§ Mr. Thurnham
To ask the Secretary of State for Trade and Industry whether it has yet been decided what action is needed to implement the Monopolies and Mergers Commission's report on the collective licensing of public performance and broadcasting rights in sound recordings; and whether he intends to propose any changes to the legal basis for copyright protection of foreign sound recordings in the United Kingdom to the criterion known as first fixation.
§ Mr. Redwood
The Home Secretary and I have now completed our consideration of these matters. We have decided that the recommendations of the commission should be implemented as set out in the report, with only minor modifications, but that there should be no switch from the criterion known as "first publication" as the basis for protecting foreign sound recordings in the United Kingdom.
As to the commission's recommendations, we intend to include provisions in the Broadcasting Bill to introduce the system of statutory copyright licensing put forward in paragraphs 7.49(a)(ii) to paragraphs 7.49(a)(viii) of the report in respect of the broadcasting of collectively licensed sound recordings. The system will also apply to use of such recordings by cable programme providers. The effect will be that where such users cannot reach agreement with a collective licensing body for the use of its repertoire of sound recordings, they will be able to have recourse to 230W a statutory licence, initially on the basis of self-assessed royalties, pending a copyright tribunal order on the level of remuneration. The tribunal will be empowered to require a user who had paid an unreasonably low interim royalty to pay the costs of both parties before the tribunal, and will be required to make its order retrospective to the date on which the statutory licence was exercised.
The user will have to comply with a code of conduct notified by the licensing body and to supply that body with such information as it may reasonably require, but will be able to refer disputes over such matters to the tribunal.
A statutory licence will not be available (a) in respect of the unexpired period of any relevant licence which the user may hold, or (b) where licences are available on terms which have been ordered by the tribunal, except where the user seeks a greater number of hours of use than is permitted under such licences. In that event the statutory licence will be available for the full extent of the repertoire being sought.
Corresponding provisions will be introduced in respect of the public performance of sound recordings when a suitable legislative opportunity arises.
On the Commission's recommendations regarding the copyright tribunal (recommendations (ix) to (xiv) of paragraph 7.49(a) of the report) the Government consider that improvements already effected by means of the Copyright, Designs and Patents Act 1988 and the Copyright Tribunal Rules should be sufficient and no further changes are currently planned.
In paragraph 7.38 of its report the commission recommended that all performers participating in a recording should receive equitable remuneration directly paid by PPL, for that recording's use in broadcasting or public preformance. It did not, however, make any recommendation as to whether this should be made a statutory requirement or achieved on a voluntary basis. PPL has indicated its willingness, with the co-operation of the Musicians Union and any others concerned, to implement the recommendation as fully as may be practicable. The Government therefore intend to seek voluntary undertakings to this effect rather than to introduce what would necessarily be complex statutory provisions.
The commission further recommended that PPL should abandon its practice of limiting the number of broadcasting hours, or "needletime", for which recordings from its repertoire might be used and also its requirement that musicians be employed for certain public performances. I understand that PPL has now abandoned both practices. The proposed statutory licence procedure will prevent PPL from reimposing needletime restrictions and we do not therefore intend to introduce any separate statutory provisions to this end. As to the musicians' employment requirement, I intend to ask PPL for a voluntary undertaking that the practice will not be reintroduced.
On "first fixation", the Government have been considering the findings of a study commissioned from National Economic Research Associates to establish the effects of providing copyright protection for foreign sound recordings in the United Kindom on the basis of the country in which the recording was first made instead of, as now, the country where it was first published. NERA's report will be published by HMSO on 20 December. The report forecasts that the loss of revenue to PPL (and the corresponding financial gains to radio and public 231W performance users of sound recordings) would in the long term amount to around £9 million a year or nearly half PPL's current income. NERA does not, however, consider that the change would increase radio stations' efficiency or significantly promote the growth of radio, and they identify a number of disbenefits, not only to the record industry, but to consumers and to the efficient allocation of economic resources. The Government have concluded that, on balance, the findings of the NERA study do not justify a departure from present practice.