under review.

What can you do if you still have concerns?

If the Digital Economy Bill becomes law, then the government has committed to a broad consultation before legal rules for orphan works schemes are developed. At this time (planned to be the second half of 2010) we would like to hear from creators and copyright owners of all types, as to what they believe the issues are for them. The consultation process will be widely publicised, and you will be able to contribute your views at that time.

The Bill had its first day in Report Stage in the Lords last night – we’re on the front page of the Parliament website here (the page has links to Hansard records, and a host of other useful Parliamentary information about the Bill).  We finished at 10:52pm, having reached Online Infringement of Copyright – we’ll pick up where we left off on Wednesday afternoon.

As you may have noticed, in the lead-up to Report we’ve been busy. In the previous ten days we tabled a wide range of Government amendments - around 120 in total – and drafted a slew of new factsheets and letters to parliamentarians, which we’ve now uploaded to this website. Please have a look at the letters and factsheets sections for the latest, including explanations of the recent amendments proposed by the Government.

You may also be interested in the Parliament Web Centre’s recent experiment with presentating a Bill online – they are investigating a range of innovative ways in which Bills might be presented, including hyperlinking to existing Acts to be amended by a Bill, and interleaving the Explanatory Notes for the Bill with the legal text itself.  Have look and see what you think – I know the Parliament web team would be grateful for feedback. (Please note that this version currently uses the Bill as introduced in the Lords, and doesn’t feature the amendments that have been made since.)

(Download this as a PDF)

Dear Colleague,

During the earlier debates in Committee it became clear that the issue of how the proposals in the Bill might impact on libraries, wi-fi providers and universities was one which caused some concern. I undertook to provide the House with more information, both on the current position in these establishments and on how they might be affected by these proposals.

I attach a factsheet (PDF) on this which I will ensure is made publically available, given the level of interest in this issue. I hope the note is self explanatory, but I would like to highlight a few of the main points.

There are measures that all establishments can take to tackle infringement. ISPs can and do provide a great deal of advice, information and help. Our intention is that the code should formally require ISPs to provide generic advice and information on how to tackle infringement as well as how to protect a wireless connection/network and that such advice is appropriate for the establishment in question. We will add a requirement in the Bill under clause 8 that this is a provision that the code must include.

For universities (and other academic and educational establishments as well as commercial businesses) it is very clear that there is no one model of internet access they offer. Similarly the process and procedures in place for dealing with infringements differ. Many of the larger establishments provide services to other parts of the public sector – hospitals, research centres etc –or to private sector commercial operations. Some universities do have in place very strict procedures to address infringement with some very stiff penalties. Others do not.

Each establishment must look at its own position and how the Bill will impact upon it, then consider this guidance and what action to take.

Similarly, there are a number of different models in libraries but these share some general characteristics. The bulk of internet access in libraries is currently provided through fixed library terminals. This makes tackling infringement much simpler to the extent that it is unlikely that significant use is made of libraries fixed networks for infringement.

Where libraries offer wireless access (which is available more and more in public libraries) it is harder to tackle infringement, especially at the higher levels of bandwidth but there are still steps that they can take to limit infringement.

The factsheet sets out the position for libraries, universities and wi-fi providers in more detail and gives a guide to how we anticipate the Bill affecting each type of establishment.

As I said during the debate, we cannot simply give a blanket exemption to such establishments – this would in effect give carte blanche to infringement and would attract infringers to exploit these spaces. Instead, we see a pragmatic approach as the best way forward using three elements:

1. existing action,
2. information and advice, and;
3. the independent appeals body.

Many establishments already take effective action and there is no reason why such existing arrangements cannot be continued. However, in the event that an establishment finds themselves on the infringers list, they will then have two options:

• they could wait for any legal action to be brought against them and pursue their case in court, or;
• they could take pre-emptive action, take their case to the independent body and seek to be removed from the infringers list.

The body would consider each case on its merits and provided the university or library had followed the advice from their ISP and taken reasonable steps to address infringement, only in exceptional circumstances would we anticipate the appeal failing.

There is the potential for the code to offer some flexibility and reflect the particular positions of libraries and the like. Ofcom will consult on the code in due course which will then need Government and Parliamentary approval. However, it will be for universities, libraries etc to make their case during code discussions and I would therefore urge them to look closely at how they might be affected and to engage with copyright owners and ISPs as soon as possible.

Finally I should stress this note was prepared in response to issues raised during the Committee Stage debate. I realise that it will however receive a wider readership including those in academia, education as well as business and who may want some general advice and information about what measures they might take. I therefore include a short note which I hope will provide a top-level guide.

LORD YOUNG

Lord Young to Lord de Mauley on the Conservatives’ concerns on section 2(2) of the Video Recordings Act – 22 February 2010 (PDF)

Lord Young to Lord Howard on C4C functions – 22 February 2010 (PDF)

Lord Young to Baroness Bonham-Carter on the non-linear content of C4C – 22 February 2010 (PDF)

Lord Young to Lord Howard on the appointment of the interim manager of domain names registry – 23 February 2010 (PDF)

Lord Young to Lord Lucas on internet domain registries; clause 18 – 23 February 2010 (PDF)

Online infringement of copyright: libraries, universities and wi-fi providers (PDF)

Lord Young to all Peers on Libraries, Universities and wi-fi providers (PDF)

Lord Young to all Peers on illustrative notifications (PDF)

The factsheets area on the Digital Economy Bill has been updated with new content, including Internet Domain Registries (PDF) and further details around Copyright (PDF). We’ve also created a ‘Letters’ area that will be updated with letters to parliamentarians as the Bill is debated in Parliament.

Lord Clement-Jones on radio mikes – 24 February 2010 (PDF)

Letter to Lord Gordon of Strathblane on Ofcom reporting duties to cover media mergers; dated 25 February 2010 (PDF)

Lord Young to Lord Clement-Jones on clause 42, in regards to photographers – 23 February 2010 (PDF)

Lord Young to Lord Howard and Lord de Mauley on copyright owner opt out – 22 February 2010 (PDF)

Lord Young to Baroness Howe on the Government’s position on access to pornographic material on UK-based video on demand services – 22 February 2010 (PDF)

Lord Young to Lord Lucas on harmonising spectrum for emergency services across Europe – 17 February 2010 (PDF)

Baroness Miller on spectrum work carried out by National Police Improvement Agency – 17 February 2010 (PDF)

Lord Young to Lord Howard on the definition of public service media content provided by clause 1 (General duties of Ofcom) – 17 February 2010 (PDF)

(Download this factsheet as a PDF)

Overview of Government Amendments for Report

In addition to the issues of appeals and defences, and the balance between the Codes and the Bill, a number of other issues were raised during Committee about the provisions in relation to online infringement of copyright. Since some of these raise genuine issues that can be resolved by relatively small amendments to the Bill we are proposing the following 6 further changes:

Information on protecting networks in the notification letters

The Bill requires notification letters to contain information on protecting networks by means of wireless telegraphy. This effectively limits the requirement to information about protecting wireless networks, but in practice it is possible for fixed networks to be hijacked or hacked by cookies, botnets or other malware. It would be sensible to ensure that the notification letters include information on protecting networks against any method by which others might abuse someone’s internet account in order to infringe copyright together with information appropriate to the subscriber – so that a hotel would receive different information from a domestic subscriber, for example.

Independent body to administer and enforce the code

The Bill currently allows the code to set up an independent body to administer and enforce the code. A number of noble Lords were not convinced that this was necessary, and greatly preferred that Ofcom be the entity with that responsibility. Whilst we thought that this allowed the option of a pragmatic approach to be taken along the lines of PhonePayPlus, we have listened to the concerns expressed and are proposing to remove this provision.

“Sufficiently independent”

Noble Lords will recall the debate around the appeals body (and the body the Bill allowed to be set up to enforce and administer the code, an option we are suggesting dropping as explained above) having to be ”sufficiently independent” of copyright owners, ISPs and Ofcom. We explained that the reason for this wording was that any such body will have to be funded by the copyright owners and the ISPs and such funding might give rise to a question about whether the body were absolutely independent. However, this explanation did not convince those who expressed concern. In order to resolve this important point to the satisfaction of the whole House we are therefore putting forward an amendment that removes the phrase ‘sufficiently independent and inserts “for practical purposes independent (so far as determining subscriber appeals is concerned)”, which reflects existing wording in the Communications Act, 2003, and sets out clearly our policy intention here and removes any possible ambiguity.

Assistance from copyright holders on technical measures

A number of noble Lords wondered why the requirement that ISPs provide Ofcom with any help and assistance that they need in relation to technical measures does not equally apply to copyright owners. Whilst we think that in practice the relevant expertise will be held by ISPs it is possible that it would be helpful to Ofcom for the requirement to apply to copyright owners as well and we have therefore proposed an amendment that will have that effect.

Specifying the name of the copyright owner in the notification to subscribers

There were a number of calls for the identity of the copyright owner to be made clear in the notifications sent to subscribers. The Government took the view that it was unnecessary to be so specific, since in practice it would happen anyway, although some names would not be especially revealing to the subscriber. However, the Government does agree that if a notification is sent alleging copyright infringement it is not unreasonable to require that the subscriber be informed who is making the allegation, and so we have introduced an amendment to that effect.

Taking clause 9 reports into account when considering the case for technical obligations

During Committee stage debate some Noble Lords thought that no technical obligations should be imposed without due account being taken of the reports being produced under the auspices of clause 9. We made clear our intention – delivered by these amendments – that technical obligations should not be introduced until a minimum period of 12 months from the coming into effect of the initial obligations code. The Government also agrees that the Secretary of State should take into account reports produced under clause 9.http://www.bis.gov.uk/digitaleconomybill/ First published February 2010. Crown Copyright. URN 10/743
(Download this factsheet as a PDF)

Overview of Government Amendments for Report

In addition to the issues of appeals and defences, and the balance between the Codes and the Bill, a number of other issues were raised during Committee about the provisions in relation to online infringement of copyright. Since some of these raise genuine issues that can be resolved by relatively small amendments to the Bill we are proposing the following 6 further changes:

Information on protecting networks in the notification letters

The Bill requires notification letters to contain information on protecting networks by means of wireless telegraphy. This effectively limits the requirement to information about protecting wireless networks, but in practice it is possible for fixed networks to be hijacked or hacked by cookies, botnets or other malware. It would be sensible to ensure that the notification letters include information on protecting networks against any method by which others might abuse someone’s internet account in order to infringe copyright together with information appropriate to the subscriber – so that a hotel would receive different information from a domestic subscriber, for example.

Independent body to administer and enforce the code

The Bill currently allows the code to set up an independent body to administer and enforce the code. A number of noble Lords were not convinced that this was necessary, and greatly preferred that Ofcom be the entity with that responsibility. Whilst we thought that this allowed the option of a pragmatic approach to be taken along the lines of PhonePayPlus, we have listened to the concerns expressed and are proposing to remove this provision.

“Sufficiently independent”

Noble Lords will recall the debate around the appeals body (and the body the Bill allowed to be set up to enforce and administer the code, an option we are suggesting dropping as explained above) having to be ”sufficiently independent” of copyright owners, ISPs and Ofcom. We explained that the reason for this wording was that any such body will have to be funded by the copyright owners and the ISPs and such funding might give rise to a question about whether the body were absolutely independent. However, this explanation did not convince those who expressed concern. In order to resolve this important point to the satisfaction of the whole House we are therefore putting forward an amendment that removes the phrase ‘sufficiently independent and inserts “for practical purposes independent (so far as determining subscriber appeals is concerned)”, which reflects existing wording in the Communications Act, 2003, and sets out clearly our policy intention here and removes any possible ambiguity.

Assistance from copyright holders on technical measures

A number of noble Lords wondered why the requirement that ISPs provide Ofcom with any help and assistance that they need in relation to technical measures does not equally apply to copyright owners. Whilst we think that in practice the relevant expertise will be held by ISPs it is possible that it would be helpful to Ofcom for the requirement to apply to copyright owners as well and we have therefore proposed an amendment that will have that effect.

Specifying the name of the copyright owner in the notification to subscribers

There were a number of calls for the identity of the copyright owner to be made clear in the notifications sent to subscribers. The Government took the view that it was unnecessary to be so specific, since in practice it would happen anyway, although some names would not be especially revealing to the subscriber. However, the Government does agree that if a notification is sent alleging copyright infringement it is not unreasonable to require that the subscriber be informed who is making the allegation, and so we have introduced an amendment to that effect.

Taking clause 9 reports into account when considering the case for technical obligations

During Committee stage debate some Noble Lords thought that no technical obligations should be imposed without due account being taken of the reports being produced under the auspices of clause 9. We made clear our intention – delivered by these amendments – that technical obligations should not be introduced until a minimum period of 12 months from the coming into effect of the initial obligations code. The Government also agrees that the Secretary of State should take into account reports produced under clause 9.

(Download this factsheet as a PDF)

Overview of Government Amendments for Report:

Initial Obligations

The amendments the Government has put forward aim to provide clarity in relation to the subscribers’ right to appeal under the initial and technical obligations – the grounds on which they can appeal, what is expected of copyright owners and ISPs by way of proving the existence of an infringement and what the appeals body can do when an appeal is successful. In particular, we are proposing amendments to provide the following protections:

• Clarification of possible grounds for appeal.
• An explicit requirement that at appeal the onus will be on the copyright owner to prove an infringement occurred and on the copyright owner and ISP to prove that it was properly associated with the subscriber’s account.

Technical Obligations

Under the technical obligations arrangements a subscriber might have a technical measure applied directly to his or her Internet account if the relevant criteria are met. Again, we are looking to provide greater clarity in the Bill around not only what is expected of the copyright owners and ISPs but also what an appeals body should take into account in determining whether to allow an appeal on the part of the subscriber. Specifically, the amendments we are proposing will provide for:

• A requirement that the copyright owners and ISPs should show the existence and correct attribution to the subscriber’s account of all the copyright infringements associated with the subscriber reaching the threshold should the subscriber appeal against being notified or a technical measure being imposed.
• A provision that if the appeals body is satisfied that the subscriber did not carry out the infringement, it should uphold the appeal if satisfied that the subscriber has taken reasonable steps to prevent others using his account to infringe copyright. However, if the appeals body is not satisfied of these matters then it may reject the appeal unless the subscriber can show that he did not carry out the infringement.
• Provision that the appeals body may use its discretion not to uphold the imposition of a technical measure, or may impose an alternative measure, in the light of the particular circumstances of a particular case or user.
• Following the report from the Joint Committee on Human Rights, we also consider the Bill should make it clear that a subscriber who successfully appeals may recover the costs of the appeal.

Lord Young to Lord Bishop of Manchester on proposed changes to localness regulations on radio – 16 February 2010 (PDF)

Lord Young to Lord Gordon on radio media ownership rules – 16 February 2010 (PDF)

Letter to Lord Lucas on copyright other issues – 15 February 2010 (PDF)

Referenced annexes A and B (PDF)

(Download Online infringement of copyright: balance between code and Bill as a PDF)

Overview of Government Amendments for Report

In general, during debates at Committee stage the Government has favoured leaving a high level of flexibility to be addressed by the code, which will hopefully benefit from direct input from industry and others, or at the least will have been consulted on by Ofcom, and the views of all stakeholders taken into account. Against that, there were a number of Noble Lords who asked for more certainty on the face of the Bill, in particular to safeguard the position of subscribers. Of course, there was general recognition of the merits of both approaches – some things need to be set out clearly as legislative requirements, and others need to be capable of interpretation following consultation.

However, having heard the views expressed, we have looked again at areas where there is room for the Bill to require the code to be more specific without necessarily losing important flexibility. As a result, we are now proposing a number of amendments:

Clause 4

• 4(5) –as one of the requirements for the content of notifications, we think it would be reasonable to include information about how a subscriber may respond, including how to appeal, and on what grounds. I hope this makes clear that, even at this early stage in the online infringement of copyright provisions of the Bill, we are bearing the rights of subscribers in mind.
• We have added a provision that requires information and advice to be provided by ISPs that reflects the nature of the subscriber’s network, so far as ISPs are aware of the nature of the subscriber concerned. This will help ensure that establishments such as libraries and universities get the advice that is appropriate to them.
• 4(6)(d) – the amendment here would ensure that only any subsequent notifications sent after a first-level notification would include reference to the potential use of copyright infringement reports being used in the event of technical obligations being introduced. This would reinforce the point made by both the Government and elsewhere in the House that threats of suspension would not be part of the first-level notification, which I believe is generally agreed should be focused on advice rather than admonition. We have attached some illustrative examples of such notifications to give noble Lords a better idea of what we would expect them to look like.

Clause 6

• (5)(b) – this text, which requires ISPs to take appropriate action on copyright infringement reports received in relation to a time before they became subject to the obligations, caused significant concern amongst ISPs, and in particular mobile network operators. That concern was shared by a number of noble Lords. One approach we considered was to insert a maximum time limit, but this would on its own only partly reassure ISPs, who are worried that they will need to build systems on a just-in-case basis. We also considered whether it might also be appropriate to include specific reference to the grace period that the outline code already acknowledges as necessary. However, in practice this is unlikely to be reasonable if it resulted in action being taken on the basis of infringement reports relating to incidents some months earlier.
• On balance, the Government is of the view that paragraph (5)(b) should be redrafted so that obligations can start immediately the threshold is reached or can start later after a reasonable period for the ISP to prepare, as set down in the code. We do acknowledge that copyright owners may feel that they are generating infringement reports to no purpose in these cases. However, this is outweighed in this case by the need to provide certainty to ISPs.

Clause 8

• 8(1)(d) – following the debate in the Lords about setting a time limit on how long information might be retained we are proposing that copyright infringement reports should not be used after 12 months, unless the information relates to an appeal already being considered.
• 8(2)(d) – in order to ensure that infringements do not relate to incidents so far in the past that it would be unreasonable for subscribers to have a clear recollection of the circumstances, we are also proposing setting a time limit for copyright infringement reports, such that the alleged infringement took place within one month of the copyright infringement report being sent to the ISP.
• 8(3) – finally in this area, we are suggesting that a further time limit be inserted as a new (3)(d) which relates to the maximum time between the receipt of a copyright infringement report by an ISP and the issuing of the notification if required by the code, and again propose that one month should be used.

The Government recognises that copyright owners and ISPs may have some concerns over the timings proposed above, but I would say in response that, taken at their maximum, it remains the case that a subscriber could be receiving a notification relating to an alleged infringement that took place 2 months previously. It has always been our view that it is important that subscribers are treated fairly under this process, and we anticipate that in practice the system will deal with the creation of copyright infringement reports and notifications well within such time frames, but having heard the previous debate we agree it is right to set an outer limit.

(Download as a PDF)

Introduction

This factsheet provides additional information on the Government’s proposals for supporting sustainable multi-platform news in the nations, regionally and locally. General background on Independently Funded News Consortia (IFNCs) is available in the “Provision of News: Factsheet” available from the Digital Economy Bill website.

Why is the Government procuring IFNC pilots?

The pilots are being run by the Government because immediate action is necessary to secure plurality of local and regional news in key areas of the country. This is a highly innovative process and one which has never taken place before. As this is a pilot process, it is right for the Government to oversee any public expenditure and understand the lessons to be learned for a wider national roll out.

Where will the pilots take place and why were these areas chosen?

Scotland and Wales are nations with their own devolved government institutions. Having plurality in nations’ news that can hold those institutions to account and provide a service that identifies with the distinctiveness of these nations is fundamentally important. There is an urgency to secure plural news in these nations as the Channel 3 broadcasters have indicated that this kind of news may diminish unless action is taken. The Borders/Tyne Tees area provides an opportunity for a different test-case as well as meeting the needs of audiences. It has one of the highest levels of television consumption in the country; similarly, the importance of local content and news is also one of the highest2. The Government is keen to understand what scope there is for enhanced localness in this area and where there may be opportunities to test how IFNCs on both sides of the border could meet the needs of audiences in those areas.

How are the IFNC pilots progressing?

The Government launched the procurement process for the three IFNC pilots in late 2009. The procurement process follows Office of Government Commerce (OGC) rules and European procurement law.

The Government has made rapid progress to date with the procurement: (1) it has completed the pre-qualification questionnaire stage; (2) it has completed the competitive dialogue3 stage with the bidders to help ensure the bids meet the required standards and to reflect the innovativeness of this procurement; and, (3) it has recently issued invitations to submit final tenders. The eight bidders across the three regions have until 8 March 2010 to submit their final tenders.

These tenders will then be assessed by an evaluation team which includes financial, procurement, news and media experts. The evaluations and the bids will then be submitted to an independent selection panel chaired by Richard Hooper4. This panel will then review those evaluations to reach a final view. The panel will then present its recommendations to the Secretary of State who will then announce the preferred bidders by the end of March and contract award is planned for May 2010.

The Government would expect to procure a provider who can deliver a local and regional news service which has some unique qualities distinguishing it from the existing news provision at the most economically advantageous rate which is in the public interest.

How will IFNCs be funded?

The Government believes that IFNCs should be supported through a secure funding framework to prevent immediate decline; but this funding must achieve maximum public value such as driving innovation, skills and enhanced localness.

Funding for the three pilot IFNCs, which will be appointed on a minimum two year basis, will be funded from an underspend from Digital Switchover.

In response to a public consultation on IFNC funding last autumn5, the Government explained that its preference for funding IFNCs for the longer-term is to maintain a contained contestable element in the television licence fee.  Responses to that consultation suggested alternative funding options such as industry levies including administered incentive pricing (AIP) otherwise known as spectrum tax. It is for the Government to reach a final decision on this nearer the time.

The Digital Britain White Paper6 said, “though more sustainable than the current model, they may well need some independent public finance”. Government is keen to understand the potential for commercial revenues that might be used to potentially offset the amount of public funding and this is being explored through the three pilots. This might include commercial arrangements with the existing Channel 3 licence holder (e.g. in respect of sponsorship); selling content; or online advertising.

What does Clause 28 of the Digital Economy Bill do?

Clause 28 enables Ofcom, as an independent authority, to procure multimedia news providers for the UK’s nations, local communities and regions. Ofcom is an existing, publicly accountable body with a high level of knowledge and expertise across the communications marketplace.

Ofcom may exercise the functions under clause 28 though it is not required to do so. This will be contingent on available funding and a clear rationale that IFNC provision is needed in a particular area or areas. There is flexibility in defining these areas. For example, the area may be the entire Channel 3 licence area or a part of that area. This means that an IFNC could provide a news service over an area smaller than an existing licence area (e.g. at a far more local level). This could mean more than one IFNC covering a particular Channel 3 licence area which might be more preferable depending on the degree of localness expected or funding constraints.

Ofcom must publish criteria under this clause. The Government would expect this to set out the relevant and necessary information about how the process of appointment will take place and what the conditions of appointment will be. Those conditions may be set by Ofcom to cover a range of requirements for an IFNC appointment. There is greater emphasis on some elements in particular such as specifying quality, the form of distribution such as the platforms on which this news must be carried, and accuracy and due impartiality requirements.

How will profits be treated?

The Government expects that any profits will remain with the IFNC, as they would in any public procurement. Any funding for IFNCs under this clause can only take place following consultation with the Government who will take a view on any levels required, how that funding will be used and where this may be reduced to take account of supplemental commercial revenues or other factors.

How will they be appointed; and for how long?

The Government envisages the process that Ofcom will run may be similar to the IFNC pilots7.

The length of the contracts will be subject to particular factors such as the level and availability of funding, the timing of the commencement of the appointments within the Channel 3 licence renewal cycle or changes in the market (such as convergence in media platforms or technology where these have an impact).

The regional news obligations remain in the Channel 3 licences (which are up for renewal at the end of 2014). .

What is the decision-making process for IFNCs?

The Government has decided to take immediate action by procuring the three pilots. This will immediately address concerns about the sustainability of plurality in those areas. The decision to roll out IFNCs on a nationwide basis will be a matter for the Government at the time when it reaches a final decision on the funding.

Ofcom will exercise its powers under this clause in line with the Government’s decision on funding and following consultation in the usual way. It will have regard to the views of others including the Government and interested or affected parties, in particular, the Channel 3 licence holders. It may take into account its own analysis and the analysis provided by Channel 3 licence holders of whether and when an IFNC provision is necessary (e.g. to address an immediate risk of decline in plurality or the quality standard of news expected by audiences).

Before determining amounts to be paid under this clause, Ofcom must consult the Secretary of State who will guide those conditions to be put in place for the use of that funding and the circumstances in which all or part of that amount should be repaid. This is to ensure that IFNCs achieve value for money and are guided by the Government’s policy priorities.

What about editorial responsibility, quality, accuracy and due impartiality?

The Government believes that editorial arrangements are solely a matter for the IFNC provider, with the Channel 3 licence holder’s input where necessary.

Neither the Government nor Ofcom will have any role, or influence in any way over the editorial direction and editorial decisions around the news provision. Where Ofcom may set conditions is in relation to quality standards or where it might seek greater online provision. Where public funding is used, then the provision of content under the IFNC will need to be duly impartial and accurate.

Ofcom will continue to enforce the existing codes and regulations, where appropriate, in respect of accuracy and due impartiality. While accuracy and due impartiality will apply to the news content provided by the IFNC, whichever platform the news is carried on (and where this content is provided using public funds), the accuracy and due impartiality rules will continue to apply only to news on television and radio. It does not extend to cover newspapers or the internet where these rightly remain spaces for opinionated journalism.

What about content sharing or syndication?

The news content and newsgathering process is a matter for the appointed IFNC. The Government is clear that the IFNC must make its content available on fair, reasonable and non-discriminatory terms.

What about step-in rights or termination?

The Government recognises that a regional news service appointed under the IFNC model which is carried on television is a major change to the way broadcasters normally commission and provide such a service. This is something the Government has been carefully looking at during the pilot process. The Government is providing for step-in elements in the event of any failure of the appointed provider to ensure that the news can continue to be provided without break or transition. The Government would expect any contractual agreements put in place between Ofcom and an IFNC and the Channel 3 service provider will similarly deal with the appropriate step-in arrangements and the normal contract termination provisions. Such details may be contained in the criteria which Ofcom must publish as required in Clause 28.

Is there any scope for wider benefits?

Clause 28 in the Digital Economy Bill provides for conditions that might include commitments to developing media skills, investment in journalism and training. These are areas the Government supports strongly and the pilots will test how far the appointed news providers can promote such benefits.

As Big Ben chimed 11 last night, the Digital Economy Bill completed its final day in Committee Stage in the House of Lords. We have worked through more than 400 amendments over 7 sessions since early January. For full transcripts of each day of Committee, please see Parliament’s website here.

There is an obligatory 14 day interlude between Committee and Report stages, which coincides neatly with Parliamentary Recess. We will therefore return to Parliament after the 22nd. There are no fixed dates at present for Report Stage, but we will update this blog when they become available. Click here for an explanation of Report Stage and how it works.

In the meantime, an amended version of the Bill, reflecting the amendments made in Committee is available on the Parliament website, here.

** Update – official dates for Report now announced: 1st and 3rd of March.

Clause 42: Extension and regulation of licensing of copyright and performers’ rights (PDF)

(Download Copyright: further details as a PDF)

Introduction

This factsheet sets out to explain in more detail the Government’s thinking on:

• Orphan works: covering self licensing, definition of orphan works, concerns of photographers, remuneration and indemnification; and
• Extended Collective Licensing: covering opting out, representation, efficiencies, remuneration for rights holders and legal certainty.

Orphan Works

Self Licensing

An issue raised about orphan works is that the Bill does not limit the operation of such schemes to collecting societies: it also makes provision for ‘other persons’ to be authorised to use or license the use of orphan works. Collecting societies have argued that orphan works schemes should be limited to licensing bodies which represent rights holders. However, the very nature of orphan works – where the copyright owner cannot be identified or traced – means that it is not clear that collecting societies can claim to represent them.

In practice, it is likely that many orphan works schemes may be administered by collecting societies. Certainly, if they have the expertise and infrastructure required, then they should generate efficiencies which will enable the market to determine the right choice. But at the outset, the opportunity to set up an orphan works scheme should be available to all who wish to seek authorisation and are able to meet the criteria for authorisation. There is no good reason at this stage to rule out the possibility of other organisations, particularly those who have been ‘’foster parents’’ to large numbers of orphan works or those with specialist knowledge or expertise, from administering some schemes themselves. Any such bodies would be subject to the same regulations requiring financial transparency and accountability.

Some stakeholders have interpreted the provisions of Clause 42 as giving any body the ability to set itself up as a licensing body and run orphan works schemes. The provisions in section 116A contain powers enabling the Secretary of State to authorise a licensing body or other person to run an orphan works scheme. This means that anyone wishing to use or license the use of orphan works would need to apply to the Secretary of State for an authorisation. There is no question of an organisation simply setting itself up to run an orphan works scheme.

The power in the Bill enabling the Secretary of State to authorise orphan works schemes, together with the powers in the Bill to require codes of practice to be adopted, ll will allow the Secretary of State to introduce checks and balances to ensure that the interests of right holders, licensees and others are safeguarded in any authorised scheme. The Government has made clear its intention to only introduce regulations after full consultation which would be designed to ensure that all relevant interests were taken into account in any authorisation scheme introduced.

Definition of Orphan Works

There has been concern that the Bill did not include a definition of orphan works. This issue has been fully addressed by a government amendment which defines an orphan work and the steps to be taken to satisfy the requirement of a diligent search for the owner of the copyright. This definition and the criteria for a diligent search are both consistent with the recommendations of the EU High Level Expert Group on Digital Libraries.

Concerns of Photographers

Photographers are worried that the orphan works provisions will make it much easier for their works to be considered ‘orphan’. They fear that their work will be stripped of metadata which identifies them as copyright owners and be used without payment, possibly in ways that are objectionable to them.

The nervousness of photographers about these provisions is understandable as, at present, their works are especially vulnerable to being used without compensation. The orphan works provisions (as well as the extended licensing provisions) will help strengthen the position of photographers. These provisions will create a structured framework for photographers, enabling them to come forward and claim compensation for the use and exploitation of their work and/or stop the use of their work if they so wish. This is because organisations authorised to run these schemes will have to give wide notice of the establishment of these schemes as well as of the distribution of royalties, giving copyright owners ample opportunity to come forward. In addition, there will be obligations on authorised bodies to carry out diligent searches for the copyright owners before any work can be used or licensed as an orphan work.

Remuneration

There has been a call for greater clarity about the treatment of royalties generated from the use of orphan works. The Bill introduces a power for the Secretary of State to make regulations which cover the treatment of royalties generated from the use of orphan works. Specifically, the Secretary of State is enabled to make regulations covering the administrative costs that the licensor of an orphan work can charge; how long royalties must be held for the absent copyright owner of the orphan work; and what happens to those royalties if the copyright owner does not come forward after a certain period of time.

The detail of the secondary legislation will be informed by the full and formal consultations that the Government intends to undertake with all interested parties. These consultations will help answer questions such as what amounts to a reasonable licensing fee; a reasonable administrative cost; the length of time that royalties should be held for the copyright owner(s); and the treatment of any unclaimed sums. This level of detail has not been inserted on the face of the Bill because of our commitment to consult and be informed by the outcome of those consultations. It would be wrong to pre-empt those consultations by setting details in legislation at this time.

Indemnification

Some have asked for provisions in the secondary legislation which would allow the licensing body to indemnify the licensee against any liability incurred by the use of an orphan work. The answer to this is straightforward: as long as the use of the orphan work is licensed by an authorised scheme, there is no question of any liability in the event of the copyright owner coming forward, as the use of the work will have been authorised by the licence, in the same way that it would have been under a licence from the copyright owner themselves. Similarly, the copyright owner who turns up to find that their work has been used in the belief that it was orphan would have no claim for infringement as long as the use was licensed.

Extended Collective Licensing (ECL) Schemes

Opting Out

Some have suggested that the requirement for a rights holder to opt out of an extended licensing scheme could be burdensome, especially for small and medium enterprises. Again, the process for opting out will be the subject of consultation prior to any regulations being introduced under this power. The aim of the consultation will be to ensure that we have a workable system that correctly addresses interests of all parties affected by it, including right holders whose works may be licensed by a licensing body to which they do not belong.

It is worth noting that in those countries in which extended licensing already exists, the instances of opting out are extremely rare. Officials at the Intellectual Property Office had numerous discussions with government officials and collecting societies in a number of Nordic countries where extended licensing has been in place in some cases since the 1960s. In all these conversations, only a small handful of opt outs were on record.

Representation

Some stakeholders are concerned that licensing bodies authorised to run extended licensing schemes should be representative of rights holders in the category of rights that the scheme covers. Extended licensing is based on the principle of extending a licensing body’s repertoire when it manages a critical mass of rights in a particular category. The question of what qualifies as sufficiently representative is a matter for the secondary legislation. The answer will be informed by the outcome of the consultation that the Government intends to undertake before the secondary legislation is made.

Efficiencies

Some groups have argued that extended licensing may act as disincentive for licensing bodies to improve efficiencies because rights holders will no longer be free to choose whether a collecting society should manage their rights. As identified above, the rights holder always has a choice and can opt out at any point. On the efficiency point, it has been shown that extended licensing can in fact generate efficiencies for both rights holders and users of the licensing system. One UK collecting society has estimated that the introduction of extended licensing could see a 5% reduction in its cost base. These savings in administration costs would mean that more would be available for distribution as royalties to rights holders.

Remuneration for Rights Holders

A key benefit of ECL is that rights holders who are unaware of their rights or just unable to control or administer their rights in a complex rights environment will, on coming forward, have a framework that compensates them for the uses and exploitation of their work. A collecting society authorised to operate an extended licensing scheme will be required to give wide notice of its establishment. It will also need to give wide notice of the distribution of royalties. This creates the potential for rights holders who may have been unaware that their works were being used or simply unaware of their rights to come forward and be remunerated.

Legal Certainty

ECL has the potential to give greater legal certainty to rights holders, collecting societies, and licensees. There is some concern that the business models and operations of certain collecting societies could, in theory, give rise to the risk of civil or criminal sanctions. Given the demand for different types of usage of different rights, it is possible that a collecting society could get to a point where it may be effectively licensing outside its repertoire. ECL – 3 – would enable the licensing system to be structured to significantly reduce the risk of infringement in such cases because a collecting society would be allowed to include in its repertoire all works in the category for which it has been authorised without needing the prior consent of the rights holder. This means that collecting societies would be able to license confidently and consumers would have certainty about what works are included in the licences that they purchase.

(Download Online infringement of copyright: detail as a PDF)

Introduction

This factsheet sets out to explain in more details the Government’s thinking on:

• Who the subscriber is in terms of the Bill • The meaning of “allowed” in the Bill
• The position of community sites, libraries and educational establishments and home hubs
• Defences against an allegation of copyright infringement
• What protective measures are available for individuals and other subscribers

This fact sheet is in response to questions raised in Committee in the House of Lords on 12th of January 2009. For further background information about the Bill, and its clauses pertaining to Online Infringement of Copyright, please visit the Bill’s website

Who is the subscriber?

“Subscriber” is defined within clause 16 of the Bill in the following terms:

“subscriber”, in relation to an internet access service, means a person who-

a) receives the service under an agreement between the person and the provider of the service; and

b) does not receive it as a communications provider ( s.405 of the Communications Act 2003 provides : ‘communications provider’ means a person who (within the meaning of section 32(4)) provides an electronic communications service);

Hopefully (a) is clear enough, and could at its essence be regarded as being the person who pays the money to the internet service provider (“ISP”) for access to the internet. In many cases, the subscriber will not be the only person who is using the internet service. However, the subscriber will be the person who has entered into a contract with the ISP and usually one of the conditions of that contract will be that the service should not be used for any unlawful purpose. It is therefore not unreasonable to assume that the subscriber is the person properly responsible for what happens over that internet service. On a more practical note, the subscriber is the only person who can be identified from an IP address at a point in time – which is the information that a Copyright Infringement Report (“CIR”) will contain.

The reason for part (b) is to avoid the situation where an ISP becomes treated as a subscriber because they take a wholesale service from another ISP. The clear intention is that the notifications should reach the person or people who are using the internet service where apparent infringement is taking place.

This raises some interesting questions about those who provide a wi-fi network, whether free for anyone to use or restricted in some way. Organisations running this sort of service may be classed as a ‘communications provider’ within the meaning of the Communications Act 2003 or as a subscriber depending on the terms and conditions on which they both take and provide the service.

Where access is provided on the internet café model, typically with a time-based pricing structure and a service open to anyone, the provider of wi-fi access will be providing a 1 s.405 of the Communications Act 2003 provides : ‘communications provider’ means a person who (within the meaning of section 32(4)) provides an electronic communications service public electronic communication service. However, there are other circumstances in which wi-fi access is provided in a way which does not make it available to members of the public; where, for example, access is restricted to members of an academic community or to the customers of a particular hotel. The providers of this wi-fi access will not fall within the definition of subscriber if they receive the internet access service as a ‘communications provider’. For wi-fi providers who are providing a public electronic communication service, existing telecommunications regulation means that there will be an obligation to offer contracts and providers may be directed to publish information on the quality of their service.

We can be clear that a subscriber with a personal account, who allows others to use it by means of not securing it, is a subscriber for the purposes of the Bill.

The Earl of Erroll asked whether a user on the Parliament account would be a subscriber or not. The simple answer to that is no. The subscriber would be the organisation that has an account with an ISP. However, as the subscriber the account holder might well expect to set rules and standards of behaviour that they expect from those using their internet access. And it is reasonable to expect that subscriber to take steps to ensure that the account is not being used for unlawful purposes. In most companies, for example, misuse of the internet service is likely to be a disciplinary offence.

Implications for Community sites, libraries and educational establishments, internet cafes and home hubs

There is no doubt that Libraries, other wi-fi operators and other open-access providers serve a very important function, not least in helping the less advantaged in getting access on-line. It is difficult at this stage to say with certainty what the effect these measures will have on them. As described above, these sorts of providers might be classified as subscribers, or they might be classified as communications providers, depending on the terms and conditions on which the take and provide the service.

If the library or other provider is a subscriber in the terms of the Bill then they may receive notifications if their internet service IP address is identified as the source of apparent infringements. In this case there is obviously a chance that the library or other subscriber might in due course be subject to either a civil action by copyright owners or technical measures, should they be introduced.

We think this is right. Whilst clearly the Government has no desire to see libraries, community sites, or indeed, anyone else, suffer degradation to, or the temporary suspension of, their internet service we do think that it is important that these provisions should apply across the board so as not to create substantial loop holes allowing anyone who wants to continue infringing copyright to do so simply by going to an internet café or a library.

Those who provide this kind of service will be able to, and should, take steps to prevent infringement occurring on their accounts. There are many ways they can do this. Detailed information on technical approaches to securing home and local wi-fi networks is contained in the section of this paper on ‘reasonable steps’ below.

Briefly, the most significant factor will be the type of service that their customers can use. A library, internet café etc which offers access via PCs provided in situ can install the types of simple and inexpensive measures listed below to stop anyone using that machine from accessing particular sites or downloading P2P software.

Offering access via wireless connection poses a more complex challenge. A service which offers consumers a basic level of wireless internet access with limited amounts of broadband is unlikely to be used for copyright infringement. A library for example offering a wi-fi service which allows users to access e-mail, undertake web browsing but not to undertake more bandwidth hungry applications (on-line gaming, file-sharing, large data transfers, video streaming) is not likely to find that its service is being misused for copyright infringement. Of course, with the higher speeds that we hope will be available in the future that will not be the case – but the protections suggested below will certainly apply.

We would also expect that an establishment offering such a service would not want any such bandwidth-hungry applications to be run. One user file-sharing (legal or otherwise) could easily take up all the available bandwidth with the result that no other user could use the service at the same time.

For wi-fi providers where consumers have to pay for access, we would not expect in many cases that using this service to infringe copyright would prove cost-effective for the infringer. Almost all content can be obtained from (paid) legal sources, be it film, music, whatever. It would usually be cheaper to simply use a home broadband connection and pay to obtain the content from legal sources.

However, if they do find themselves receiving notification letters in connection with an alleged infringement, they can take easy steps to prevent infringers from using their connection in future, and I go into this in more detail below. Once again, the Government believes that it is reasonable to expect libraries and others offering these kinds of services to take steps to ensure this service does not facilitate unlawful activity. This is not new – libraries are already responsible if their users download criminal material.

The meaning of “allowed”

There was some debate on 12 January about what we meant, within the Bill, by the word “allowed”, which is used in clause 4 in subsection (1)(b). This sets out that the section applies if it appears to a copyright owner that –

(a) a subscriber has infringed his copyright by means of an internet access service or

(b) has allowed another person to use the service and that person has infringed his copyright.

The reason for underlining “appears” (rather than “allowed”) is that it is the first precondition for the copyright owner being able to send a CIR to the internet service provider. The owner is not going to know whether or not the subscriber has done anything to secure his system or whether the system is hijacked; he can only complete the infringement report on the basis of how it appears to him. The whole idea behind the notification system is to reduce the level of online infringement by warnings/education and to facilitate legal action being taken against serious persistent infringers. It is worth reiterating what we said in Committee – nothing is going to happen under the initial obligations until or unless the copyright owner takes civil action against those infringers having obtained their details through a court order. Under the Bill provisions we expect that copyright owners would focus their attention in respect of legal action on those who have been the subject of the most copyright infringement notices. These will be the subscribers who have had multiple letters informing them that infringement is apparently occurring on their connection and providing advice as to how to prevent it if the subscriber themselves is not responsible.

We hope and expect that the initial obligations included within the Bill (the notification letters) should reduce the level on online copyright infringement. But if these are to be effective they need to be backed up by the prospect of further action. That is why we consider it important for the Bill to include reserve powers to limit internet access (clauses 10 and 11). These tougher technical measures will be exceptional and a last resort.

We hope that it will not be necessary to introduce technical measures. But should technical obligations be introduced they will be likely to apply automatically to a subscriber once they pass a certain threshold of notifications. That threshold will clearly be a matter of substantial concern to Peers, but it is something that we envisage would need to be addressed in the Secretary of State’s order under clause 11 imposing the technical obligation. We have recently laid an amendment in response to concerns by the House of Lords Delegated Powers and Regulatory Reform Committee that would require these orders to be made by affirmative procedure, meaning that the House will have an opportunity to debate any order and take a view on it before it comes into effect. We do not think, therefore, that this is something on which we can or should be prescriptive about now. Apart from anything else, it might be sensible to apply one level of threshold to a relatively unintrusive measure (such as a download cap) but a much higher one to something as significant as temporary suspension of the internet account.

Once again, these measures would only be applied to those subscribers in respect of whose accounts the most CIRs had been lodged and who had consequently been sent multiple notifications ensuring that the subscribers understand the situation and have the advice they need to put a stop to infringement on their account.

However, once a technical measure is liable to be imposed on a subscriber they will have the opportunity to appeal against it and it is in this context that we agree that it is important to be clear on what defences could be relied upon. While it is important that we are clear that “allowed” has its normal meaning (and that it actually applies to what it appears to the copyright owner has happened, not to what has actually happened), and therefore there is no need of a definition in the Bill, we do need to address the points made by a number of noble Lords about what constitutes a defence in those circumstances. In view of its importance I address that separately and at some length below.

Defences against an allegation of copyright infringement

Understandable concern was expressed by a number of noble Lords that if subscribers were to receive notifications alleging copyright infringement then they should be able to defend themselves against those allegations if it was somebody using their connection without their knowledge. This will not be a particularly pressing concern, perhaps, for the initial notification, which we would expect to be couched in terms of friendly advice rather than stern reprimand, but we accept that for subsequent notifications, and particularly if technical obligations are applied, subscribers, whether they be individuals or community networks, may well be anxious to demonstrate that it was not them who had infringed copyright, or allowed it to happen, or that it was not their fault.

Of course, if this is part of a civil action by copyright owners, the details will be considered within that process and we could not and should not interfere, but that was not the focus of the concern. The question is what might a subscriber say in response to receiving a notification from their internet service provider, perhaps to appeal against being put on the copyright infringement list or against a technical measure being imposed?

Here, Lord Lucas suggested that “…we should not attach a liability to someone who has done all that could be reasonably be expected of them to behave correctly” (Hansard: Col 458). We really must be careful not to pre-empt the way that the independent appeals body, or indeed the First-tier Tribunal, wishes to operate. However, with that clear qualification, I do think that in practice the scenario put forward by Lord Lucas is an entirely sensible one – if a subscriber has taken all reasonable steps to prevent infringement on their network, and if necessary can show that they have done so, then that should be regarded as a good defence.

What might such reasonable steps be in practice?

It is worth remembering that advice about securing their internet connection is one of the things that the notifications to subscribers will include, and that advice will be written by industry experts not by Government. However, almost certainly reasonable steps would include protecting internet service wireless hubs through a password, making it much more difficult for the casual outside user to piggyback on a subscriber’s connection. Within a household the information and options to impose controls over what can be accessed are built into the routers and the browsers. This means that it is possible to impose those controls in relation to a number of different computers using the connection without having to install software or change settings on the individual computers. This is an important point in respect of households where those sharing the internet connection are not necessarily in a parent/child relationship that allows for putting controls on to a particular computer or other device.

It is also very easy to install free parental control software. Subscribers can also opt to only allow access at particular times of the day or only allow PCs or laptops that are registered to use a wireless connection. These are all standard and easy to use features open to wireless routers serving a household or indeed a small business. Community wi-fi providers can use a password to only allow particular individuals to use the service (although of course we accept that this is not necessarily what such wi-fi is installed for).

The main operating systems – such as Windows – also come with parental controls. These allow websites to be blocked by genre (e.g.) porn, gambling, chat rooms, shopping etc and can filter access to websites by other criteria, such as language. This is simple and usually done via a “tick-box” set of options on a menu. Specific websites can be added to a bespoke list by “cut and pasting” from the history of websites visited. There are a number of well-known sites where file-sharing software is obtainable, for example, and there are a number of well-know sites connected with unlawful file-sharing – the best known perhaps being Pirate Bay. This can be equally applied to households, community wi-fi or SMEs.

Although we acknowledge that peer-to-peer technology has many legitimate applications, should subscribers wish to do so, blocking peer-to-peer traffic specifically is more difficult. It is possible to block use of peer-to-peer (P2P) protocols but this does require some technical knowledge – for example the Windows Firewall can be configured to block P2P traffic but this is not a straightforward procedure. However, there are a number of freeware or inexpensive products which will block most P2P traffic, usually through a Firewall or by blocking access to ports that P2P protocols typically use. Again this is an option open to households and SMEs alike.

For community and other wi-fi operators, should they wish to do so, blocking P2P traffic will depend on the nature and configuration of the broadband connection. There are, though, a number of free or inexpensive products available.

The “Get Safe Online” website (http://www.getsafeonline.org/) – supported by the Government and Ofcom – lists three companies which provide filters and software which can block or filter content and who can also block the use of P2P programmes: Cybersitter, Net Nanny, and Cyberpatrol.

It also provides a link through to other sites such as GetNetWise.org which lists and evaluates a wider range of products including BSafe, Safe Eyes, ChildSafe and Cybersentinel.

These products typically cost in the region of US$40 (about £30) and allow the user to block the most popular peer-to-peer file-sharing applications such as Bit Torrent, eMule, Gnutella, Kazaa, Morpheus and Limewire.

For entities such as libraries, internet cafes etc a solution could be to address this issue when entering into the contract with the ISP. It is possible to ask them to block access to certain traffic (pornography, gambling etc) or specific website addresses or lists of addresses such as Pirate Bay. This may be a charged for service but the cost is not likely to be prohibitive. This facility is also open to individual private subscribers. However, there may be network performance issues that could arise if this were the norm.

Proxy servers are another common method of controlling access to the Internet. Users are not allowed direct access to the Internet from the network they are on. They are only allowed access to the proxy server. This proxy server is then allowed to access the Internet in accordance with a set of instructions, e.g. blocked sites etc. It is the proxy server that accesses the Internet and then passes the traffic to and from the user. The use of the server, over which the individual user has no control, means that it is very difficult for them to circumvent the imposed controls.

We would suggest that being able to demonstrate, as an individual or a community network, that these sensible and inexpensive precautions have been taken could go a long way towards persuading any appeals body that reasonable steps had been taken to prevent infringement.

It is readily acknowledged that nothing is 100% effective. It is possible to crack a the security on a wireless connection with the right software, time and technical know-how. But it is simple to make connections more secure and to block websites at the household, SME and community wi-fi level so as to make such circumvention much more difficult, and doing so would show that the subscriber had taken allegations of infringement seriously, and taken steps to prevent it.

The position in universities, raised by a number of noble Lords, is a little different – internet services at UK universities are provided by JANET (UK) – a private business-to-business network. They have the advantage of operating networks which are relatively small and to which the consequences for the individual of misusing a connection are relatively severe. For example, any loss of access by an individual following misuse would have a significant impact on course-work and the student’s studies. We would assume in this situation that JANET will be defined as the internet service provider under the legislation, and the universities will be the subscribers – but it is not possible to be 100% sure of the relationship without looking at the details of the contractual relationship. Of course there will be a threshold of numbers of copyright infringement notices received before JANET, if it is an internet service provider, would be subject to the obligations, and it is open to it (and/or the universities) to apply restrictions along the lines suggested above should it consider them appropriate in order to ensure that it does not cross that threshold.

(Download Internet domain registries: further facts as a PDF)

This factsheet explains the detail of the Government’s policy on domain registries. For an introductory factsheet please see Internet Domain Names: Factsheet.

Why we think the powers are necessary

The Internet is an integral part of the UK’s economy. The domain name system is a crucial element of the Internet economy and in the UK the .uk domain is a key part of that. However, Nominet, the registry that runs the .uk domain, is like many other domain name registries, a private company over which the Government has no control should the need arise. We have been particularly concerned about some past problems at Board level at Nominet. Whilst the Government has strong confidence in the way Nominet is currently run, the possible implications for the interests of wider stakeholders should operations at the registry be disrupted in future has helped to persuade the Government that it should seek these reserve powers on a precautionary basis.

The domain name industry in the UK is self-regulated and has been so for many years. This has largely worked well and the Government’s intention is that self-regulation by domain name registries should continue. Some registries and their registrars are ‘regulated’ through specific agreements with ICANN, for example .tel and .com. Country code domain registries (such as Nominet) are not.

There are no current Government plans to intervene in any domain registry and it is intended that the powers in the Digital Economy Bill will only be exercised where self- regulation fails to the detriment of consumers, businesses or the UK’s wider Internet economy. However, as mentioned above, as things stand at present, the Government has no powers to act to protect these interests if self-regulation was to fail.

It should be made clear that the new powers will not permit the Government or OFCOM to nationalise any domain name registry or any registrars.

Amending the scope of the powers

Since the Bill was drafted, the Government has realised that the provisions on domain names could have unintended consequences. For example, they would catch any organisation, such as BT, that runs its own name server, and the registries for some other country code domains that are situated in the UK. The Government has, therefore, proposed an amendment that restricts the scope of the powers to cover Top Level Domain registries where the domain is UK-related.

What will happen in practice before deciding to exercise the powers?

We do not expect a registry to act beyond its powers to correct any failure that it could not reasonably address, for example where that failure results from the actions of a third party over which it has no control. However, if a deficiency in self regulation resulted in continuing failure, then the Government would expect the registry concerned to take corrective action, or at least explain why corrective action was neither appropriate nor possible. Use of the powers in the Bill would be a last resort. In practice, the Government would expect to enter into a dialogue with the registry concerned to explore ways of dealing with the issue that had arisen.

What is a serious failure of a domain name registry?

The Impact Assessment (Word doc) and Explanatory Notes published at the same time as the Bill highlight some of the instances of domain name abuse that might be considered a failure of a registry. These include domain names being used for phishing (a form of internet fraud) or for distributing computer viruses, for setting up websites selling fake tickets to events, and, in some circumstances, cyber-squatting (registering domain names which are of economic value to other people and then charging those people high prices to buy or use them for their own purposes.) and drop-catching (waiting until the expiry date for an existing registered domain name, snatching it and then charging the previous owner to buy it back).

Similarly, a registry which lacked any adequate dispute resolution system, leaving complainants forced to resort to court action to gain redress, would be considered a failure.

A failure, or combination of failures, which affected the reputation or functioning of UK networks or services, or the interests of UK consumers or the public generally, would be a “serious failure” and would trigger the Secretary of State’s powers.

What is self-regulation?

Some examples of where the Government considers existing self regulation to be working well (both involving Nominet):

1. In December, Nominet worked with the Metropolitan Police’s Central e-Crime Unit to take down around 1200 .co.uk domain names that had been used by criminals to set up websites selling counterfeit goods. Although Nominet was under instruction by the police to comply, Nominet worked closely with the police to ensure rapid response to their instructions as part of the registry’s stated aim always to take fast, effective and responsible action to protect consumers and end users.
2. Nominet implemented a phishing lock to allow a registrar, when presented with credible evidence e.g. by the police, to lock a domain name that has been used for phishing. This suspends and locks all the information linked to that domain name such as access to website, and also prevents the domain name being re-registered so that it cannot be used. Nominet is also currently working on a phishing clearing house to provide information and a notification service tool of verified phishing sites.
3. Nominet has a Dispute Resolution Service (DRS) that offers an efficient and transparent method of resolving disputes in the .uk Top Level Domain. Through the DRS, Nominet seeks to settle .uk domain name disputes through mediation (free of charge) and, where this is not possible, through an independent expert decision that costs from £200. This is the usual mechanism to deal with complaints about cyber- squatting and drop-catching.

When the powers might be exercised

In practice, the Secretary of State would be alerted by a significant number of complaints of domain name abuse from the public or businesses, or a steady increase in complaints over a period of time. These complaints might be about consumers being duped or misled, or bona fide companies (especially small firms) being defrauded or losing customers, as a result of the activities of a registry, its registrars or end users. We are aware however, of the potential for malicious lobbying by organisations with vested interests calling for action against a registry: that is one of the reasons we would expect to have a dialogue with the registry concerned before exercising the powers.

The following are examples of actions which could amount to a failure of a registry:

• The registry was not utilising existing mechanisms in place to deal with those complaints;
• The registry would not consider/make modifications to those mechanisms to make them more effective;
• The registry was altering those mechanisms or reversing its policy to the detriment of members of the public and business (perhaps by making it more difficult to pursue a complaint).

If the level of failure were to sufficient adversely affect the reputation or, the functioning of the UK’s Internet economy or the interests of consumers or the public, that would tend to indicate that self-regulation was failing and would amount to a serious failure for the purposes of the legislation. Ultimately though, it would be the Secretary of State’s decision whether the situation was sufficiently serious to warrant the use of his powers.

Draft Statutory Instrument on Costs (PDF) (NB Please note that this is a draft, designed to give an idea of how the cost issues could be approached. The proportional split included in the draft is a working assumption. Before laying the SI, we will conduct a full consultation.)

Download Online infringement of copyright: Outline of initial obligations code as a PDF

Britain’s Creative Industries

Oxford Media Convention, 21 January 2010

I am delighted to be here.

All of us derive huge pleasure from the rich and varied output for which this country is responsible – as viewers and listeners, as readers and increasingly online. Around the world, British film, music, computer games, magazines, fashion, design, advertising, architecture fire people’s imagination and bring them joy. Creative talent is a great source of national pride. There’s no better advert for Britain. And our strength in all those fields is of immense economic significance.

The creative industries account for over 6 per cent of gross value added – around £60 billion. Export earnings are around £16 billion a year – about four per cent of total exports. And some two million jobs.

As Minister for Digital Britain, it’s my job to secure future success in the creative industries. Making sure we have world-class infrastructure, a sound intellectual property regime and the right skills in the workforce. Government activism is a practical necessity. And let me set out the reasons why.

First, we’re emerging from the worst global downturn for 60 years. The world economy shrank last year for the first time since World War Two. Its essential after the challenges of the past couple of years – and the challenges ahead as the world economy returns to growth – that we make the most of the new opportunities which are opening up. This sector presents some of the best of them.

We have to focus on growth, on supporting sectors where we have the best chance to take advantage of existing strengths, create new jobs, and do well in emerging markets. The creative industries are at the top of the pile.

Second, given the environment in which you operate – where, to take just one example, digital communications are changing everything – coordination on a national scale is essential if we are to maintain our strong position. We need to be working together on the big challenges which the creative industries are facing.

The Digital Britain white paper, published last June, was the first comprehensive overview of the UK’s position as a digital knowledge economy. It had a clear assessment of the digital infrastructure we need, and the means to deliver it. Our aim is for creative industries which are flourishing, for people with the skills to participate fully in a digital society and for Government using the new technologies to deliver public services better than we did in the past.

I want today to highlight three challenges ahead. Successfully resolving them will underpin our ambition to be one of the world’s leading knowledge economies in the new digital era. The three are:

• Broadband;
• Intellectual property;
• New business models.

Broadband

First, broadband.

We have two major broadband projects in the pipeline: a commitment that every home in the country should be able to obtain a 2 Mbit/s broadband service – and so be able to use the applications which most people are using broadband for today. And a next-generation fund to support national scale investment in much higher speed services.

We were slow to get started with broadband. I am now in my third stint as minister responsible for communications. We have seen the market delivering for us over the past decade. We have a very competitive market which can deliver decent broadband to around 90% of homes. Without intervention, it will make next generation broadband services available to around two-thirds of UK homes over the next decade.

But we need to do better than that. This will be the essential infrastructure for the future economy. I was speaking to a group of MPs from rural constituencies last night. One of them said broadband is now more important than mains electricity for remote parts of his constituency. If people are off the grid, they can just buy a generator, but, if they haven’t got broadband, they are stuck. So we have identified how to secure a billion pounds worth of investment over the next seven years so that the benefits of high-speed broadband stretches much further than they would do without public intervention.

We’ve published proposals to subsidise the roll-out of high speed broadband, covering at least 90 per cent of homes and businesses by 2017. Funding will come from the 50p per month levy on phone lines, and it is my aim for that to be included in the finance bill which will have to go before Parliament this side of the General Election.

This is a massive undertaking. We need to think carefully about the details of the levy, so that it’s fair and doesn’t penalise particular businesses or groups of people. We need to get the design of the overall scheme right, so there’s full value for taxpayers’ money. We will focus resources on areas that the market won’t otherwise reach, and we need to come out the other side with technical capabilities for use over the years to come. We’re consulting on all these points.

Access to high-speed networks will be a necessity for full participation in the global digital economy. Areas without them will be at a big competitive disadvantage. That is why public investment is needed.

I met a group of businesses in Plymouth last month.They told me that – in the past – they used to lobby for better road links or faster rail services. Today they see that the key now to the competitiveness of their city is cost effective digital links – and if they have them, then their creative businesses can compete with counterparts anywhere in the world.

And we don’t just see this as a national issue. Europe is turning its mind to EU 2020 – the economic strategy which will be the successor to the Lisbon strategy, dealing for example with how Europe prepares for the shift to a low-carbon economy. We have published this week our proposals for an EU Compact for Jobs and Growth, including our call for the European Union to develop a new broadband strategy, with pro-competitive measures to facilitate the rollout of high-speed services.

Intellectual property

Second, intellectual property.

Nobody here needs any reminder from me about the importance of finding answers to the problem of online copyright infringement. Technological developments that have generated so many new markets, new platforms for content and exciting channels for creative expression have also overturned traditional business models. They’ve made content freely available to people who love what they’re getting but aren’t keen to pay for it.

Copyright infringement has been around for a long time. But in this digital age, it’s on an altogether different scale. And it is costing the creative industries hundreds of millions of pounds every year.

Government has to help in finding a solution. And it requires legislation.

We’ve introduced provisions in the Digital Economy Bill, being debated in the House of Lords at the moment, that will require internet service providers to write to those of their customers who are found by rights holders to be infringing copyright through peer to peer file sharing. Internet providers will also be required to make data available to rights holders, so they can pursue legal action against serious offenders. This approach will be backed by powers to impose technical penalties – like bandwidth capping or temporary account suspension – as a last resort.

It needs to be proportionate. And it needs to be underpinned by a clear and effective appeals mechanism. But the measures will achieve a big reduction in online infringement and – just as important – give rights holders space to develop new business models.

Cooperation from internet service providers is vital. The benefits of what we are doing will go to the rights holders. So I have not been convinced by the arguments of rights holders that the Internet companies should bear much of the costs. So this week, we have issued a draft statutory instrument setting out a 75-25 per cent split between rights holders – the primary beneficiaries – and internet service providers for the costs of enforcement action on copyright infringement.

Further discussion is needed about this. We have set out our argument, which is to encourage both rights holders and ISPs to keep costs down, to keep processes simple and efficient, and to continue to look for commercial solutions to copyright infringement. And I hope there will now be more fruitful dialogue between rights holders and Internet providers than there has been so far.

There’s real urgency here. We need the provisions in the Digital Economy Bill to make an impact quickly. That means putting a code of practice in place quickly. I hope interested parties will work with Ofcom while the Bill is still in Parliament so that the outline code can take shape. And the Bill also contains provisions to address infringement beyond the peer to peer file sharing which accounts for the bulk of the problem at the moment.

New business models

The final issue I want to cover is the need for this industry to come up with new business models – and what Government can do to help.

The space the legislation provides to develop those models will be important. But rights holders must get a move on. Legislation is not the whole solution to the problems. Rights holders need to develop new ways to make content available to people in formats that they want and at a fair price – reducing the incentive to break the law. Progress has been much too slow. We also need initiatives to educate people about why creativity deserves to be fairly rewarded.

The Digital Britain white paper announced a £10 million investment in digital test beds, providing low-cost, low-risk opportunities for companies to experiment with ideas and find ways to monetise new online content. The aim is to make progress on understanding how innovations like micropayment can help reduce piracy.

The test beds support companies to take part in consortia – testing applications, services and new ways of working. They should be up and running this Autumn – finding practical ways to reduce copyright infringement and help companies flourish in the digital economy. You need to seize those opportunities, and work out how you can be as successful in the future as you have been in the past.

We are seeing new consumer services emerging in the UK – like Sky Songs and Youtube’s partnership with Channel 4. We want services like these to thrive, just as Spotify did when Sweden introduced regulations similar to those we are putting in place. And research from DEMOS and others has underlined that better legitimate online services are the best way to stop people from sharing files illegally.

Conclusion

There’s a long way to go with the Digital Britain programme. I have set out what we are doing in three key areas – broadband, copyright, new business models. And new challenges, as yet unforeseen, will emerge too, and we will have to resolve them.

But we are good at all this in Britain. People who have been denouncing each other should be talking together. What I would ask is that all of us work together in the period ahead, to make the most of the digital economy, and to make a reality of the ambitions that all of us share.

Thank you.

(Download Power to amend copyright provisions: the details as a PDF)

Power to Amend Copyright Provisions: what is it?

This is clause 17 of the Digital Economy Bill, which provides a limited capability to ‘future proof’ powers in the Copyright Designs and Patents Act 1988 (“CDPA”) to deal with civil infringement of copyright online. It is not a power to make sweeping changes to the nature of copyright or to what constitutes copyright infringement for the purposes of Part 1 of the CDPA, as has been suggested.

Why is this clause needed?

Technology in this area moves fast and this clause will enable Government to move quickly and flexibly if the existing legislation is not able to provide adequate forms of redress for civil infringement of copyright that takes place online.

Elsewhere in the Digital Economy Bill we are legislating to create a framework to help rights holders take action against those unlawfully sharing material online via many to many services such as peer-to-peer (P2P) in a way that infringes copyright.

However unlawful file-sharing using P2P is not the only form of infringement which takes place on line. It is currently the most damaging but this may not always be the case. We need to be able to react far quicker to prevent or reduce widespread copyright infringement that is enabled by use of any new technologies in the future

Isn’t this a very wide power?

The power is quite restricted, both by limitations in the drafting of the clause itself, and by external limitations arising from the context in which the power operates, for example the requirement that the powers must be exercised consistently with human rights obligations and European legislation.

The wording of the clause requires that the power may only be used:

• to prevent or reduce copyright infringement on line if appropriate to do so having regard to technological developments that have occurred or are likely to occur
• to amend the CDPA in ways that do not create or amend any criminal offences
• following consultation
• by means of affirmative resolution procedure in both Houses

In addition to these limitations in the statute, the power may only be used in a way that is consistent with Convention Rights, with European Directives on subjects such as copyright protection, Internet Service Provider liability and privacy and in a way that is consistent with principles of administrative law.

For example, despite what some commentators have suggested, this power must be exercised consistently with the limitations imposed on general or specific monitoring of internet traffic in EU law.

As you can see, this power is not as broad as some commentators have attempted to claim. The limitation that the power may not amend any criminal offence in particular means that no alteration may be made to what constitutes copyright infringement subject to a criminal penalty, significantly restricting the uses to which this power could be put.

Does this give you a power to do things without parliamentary oversight or debate?

No, the Bill clearly requires a consultation followed by a vote in both Houses of Parliament before the power could be used to bring in secondary legislation.

For what is the power to be used?

We can envisage today some potential areas where this power could be required, for example to clarify or otherwise streamline the injunctive procedure available under section 97A (this section may offer rights holders a course of action for example against the use of certain website hosted services for copyright infringement, but has never to our knowledge been used). However, the point of this clause is to allow the Secretary of State to respond quickly to threats when they arise in the future. By their very nature we do not know precisely what those threats are today. That is why this power is drafted in general terms, with appropriate safeguards, so that it remains useful as technology and behaviours develop.

Background facts

The creative industries are a significant source of employment and national wealth creation, as well as delivering cultural and social benefits. They contribute 6.4% of GVA and have grown by an average of 4% over the past decade compared to 3% for the economy as a whole.

Creative industries have indicated they suffer considerable losses from unlawful peer-to-peer file- sharing. The BPI claims that unlawful file-sharing using P2P costs the UK music industry £180m pa (2008), while IPSOS gives a loss in the UK for TV and films of £152m (2007).

(Download Online infringement of copyright: the details as a PDF)

What is online infringement of copyright?

There are many forms of online infringement of copyright, including people unlawfully swapping copyrighted music or films with friends or unlawfully downloading copyrighted material from particular sites. The majority of the clauses in the Bill are particularly intended to tackle unlawful many-to-many file sharing also known as unlawful file-sharing on peer-to- peer (P2P). Details about copyright changes in the Bill are available in a separate factsheet.

How is it used?

P2P technology has many legitimate uses – providing opportunities and benefits to Internet users. For example, Linux open source software is shared this way, and the music streaming service Spotify is also based on P2P. Academic and research institutions use it to send very large files. It is not the intention to interfere with such use or to create barriers to the legitimate use of this technology. However, it does enable users to share information that they are not entitled to share – for example, by sharing software or audiovisual materials without permission, in breach of copyright law.

How does it work?

The software typically used in file-sharing was developed in order to allow people to make the most effective use of computer networks. Rather than relying on a central file server (people going to a common source which holds millions of files in one place), a P2P computer network has no central store of files. Instead, it uses a series of ad hoc connections between participants in a network and the cumulative bandwidth of network participants. This first took the form of a central file server which acted as “index” and introduced two users together (one with the content; the other seeking the content). This was the original “Napster” model (diagram 1). Later, the need for a central index was dropped and P2P networks became de-centralised (diagram 2). Such networks are used for many purposes – sharing files (i.e. file-sharing) containing audio, video, data or anything in digital format is very common, and real-time data, such as telephony traffic, is also passed using P2P technology.

The advantage of a P2P network is that all users provide resources, including bandwidth, storage space, and computing power. As additional users arrive, and demand on the system increases, the total capacity of the system also increases. This is not the same for client- server architecture with a fixed set of servers, where adding more clients could mean slower data transfer for all users. As there is no one central server, P2P networks are typically more robust. Furthermore, as individuals use a number of different connections to download the (same) information, this avoids bottlenecks.

Many of the most popular file-sharing sites (such as Limewire) use BitTorrentTM technology. This is a protocol (a set of rules and a description of how to do things) which allows users to download files by allowing those downloading the file to upload parts of it at the same time. It therefore works by downloading small bits of files from many different web sources at the same time.

A key feature of P2P file-sharing software commonly used in illicit file-sharing is that in order to participate and download files, the user is expected to make available the files on their computer. In other words, if you want to copy files from someone, then your own files should be equally available for others to copy. It is such reciprocal arrangements that enable P2P in illicit copyright to happen on the scale it does.

How do copyright owners detect copyright infringements?

It is also this feature which allows the rights holders to identify who is unlawfully copying material. The act of joining a P2P network and actively accessing copyrighted material for download provides them with the IP address of the up-loader. In order to take legal action against infringer uploading these files the rights holder needs to relate this IP address to an account holder and a physical UK address – the computer records held by the ISP can provide this information, and is obtainable via a court order. Under the Digital Economy Bill, this will not change – except that the Bill will enable rights holders to identify those account holders who have been identified by them as infringing most often (which they would not know from the IP address alone, since this is generally dynamic – it changes each time you log on).

It is not difficult to identify which Internet Service Provider (ISP) is responsible for the IP address (lists of who holds what batches of addresses are readily obtainable), and so this is not something that should exclude smaller rights holder organisations from entering the process. Under the provisions in the Bill, they will have to comply with the standard of evidence to be set out by the code, and to pay the flat fee for sending the notification, plus a share of the regulator’s costs.

Diagram 1

Central file-server acting only as index “introducing” two users to each other

Diagram 2

No central server. Each user (peer) will directly contact the other to source content.

Q&A

What’s the difference between uploaders and downloaders?

In this context, an uploader is someone who makes copyright material available for copying by others. A downloader is the person who takes a copy of that material. Doing so without permission of the copyright holder or their agent or under a specific copyright exception are breaches of copyright.

Why is the uploader the focus of the approach?

The way in which copyright owners find out about online copyright infringement is to go on- line and search for their material. As they know who is entitled to offer their content, they are able to identify unauthorised sources – this is the uploader. By downloading material from the uploader they are able to establish that it is their material and thereby gain evidence which can be used to identify the uploader. For the data transfer – the copying – to take place the uploader and downloader reveal their IP address to the other.

The only way to identify the downloader would be to offer material for copying (i.e. become the uploader). However, in doing so the copyright owner is arguably inciting such actions.

Doesn’t some P2P technology allow you to download and not upload?

It is possible to only download – although the default setting is to upload as you download. This is something many people are not aware of and so they may be unaware they are uploaders. It is possible to alter P2P settings and download only. However, most P2P facilities require upload and download.

What will be the effect on wi-fi or free wireless sites (e.g. Starbucks)?

Typically, such locations offer a limited amount of bandwidth, sufficient for e-mails or web browsing. They are not well suited for large-scale data transfer. Whether or not a provider of a public wi-fi network is a ’subscriber’ in the terms of the Bill and therefore subject to notifications, being put on the serious infringers’ list and potentially technical measures, will depend on whether they are receiving the internet access service as a ‘ communications provider ‘ within the meaning of the Communications Act 2003 . We think that for some wi-fi hubs this will be the case but for others it may not, depending on the terms and conditions on which they take the service. What we can be clear about is that a subscriber with a personal account who simply allows others to use it by means of not securing it, is a subscriber for the purposes of the Bill.

Where a wi-fi provider is a subscriber they would receive the notification letters. This is because the file-sharer using the wireless connection would be using the IP address allocated to the wi-fi site. Our expectation is that if an organisation providing wi-fi started getting notification letters, they would take action to prevent users from accessing or using file-sharing sites. Software is freely available to block access to such sites. This would not prevent access to email or other core applications.

What is happening elsewhere in Europe?

France

France is introducing a “3 strikes” system (HADOPI3), whereby after two warnings internet access can be suspended for up to one year after a court ruling. During this period the subscriber is prohibited from transferring to another ISP. It is also an offence for a subscriber to have an unprotected wireless broadband connection. However, the French position is different to the UK. In France, copyright infringement is a criminal not civil offence.

Sweden

Sweden introduced new laws in April 2009 which are reported to have reversed a decline in music sales (both on-line and physical sales). The law now requires ISPs to hand over the personal data associated with an IP address if directed by a court. This allows copyright owners to take legal action against infringers. In addition, copyright owners undertook a successful legal action against “the Pirate Bay”. This is a Swedish based website strongly linked with unlawful copyright infringement.

European legislation – Amendment 1382

Following completion of the Conciliation Process, the European Parliament has voted to pass the Telecoms Package which included “Amendment 138”. This limits the ability of Member States to restrict internet access to individuals and requires certain safeguards, notably “a prior, fair and impartial procedure” and that “access to a judicial review has to be ‘effective and timely’”. Any measure must also be “appropriate, proportionate and necessary”.

We are satisfied that our proposals which involve multiple warnings and a robust and rapid route to an independent body backed up with access to a First Tier Tribunal is consistent with the Telecoms Package.

What’s stopping me from signing up with a non-UK ISP?

Several of the main UK ISPs are foreign-owned. However they all offer internet to subscribers in the UK and use UK infrastructure. As such, they will be bound by the obligations in the Bill and the underpinning code.

It is possible for a UK subscriber to sign up to a non-UK ISP who does not use UK infrastructure to deliver broadband via satellite. In theory, such a ISP would be caught by the obligation (they are an ISP offering services to a UK subscriber and would be responsible for allocating the IP address to that subscriber), in practice they could not be obliged to comply with the obligation. As a non-UK based company, Ofcom’s powers would not apply to them.

However, this is a small part of the market. It is (relatively) high cost and the bandwidth available to a subscriber is limited. Although it is possible to use such a service to file-share, the high cost and lower speed mean it is not currently regarded as a significant problem. Finally, the IP address allocated to the subscriber would not be identified as a UK one or one allocated to a UK company. Therefore, if an infringement was detected and linked to the IP address, the copyright owner would not identify it as a UK infringement and pursue it in the country in which the satellite ISP was based.

Notes

“Measures taken by Member States regarding end-users’ access to or use of services and applications through electronic communications networks shall respect the fundamental rights and freedoms of natural persons, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and general principles of Community law.

Any of these measures regarding end-users’ access to or use of services and applications through electronic communications networks liable to restrict those fundamental rights or freedoms may only be imposed if they are appropriate, proportionate and necessary within a democratic society, and their implementation shall be subject to adequate procedural safeguards in conformity with the European Convention for the Protection of Human Rights and Fundamental Freedoms and with general principles of Community law, including effective judicial protection and due process. Accordingly, these measures may only be taken with due respect for the principle of presumption of innocence and the right to privacy. A prior fair and impartial procedure shall be guaranteed, including the right to be heard of the person or persons concerned, subject to the need for appropriate conditions and procedural arrangements in duly substantiated cases of urgency in conformity with the European Convention for the Protection of Human Rights and Fundamental Freedoms. The right to an effective and timely judicial review shall be guaranteed.”

(Download Digital Radion Upgrade: The details as a PDF)

What are we trying to do?

The Digital Britain White Paper set out the Government’s ambition of achieving a Digital Radio Upgrade by the end of 2015. In order to meet this target, we want to achieve three things:

• To amend the licensing regime to allow for further renewals of analogue licences based on the provision of DAB services;
• To facilitate changes to the local multiplex map to improve DAB coverage; and
• To reduce the regulatory burden on local radio, giving it more freedom to invest in its digital future.

Details of the changes to digital radio in the Digital Economy Bill are included in a separate Digital Radio Factsheet.

We set out in the White Paper the criteria which must be met before a date for digital switchover can be nominated. These criteria require 50% of listening to be to digital, and DAB coverage to be comparable to FM. Ofcom and the BBC will produce reports that refer to these criteria, which the Secretary of State must consider before deciding on a date for switchover. Although 2015 is the target the Government and radio industry are focussed on, it is not included in the Bill as it will be the consumer-led criteria which will determine when the switchover takes place.

What is digital radio?

The principal benefit of digital radio is more effective use of spectrum which allows for more services on a single frequency. This is achieved by compressing the audio signal for a number of radio stations into a single radio frequency (multiplex) which is de-compressed and decoded by the digital receiver. A multiplex, which transmits the compressed radio signals in a given transmission area, can carry up to 10 stations along with data services. This provides listeners with more choice and more functionality.

Digital radio can also be broadcast via other digital services such as the internet and digital TV. However, none of these platforms are suitable as the primary distribution platform for radio, particularly as they were not designed to support reliable outdoor delivery and a significant proportion of radio is consumed ‘on the move’. In the UK, the technology adopted to provide portable digital radio is Digital Audio Broadcasting (DAB), which is delivered via a number of multiplexes across the country. In addition to providing listeners with more radio stations, to cater for all interests and communities, DAB also offers better reception than AM, and in some cases FM, allows for easy tuning that finds stations at the push of a button, and provides more information with scrolling text, slide shows, and an electronic programme guide to plan your listening in advance.

How is radio currently licensed?

The BBC’s radio stations are regulated by the BBC Trust, under the terms of the BBC Charter and Agreement. Licensing the commercial and community sector is the responsibility of Ofcom. Ofcom awards national commercial licences by means of a cash- bid auction, while local commercial licences are judged on merit in what is known as a ‘beauty contest’. Both licences have been or can be renewed for 12 years subject to the provision of a simulcast, or substantially similar, service on a relevant DAB multiplex.

However, within these renewals Ofcom has only limited powers to revoke licences. In order to enforce the switchover date it will be necessary for Ofcom to terminate licences for analogue services, in effect creating a common end date for licences on the nominated date for digital switchover.

In respect of radio infrastructure, in the UK there are 2 national multiplexes (one commercially owned and one BBC) and 46 local commercial multiplexes. Ofcom award the frequencies for these commercial multiplexes and license and regulate them with the statutory aim of securing a range of services from a number of providers to meet the diverse needs of listeners.

The UK local multiplex map requires a “re-design” to improve DAB coverage as, firstly, in some areas multiplex capacity is greater than the demand from broadcasters and, secondly, there are parts of the country still not covered by a local DAB multiplex, which cannot be filled by licensing a new multiplex.

Details on how the Digital Economy Bill will address these limitations to current licensing regimes are found in the separate Digital Radio Factsheet.

What are we doing to minimise the impact on listeners?

Listeners’ ability to move to digital is an important consideration in the switchover. DAB receivers are already easy to use and affordable with the cheapest sets available from about £25. The Government welcomes manufacturers’ commitment for sub-£20 sets in the next two years and is looking closely at market opportunities for a ‘set-top box’ solution for analogue radio which would allow existing analogue radio sets to receive DAB.

To ensure that future policies take account of the wide range of listener needs we have invited the Consumer Expert Group, which brought together key consumer representatives to inform the Digital TV switchover process, to extend its scope to cover radio. In addition, we will conduct a full Impact Assessment, the results of which will help determine whether there is a case for a Digital Radio Help Scheme and, if so, what might be its scope.

How do car radios fit into this?

The Government is working with car manufacturers, with the aim that vehicles sold with a radio are digitally enabled by 2013. For cars with analogue radios, we believe the price of DAB sets will fall, but also “set-top” FM converters should become more widely available and be included in devices such as satellite navigation systems.

(Download Public lending right as a PDF)

What is our ambition?

To give libraries the authority to legally lend books in digital formats by exempting libraries from certain aspect of copyright law, removing the need for libraries to negotiate individual contracts with publishers. The changes also extend eligibility for compensation under PLR to rights holders of non-print book formats, including authors, narrators and producers.

What is Public Lending Right?

PLR payment is a small amount of funding paid directly to authors as recognition for the loan of their books by public libraries. The legislation also allows public libraries to lawfully loan books by exempting them from certain copyright legislation. Currently only printed books can be registered for Public Lending Right (PLR) payment.

What are the changes?

The clause in the Bill responds to and reflects the changing nature of book publishing and the increasing demand for the loan of books in formats other than print by extending the eligibility for PLR to non-print books, extending PLR to lending rights holders in respect of these non-print works and expanding the definition of a ‘loan’ by a library to include digital media loans. (Non-print formats will include CDs, tapes and downloads of e-books and audiobooks.)

Why are the changes needed?

PLR legislation needs to be amended to reflect the growing market for books in non-print formats such as audio and e-books and allow libraries to keep pace with digital technology. We want libraries to be best-placed to meet consumer demand for books in these formats, but only authors of printed and bound books currently receive PLR payments. There is no coordinated compensation for creators of non-print books. Instead, they must negotiate compensation for their lending rights independently with the 210 library authorities in the UK – a complex and time-consuming process. It is possible that contracts currently negotiated between libraries and publishers for the loans of non print books do not protect libraries from legal challenges in respect of authors’ lending rights. We believe that digital lending will encourage access by new users especially children and young people, and continue to attract them to the literature and information which libraries hold.

What are the benefits to business?

The changes will smooth the process of digital lending for libraries (within the library premises) and remove the need for libraries to negotiate individual contracts with publishers. This is therefore likely to encourage digital lending. If rights holders are being compensated through PLR the guaranteed source of income might incentivise creators to enter the market who would otherwise be put off by the complexity of licensing negotiations. This could in turn encourage investment in product development and, as more titles become available in more and newer formats (e.g. on CD, as digital download within the library or loaded and loaned on hardware etc), demand for this material in libraries could increase, stimulating increased sales.

What are the benefits to consumers and citizens?

If sales are stimulated as a result of extending PLR to these new formats and rights holders, the choice of material available to library users will improve. This could particularly benefit visually impaired people, 62% of whom, according to a survey conducted in 2001, prefer to ‘read’ fiction as an audiobook over other book formats, e.g. Braille.

What about publishers?

We do not believe that extending PLR to books in digital formats will undermine the ability of publishers to extract revenues through bookselling. PLR will only be extended to audiobook and e-book files downloaded within library premises. Libraries will be able to continue to make their own arrangements if they want to provide digital library services to the home. There may also be sales opportunities for publishers that partner with libraries providing digital lending.

What about illegal copying of digital files borrowed from libraries?

Digital lending will be restricted to one loan to one user per copy of the work held by the library and will be for a limited period only. Digital Rights Management will be an important factor and obligations around DRM will need to be defined in secondary legislation. Publishers will have a significant role in ensuring that digital content is secure.

(Download Ofcom duties as a PDF)

What is our ambition? We want to ensure the strength of the country’s communications infrastructure and safeguard Britain’s important public service content, through making limited, technical but essential enhancements to the way Ofcom takes decisions. Through the changes:

• We want to make sure that, when Ofcom acts to further the interests of citizens and consumers, they consider the needs for investment in infrastructure and in UK public service media content.
• We also aim to do this by creating a requirement for a biennial communications infrastructure “health check” by Ofcom, and to widen Ofcom’s existing review and reporting obligations to include the content provided for under its new content duty.

What are Ofcom’s Duties?

Ofcom is the independent regulator of the communications sector. What Ofcom must and can do and how they should do it is set out in legislation, including the Communications Act 2003 and the Wireless Telegraphy Act 2006. It regulates the TV and radio sectors, fixed line telecoms and mobiles, plus the airwaves over which wireless devices operate.

The general duties in section 3 of the Communications Act 2003 are the matters that Ofcom must balance when considering what decision to make in any case. The “principal duty” in section 3 requires Ofcom when carrying out their functions to further the interests of citizens in relation to communications matters and to further the interests of consumers in relevant markets, where appropriate by promoting competition.

What are the changes?

This legislation will require Ofcom when performing the principal duty as described above to have particular regard in all cases to the need to promote appropriate levels of investment in both communications infrastructure and public service media content. That investment must be efficient wherever possible.

How will this affect Ofcom’s decision-making?

The new responsibilities are not new principal duties – but they are important qualifiers to Ofcom’s principal duty, to fine-tune Ofcom’s approach to decisions involving these kinds of investment.

Amending Ofcom’s present duty to have regard to investment in infrastructure would allow Ofcom to consider investment more explicitly, for example as part of its impact assessments. Ofcom would consider the impact of decisions on investment alongside the promotion of competition.

Ofcom will therefore, when making each of its decisions, need to consider whether promoting competition is the appropriate means of furthering consumers’ interests, bearing in mind the need to promote investment. For the most part we would expect those two considerations to be complementary rather than in conflict.

However, this will not overrule or remove Ofcom’s duty to promote competition. As at present, where Ofcom find any of their general duties to be in conflict with one another they will be expected to resolve the conflict.

Why are the changes needed?

The enhancements recognise the specific importance of investment in electronic communications networks and public service media content. We are at a time when many of our communications networks are being substantively upgraded – digital television, digital radio, high speed broadband, next generation mobile. This facilitates audiences’ access to all kinds of media content from all around the world but at the same time threatens the economics of the production of UK public service content that has delivered significant social and economic value.

Just as we need to promote investment in the transport infrastructure, or networks that carry our electricity, water or gas, we should promote investment in our communications networks. The UK increasingly relies on having a world class communications network for every part of our lives – for healthy and effective businesses, citizens, children and government. So the strength of the infrastructure over which all those electronic communications pass is critical to the social and economic wellbeing of the UK.

The production of UK public service media content, such as current affairs and high end drama, is severely challenged by shifting advertising revenues. This leads to a reduction in investment in this type of content which does not generate a high return rate in the short term although it brings considerable benefits for the UK. Plurality of public service content contributes to a well-informed society, represents the UK’s cultural diversity and the quality it provides drives the entire market up, contributing to the UK’s world leading role in content and format exports. We need to ensure that in the face of difficult and quickly changing market conditions Ofcom has a clear and explicit responsibility to consider the promotion of investment in public service content.

We believe these clauses will…

• Require Ofcom to consider investment more explicitly;
• Increase Ofcom’s strategic focus on investment., including which issues Ofcom prioritises through its annual planning process;
• Provide Government, industry and consumers with a clear indication of the state of the health of the communications infrastructure;
• Help sustain healthy competition in the content production sector to drive innovation and quality and retain plurality;
• Help address the fall in investment in UK public service content to ensure a variety of outlets for the independent production sector

These clauses will not…

• Detract from Ofcom’s proper focus on the interests of citizens and consumers, and competition.
• Place undue burdens on businesses. Ofcom already has a duty to keep any requests on businesses to the minimum necessary to carry out the function, and will consult on the matters to be covered in their report on communications infrastructure.
• Simply apply to any online content with a public service objective – Ofcom will not be charged with reviewing the whole of the internet, but only specific web services meeting specific public service definitions.
• Impact on freedom of speech online – the clause does not give Ofcom any new powers to regulate broadcasters or other content providers. For example, Ofcom will not have new powers to extend the scope of the impartiality requirements currently applying only to television and radio services.

Technical Questions:

Why should investment only be ‘efficient wherever possible’?

• “Efficient investment” means in our view that the investment is made in such a way that produces the maximum possible benefit to the economy, whilst minimising any negative economic effects. The inclusion of the words “wherever possible” is required in recognition that there might be occasions when investment that is not economically efficient in this way is nonetheless very much in the social interests of citizens or consumers. For example exceptions may be necessary regarding investment in public service broadcasting, which despite significant social benefits may not always be efficient; equally, however, there should be no exception made in cases where efficiency is to be expected.

What is ‘public service media content’?

• The Bill defines public service media content as “material, other than advertisements, which is included in media services and which Ofcom consider contributes or may contribute towards the fulfilment of the public service objectives”. “Public service objectives” are in turn defined in the Communications Act – we are simply adapting this definition of ‘public service content’ to the digital age. Where the clauses apply to internet services, these must be available to members of the public in all or part of the UK, where editorial control is exercised over the material included in the service (and therefore not services like Skype or Amazon).

What is an ‘appropriate’ level of investment in public service content?

• The “appropriate” level of investment is intentionally left to Ofcom to determine. Ofcom requires flexibility in performing its duties – what is appropriate may vary over time depending on market conditions (in particular depending on consumers’ expectations and behaviours).

Is the clause a requirement on the BBC to increase its investment in purely online material?

• The BBC’s online investment and its impact on the rest of the market are essentially matters for the BBC Trust, The Trust has recognised concerns over the scale and growth of BBC online operations and this will be part of the Strategy review the Trust and the BBC have agreed should be undertaken.

How much information will communications companies have to supply?

• We are aware of the burdens that constant requests for information can place on businesses. Much of the information that Ofcom needs to compile the reports will be information that they have or gather anyway in the course of their regulatory duties. Where this is not the case and they have to seek additional information they will be bound by existing provisions in the Communications Act that require them to keep those requests to the minimum required to prepare the reports. Ofcom have committed to consult further on the detailed information requirement prior to the first report.

It’s been a busy ten days since our last post, and we thought this would be a good opportunity for a final update before 2010.

The main thing that has been keeping us busy has been preparation for Committee – we now have dates for four days in Committee.

As is the custom with Bills, we’ve been receiving a series of amendments from peers who want to hear more about the Government’s thinking behind the Bill. We received 94 new amendments last night, bringing us to a total of 237. The amendments tabled thus far are here; more information about amendments can be found here.

Parliamentary Recess having now officially begun, we’ll be back in the New Year with more updates. Until then, season’s greetings or, as they say across the pond, “Happy holidays!”

As mentioned, last week the Bill was read for a second time in the House of Lords – see the Hansard record for the full transcript here.

And now without further ado, we’re pressing on to the next stage – the first Committee session is scheduled for the 6th of January, as a Committee of the Whole House. For more about how Committee Stage works, please see Parliament’s guide here.

A quick update (we’re all hard at work this end) – the Bill’s Second Reading debate in the House of Lords will take place on Wednesday, currently scheduled to start at around 3.30 pm.

For those unfamiliar with Parliamentary procedures, more information about Second Reading debates can be found here. (And for the especially interested, the debate will be live on Parliament TV.)

For recent coverage of the Parliamentary passage of the Bill, you might be interested in the coverage of last week’s debates on the Queen’s Speech in the House of Lords (video | Hansard).

We’ll be back with more after Second Reading.

(Update:  Bill now read for a second time in the House of Lords – ‘a wide-ranging discussion was held’, as they say in Parliament. The Hansard record of the debate is up on the Parliament website here.)

Hi! This is an update from the Digital Economy Bill team. On Wednesday, the Queen’s Speech confirmed that the Digital Economy Bill will be part of the Government’s programme for this session of Parliament – the one that takes us to the next General Election.

Today, the Bill is published. It is made up of the actions in the Digital Britain Final Report that need primary legislation. That means it covers a really wide range of areas – from digital radio, to copyright reform, to spectrum, and then some – all focused on supporting the nation’s digital future. But it doesn’t deal with those things that didn’t need primary legislation, such as broadband and local newspapers. And, it doesn’t deal with the Next Generation Levy, which will be in the Finance Bill 2010.

Stephen Timms introduces the Bill (Biography)

We think the Bill does some really important things, helping businesses and consumers to make the most of the ‘digital economy’ – the creative industries, digital communications, and public service broadcasting. We want people to understand the Bill. Understandably there will be a wide range of views – and we’ve certainly had some lively responses to our consultations on some of the issues. There has already been a lot of debate over what the Bill – it’s more than just unlawful file sharing and regional news. So how can we answer your questions on the Bill? We’d suggest, as a first port of call, the factsheets we’ve written to explain the key points on each area.

We’re looking forward to Parliament’s debates and discussions around the Bill. We hope you’ll find this a useful resource – and if we can help, please leave a comment.