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Lord Lyell: My Lords, my noble friend the Minister was more than helpful in his response to a similar type of amendment to which I spoke on Second Reading. I made one or two suggestions on that occasion. My noble friend made helpful comments as regards a statutory licence. I believe that my noble friend's amendment is sympathetic to that issue. I hope that my noble friend the Minister and his department can offer some help on this matter. I thank him for everything he has done to help us in the past. If he could see his way to assist my noble friend on this occasion, I would be grateful.

Lord Birkett: My Lords, I speak briefly to support the noble Lord, Lord Colwyn. I do so for two simple reasons. First, his amendment seems to me to be entirely logical and sensible and, secondly, anything which protects the interests of composers is welcome. They are a body of people who receive little consideration in the world, except the very famous. They are often left out of consideration in matters such as this Broadcasting Bill. If the Government could see their way to accepting the sensible amendment of the noble Lord, Lord Colwyn, they would do well to do so.

Lord Inglewood: My Lords, I am grateful to the noble Lords for having raised this matter. I am grateful to my noble friend Lord Colwyn, whose expertise in the music field is renowned. I am also grateful for the comments of my noble friend Lord Lyell and the noble Lord, Lord Birkett. In moving this amendment, as the noble Lord explained, he is seeking to extend the statutory licence provisions in the Broadcasting Act 1990. One of the reasons for introducing the statutory licence in 1990 was to remove what I understand are known as the needletime constraints which had previously been imposed by the owners of copyright in sound recordings. The needletime constraints had been criticised in 1988 by the Monopolies and Mergers Commission report on the Collective Licensing of Public Performance and Broadcasting Rights in Sound Recordings. That meant that licences offered by the copyright owners for the use of sound recordings in broadcasts limited the number of hours of transmissions which could include sound recordings. The MMC report had additionally recommended that a statutory copyright licence in respect of the broadcasting of collectively licensed sound recordings be introduced. Delays in agreeing satisfactory licences were causing difficulties for some of the new broadcasters wishing to start transmissions at that time. The Government were keen to remove these obstacles which had been identified by the MMC and to this end introduced the statutory licence in 1990.

The statutory licence allows broadcasters and cable programme service providers to start transmissions before copyright royalty rates for the inclusion of sound recordings have been agreed. It also removes the possibility of any needletime constraints, so that licences can no longer specify a maximum amount of needletime. I remember that I indicated during the Committee stage of the Bill, when another possible variation to the statutory licence was under consideration, that the Government still support the

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statutory licence, and I reiterate that support now. The Government are, though, currently considering whether some rather limited restrictions to the availability of the statutory licence may now be justified. Your Lordships may remember that they were then considering what is known as "muzak" and its delivery to supermarkets and that sort of establishment.

However, my noble friend's amendment is different because this seeks to broaden the statutory licence so that it covers musical works as well as sound recordings. It is quite true that broadcasters and cable programme services providers do need to obtain licences from the owners of copyright in any copyright musical works included in transmissions, as well as from the owners of copyright in sound recordings of musical works.

This is not the first time there have been suggestions that the statutory licence should therefore cover musical works as well as sound recordings. I do hope the noble Lords who have spoken to this amendment will not consider me unfair if I say that this is part of what has been an ongoing, long-running story.

The issue has been considered very recently by the Monopolies and Mergers Commission which published a report on 1st February this year on performing rights. This report concluded in relation to the extension of the statutory licence provisions to musical works. I can do no better than quote what is said in the Monopolies and Mergers Commission report:


    "We do not see an overriding case for extending the provisions further".

This conclusion of the Monopolies and Mergers Commission is one which is fully supported by the Government. As the MMC report makes absolutely clear, the special reasons relating to needletime constraints do not apply to musical works and the body, the Performing Rights Society, which the noble Lord, Lord Colwyn, referred to in his remarks, which collectively licences the rights relating to the inclusion of a musical work in a broadcast or cable programme service. It has a commercial imperative to reach an agreement on a licence. The Performing Rights Society informed the MMC inquiry that it had never refused to issue a licence given that to do so would obviously jeopardise its members' revenues.

It is, I suppose, possible that broadcasters and cable programme service providers may feel that they have been obliged to take licences from the Performing Rights Society on terms which they believe are unfavourable. However, copyright law already provides an appropriate remedy, if such is the case, in so far as a licensee or prospective licensee can refer the matter to the Copyright Tribunal for a decision. This seems to go some extent towards the mischief which my noble friend Lord Colwyn is concerned about.

The tribunal is an independent body. It is established under the Copyright, Designs and Patents Act 1988 specifically to adjudicate on matters such as this. The Government do not believe, therefore, that dissatisfaction with any licence terms offered by the Performing Rights Society provides the justification for a provision which would allow broadcasters to use musical works before the copyright royalties sought by the Performing Rights Society are paid.

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I appreciate that this will be a disappointing response to my noble friend and the other noble Lords who spoke in support of this amendment. I have to say that it is not one that the Government can support.

The Earl of Stockton: My Lords, can my noble friend say whether the Government have considered the developments that will be taking place over the next few years in the multimedia area? There will be not only conventional recordings of musical works that have been conventionally composed; there will also be a new breed of what one might call computer-generated recordings. The protection given to that is covered by the copyright protection in the computer programme and not in the product of that programme. That was a confusion that arose during the passage of the Copyright and Patents Act. I should like once again to draw to the Government's attention the fact that we need to address this issue. It is an issue that will become more and more important as we go further down the amalgamation of electronic systems.

Lord Inglewood: My Lords, with the leave of the House, perhaps I may say that my noble friend Lord Stockton has drawn to the attention of the House what is clearly an important matter. As he will know probably better than the rest of us, developments in the multi-media world are such that the traditional way in which we as legislators and as citizens have looked at a number of these matters will inevitably be changed by these new technological advances.

The point that my noble friend has raised is of considerable significance to the industry and to Britain, bearing in mind our prowess in this field. I hope that your Lordships will agree with me that the appropriate response is that we should reflect carefully on the point that my noble friend Lord Stockton has drawn to my attention.

Lord Colwyn: My Lords, when my noble friend began his remarks I felt encouraged and thought that he might accept my amendment. As he continued it became obvious that that would not be the case.

British radio has expanded enormously since the passing of the 1990 Act. The statutory licence has worked well for PPL and for the radio industry. More radio means more revenue for PPL, and record sales have increased correspondingly. It is not clear to me why a similar statutory licence cannot be arranged for PRS. That would similarly benefit the composers and publishers.

However, I shall read my noble friend's long and complicated reply and decide whether I should raise the matter again at a later stage.

Lord Inglewood: My Lords, having heard the remarks of my noble friend Lord Colwyn, perhaps the best way forward would be for me to draw his remarks to the attention of my right honourable friend the President of the Board of Trade, who has principal responsibility for these matters.

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Lord Colwyn: My Lords, I am very grateful for that additional help, and I thank the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 95 [Power of BBC to make transfer schemes relating to its transmission network]:

Lord Inglewood moved Amendment No. 212:


Page 74, line 29, leave out from ("services") to end of line 31.

The noble Lord said: My Lords, the amendment is straightforward. As your Lordships will be aware, Clause 95 of the Bill empowers the BBC to draw up a scheme to transfer certain property, rights and liabilities in order to facilitate the privatisation of its transmission network. The amendment removes the BBC's research and development work from the scope of any such transfer scheme.

The subsection was an enabling provision modelled on the similar provisions in the Broadcasting Act 1990 in relation to the Independent Broadcasting Authority's transmission services, which were successfully privatised in 1991. However, after further discussion with the BBC, we have concluded that it is unnecessary. We have agreed that the BBC needs to retain its research and development function in order to be a properly informed customer for privatised transmission services and to continue its vital contribution to the development of the BBC's services and to the wider broadcasting equipment industry in this country.

I hope that that explanation will give a clear picture of the reasons for bringing the amendment forward. I beg to move.


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