My Lords, in moving Amendment 73 I wish to speak also to Amendment 235. It has been a longish road towards Clause 29. I seem to remember putting down an amendment similar to this clause on two previous occasions when we had considerable debate about its merits. I am delighted that Clause 29 has finally, after much debate and discussion within government and outside, seen the light of day. I welcome the Government’s saying that they are seeking to implement repeal soon. However, there is considerable concern that they may attempt to delay effective repeal through transitional arrangements for up to two years. There is a very strong view within the television industry that Section 73 should be repealed as soon as possible in order to provide certainty for PSBs and to ensure that investment by public service broadcasters in UK content is protected.
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Public service broadcasters invest around £2.5 billion per year in programming, the vast majority of which is original UK content. That investment is key to the delivery of UK-originated public service content to UK audiences and to sustaining the UK’s position as the world’s second-largest TV programme exporter. Section 73 is causing considerable harm to broadcasters in the wider creative economy by providing an unintended loophole that enables companies such as TVCatchup and FilmOn to live-stream the content of PSBs and other channels online without permission. Those companies then monetise content by placing their own advertising around it, directing funds away from PSBs and from further investment in the UK’s creative economy. That directly impacts on the ability of public service broadcasters to generate legitimate commercial revenues and reinvest in the wider creative economy, while also harming the rights of independent producers who own the content. I am very much in sympathy
with the amendment tabled by the noble Lord, Lord Stevenson, which in a sense attempts to capture some of that additional revenue.
As noble Lords have debated on a number of occasions, the impact of current legislation is such that it is specifically the main public service channels, which together command the largest proportion of investment in original UK content, that are allowed to be streamed by online services without permission. I am glad that the Government have finally recognised the issue. They say that the repeal of Section 73 will also have the beneficial effect of closing the loophole used by the providers of internet-based, live-streaming services of broadcast television programmes. Of course, Section 73 was originally introduced to encourage the rollout of cable, and the Government clearly recognise that the original policy objective was met and is no longer appropriate.
The issue of cable in the UK is also extremely important. There is absolutely no justification for overriding public service broadcaster copyright to confer an advantage on one of the world’s largest cable operators. Indeed, I understand that the European Commission has launched infraction proceedings against the UK Government on the basis that Section 73 denies PSBs their intellectual property rights in their content, which are guaranteed under the 2001 copyright directive. I welcome many aspects of the Government’s approach in this respect, including their recognising that it should be possible for the PSBs to come to an arrangement for carriage of their content.
At Second Reading the noble Lord, Lord Ashton, said:
“As regards the remuneration issue from the abolition of Section 73, the Government are not seeking to set any retransmission fee arrangements”.
That is certainly movement on the Government’s part, which we very much welcome. As the noble Lord said:
“These will be negotiated in the context of the existing ‘must offer/must carry’ regulatory framework. This will mean there is likely to be some, albeit limited, value extracted in any future negotiations between public service broadcasters and Virgin Media”.
My noble friend Lord Foster teased out further clarification of the Government’s position from the Minister, when he reminded him that the Government had said they expected that,
“there will continue to be no net payments between all platform operators and the PSBs”.
The Minister replied:
“We think it should be left to the market to decide that”.—[Official Report, 13/12/2016; col. 1229.]
Again, that is progress, which we very much welcome.
The big question is, therefore: do we really need transitional arrangements? We on these Benches see absolutely no need for transitional arrangements of that kind. The Government talk about additional burdens with regard to adapting to new requirements. The IP consultation on transitional arrangements, which took two years, has closed, but transitional arrangements are completely unnecessary. The public service broadcasters already have a number of contractual arrangements for channel carriage in place with Virgin, parts of which can form a starting point for contractual discussions regarding the PSB channels. PSBs already
buy the rights for retransmission of their PSB channels on the “traditional” cable platform, so there should be no difficulties with the other underlying rights-holders. Both sides have had plenty of time to prepare for a negotiation. Delay will simply increase the loss to the UK’s PSB system. As we in this House know, the issue has been in discussion for many years; I think the PSBs first wrote to the Intellectual Property Office in 2008 to ask for the repeal of Section 73. We have spent a huge amount of time discussing it, but the industry has also spent time and money in litigation since then. We know that TVCatchup has made rather a lot of money on the back of PSB content during that period.
Repealing Section 73 as soon as possible will give PSBs the certainty to continue to invest. That is the tenor of this amendment, and I very much hope that the Government will accept it and repeal Section 73 without delay, so that the beneficial consequences I have outlined will occur. I beg to move.