Copyright (New Technologies) Amendment Bill

There are five issues I want to consider in Part 1, which deals with a number of very important matters. The first issue will be the meaning of the term “communication work”, the second issue will be the position of persons known as “educational resource suppliers”, the third issue will be the parallel importation of films, the fourth issue will be the position of Internet service providers, and the fifth issue is known as the “section 88” issue. Earlier in the day the Minister very kindly provided me with the Supplementary Order Paper on which she has set out the amendments she proposes. What I will do, as I go through the various issues I wish to discuss, is touch on the amendments that she wishes to make.

The first issue is the new definition of “communication work”. I refer back to my first reading speech in which I talked about the development of the Copyright Act since the first Statute of Anne in 1712. The first type of work that was protected was literary work, and over the years different types of works have been given protection; for example, dramatic works, musical works, film, and, most recently—many years ago, actually—the introduction of provisions to deal with protection of broadcasts and cable programmes.

In a sense this bill is very important because it tries to pick up terminology that is appropriate to the Internet age. When the Copyright Act 1994 was passed it was either the dawn of the Internet or just before it, and, of course, in the 14 years since, the Internet has become established as a fundamental part of the way we all do business. So the issue the Commerce Committee was faced with was to try to look for a term that would be—[Interruption]

The CHAIRPERSON (H V Ross Robertson): Would the member who has a cellphone on please turn it off.

I will go back to the dawn of the Internet age and simply say that the aim—and it is a perfectly reasonable thing to do—has been to find a term that is technology-neutral, because, as far as possible, copyright needs to be expressed in broad terms, to take into account the march of technology. That is what has happened here. It is proposed that the terms “broadcast” and “cable programmes” will be deleted, and throughout the Copyright Act there will be reference to the new term, “communication work”. The verb “to communicate” is also defined. I have never been totally convinced that the move to this particular terminology is necessarily the best move, but I have to advise the Committee that National will not oppose this change. It is one of the many matters that will need to be looked at again when there is, hopefully, a full review of copyright law in a few years’ time.

The concern I have had—and I acknowledge that the Supplementary Order Paper tries to address this issue—is what appears to be the creation of a new property right to reward the making available of a work. Under the previous law, and for various categories of copyright work, some level of creative activity was required before copyright protection could be conferred. As I said, I think the Supplementary Order Paper tries to address this issue by deleting the phrase “making available by a communication technology”, so that “communication work” will now mean the transmission of sounds, visual images, or other information. If the changes introduced by the Minister’s Supplementary Order Paper address my concern, then so much the better, but I just have my doubts about whether it will.

I would point out one other minor point on this issue to the Minister. I do not know whether the Supplementary Order Paper actually changes the meaning of the word “communicate”, which will still mean “to transmit or make available by means of a communication technology”, and for good order and consistency perhaps that needs to be altered, as well.

The second issue I wish to discuss concerns the new definition of “educational resource supplier”, and perhaps the best way of dealing with this issue is to talk about section 48 of the Copyright Act, which provides the educational exemption in relation to certain categories of work—in this case, broadcasts and cable programmes. As I said, when the amendments are passed, we will be dealing with recording by educational establishments of communication works. Clause 28 will change section 48 to provide for that, but it also introduces this additional term of providing some protection for educational resource suppliers as well as for educational establishments. This was a matter that I do not think was looked at by the Commerce Committee, but I can say that the National Party understands why the Minister is seeking this amendment through her Supplementary Order Paper and we will support that; it seems to make perfect sense.

So, moving along then, I come to the next issue, which is that of parallel importation. This is a rather important one. Section 35 of the Copyright Act deals with the issue of secondary infringement of copyright, and one way in which one can infringe copyright is by importation. So, for example, if one brings in a film, that can be called parallel importation and can attract copyright infringement.

Clause 18(2), as amended by the Minister’s Supplementary Order Paper, attempts to amend section 35 so that there will be infringement of copyright in a film to which subsection (6) applies—that is, the existing subsection (6)—if a person imports a copy of a film into New Zealand within 9 months of its first being made available to the public, and knows that the film is imported into New Zealand and is being made available to the public; if the person seeking to import the film is not the licensee of the copyright in New Zealand; and if that person imports the film into New Zealand other than for that person’s private and domestic use. That is the proposal that has been put forward in the Minister’s Supplementary Order Paper. The National party understands that and will support it. Section 35(6)(b) of the principal Act refers to films that are “produced principally for the cinematic release, or copy of that film,”, so that is the category of work one is dealing with. So that matter can be resolved satisfactorily.

The next issue is a very important one and was the subject, as I understand it, of extensive submissions to the Commerce Committee and of extensive debate in that committee. It concerns the position of Internet service providers. I am referring to the amendments contained in clause 53 of the bill.

Perhaps a little background is required, and I hope that people do not think I am going on and on. But the point is that there needs to be the provision of what are often referred to as Internet service provider safe harbours. Some jurisdictions have made it plain that safe harbours for Internet service providers were meant to ensure that development of Internet-based business would not necessarily be chilled by the threat of liability for copyright infringement; it was done in various ways in the United States, for example, prior to the implementation in 1988 of the equivalent US statute. Case law had established a number of broad principles confirming Internet service providers’ immunity from secondary forms of copyright infringement, and I think that the same applied basically to the European Union commerce directive.

We have taken a slightly different route from other jurisdictions. It seems to me that the new regime, created by clause 53, has created a new statutory tort, and that is quite a different way of dealing with the issue. In the United States, Australia, and the European Union, equivalent provisions limit the scope of liability. In contrast, what we have here—and I refer particularly to new section 92C(2), inserted by clause 53—is a provision stating that the Internet service provider does not infringe copyright in the work by storing the material unless certain things occur, which are set out in the bill.

Again, I do not know whether this is necessarily the right model, but the National Party has had a good close look at it. We will not oppose what the department has come up with for the purpose of this bill. I still do not think that new subsection 92C(4), in clause 53, is required. It seems to preserve the right of the copyright owner to seek injunctive relief against the Internet service provider. In my opinion—and I have always maintained that this is largely redundant—there is no need for this provision if the Internet service provider is already to be liable for copyright infringement.

So that is the regime that has been established. I have my doubts as to whether it is the right regime but we will go along with it.

There have been a number of amendments. The Minister knows, and I certainly know, that we have all had approaches from various commercial entities, as a result of which the Minister has come up with a number of amendments. We will support those. The first makes some changes to new section 92A, and I need not go into that in any great detail. We support what is being done there. Essentially, it is putting back into place what had been there before the bill went to the select committee.

The second issue concerns section 92C, where there is to be the addition of new subsection (2A) about the sorts of things that a court may take into account when determining whether there will be liability for the Internet service provider. I think that that amounts to an improvement over what the select committee said, so we will support that. The third issue concerns the requirements of the notice of infringement, in section 92CA, and I think those changes are fine. The amendment means that a notice to be served must—“(a) contain the information prescribed by regulations made under this Act;”—and of course that has not yet happened—“and (b) be signed by the copyright owner …”. So we can understand that those improvements will be desirable.

We also agree that section 92CB should be deleted, because I always thought that it was rather heavy-handed and went too far. So they are the changes for Internet service providers, and I can advise the minister that we will support her Supplementary Order Paper because we think those changes are quite helpful.

The final issue I want to touch on—and I know that Mr Copeland will wish to speak about this—concerns section 88 of the Copyright Act, which deals with the reception and transmission of broadcast in a cable service programme. There are three positions before the Committee. The first, as I understand it, is the Government’s position, which is to repeal section 88 in its entirety. The second, as evidenced by the majority of the select committee, is to keep section 88 as it is at least until there can be a full review of the Act. The third is Mr Copeland’s amendment, which deals with cable television operators’ right to rebroadcast free-to-air television. As I understand it, Mr Copeland’s amendment seeks to extend section 88 to satellite broadcasters like Sky.

National supports the status quo and believes that the various operators can probably come to a commercial arrangement once their existing contracts expire in a couple of years, so I do not think that we are too happy with that amendment, and we will not be supporting it. I know that the amendments proposed in the Minister’s Supplementary Order Paper are of a technical nature, but I think that they improve the legislation, and that is why the National Party will support them. I have a couple of things to say about various aspects of Part 2, and I thank you, Mr Chairman, for the opportunity to have one call on these issues. I will leave it there.

I want to speak exclusively to clause 49 in Part 1, which, as Chris Finlayson has mentioned, is all to do with the new provision in section 88 of the Copyright Act. The Commerce Committee has, by a majority, reinstated section 88 of the Copyright Act 1994 and, as I read the Minister Judith Tizard’s amendment on Supplementary Order Paper 193, I see that the Government may now also have come to that position. I am sure the Minister will take a call to clarify that matter for me if I am wrong.

As Mr Finlayson said, the amendment in clause 49 is to reinstate the existing position—to allow the reception and retransmission of broadcast in a cable programme service. However, to do that it was necessary to add new subsection (4) in order to preserve a number of technologically specific terms from the 1994 Act that will not be used elsewhere when the Act has been amended.

My Supplementary Order Paper 154 will amend section 88 to allow the recommunication of free-to-air television and other kinds of unencrypted communication works to include broadcast by satellite in addition to cable. In other words, it is simply to modernise the provisions of section 88 to take into account the technological upgrades and improvements from cable to satellite that have occurred since 1994.

I must say that I am very surprised to hear the announcement tonight for the first time that National members will not be supporting my Supplementary Order Paper. I guess that it just reinforces again that in some areas they are not a very progressive outfit, because everyone in this Chamber but they would probably know that satellite communication is the mode now used for pay-as-you-view television, which was formerly exclusively on cable in 1994. I think that for National members to just say that they do not agree with my amendment without giving any rationale is typically weak in the extreme.

My amendment will do the following things. First of all, it is consistent with the Government’s aim of encouraging the uptake of digital television. It will facilitate the recommunication of free-to-air television on digital, satellite, and other means. It is also consistent with the Government’s aim of making publicly funded programmes shown on free-to-air television channels as widely available as possible. I wonder, as a point of diversion, whether those running the new TVNZ 7, which commenced broadcasting on Sunday with The Kingmaker Debate, will find it very strange that the audience for that will be very limited because people have not yet got the right box to put on their TV sets to see that programme. I cannot see how that could possibly be consistent with the Government’s aim of making television in New Zealand as widely available as possible. Obviously, if it is to be made as widely available as possible, then it should be able to get into as many homes as possible. That is what is happening under the present arrangements, as free-to-air programmes are rebroadcast over, say, the Sky network, or by TelstraClear and domain streaming on the Internet, so that as many people as possible can see those programmes.

My amendment is also consistent with improving the coverage of free-to-air television, as digital satellite recommunications in particular are able to reach into areas where traditional terrestrial communication is very difficult. That particularly applies to a number of areas in New Zealand. I think of Northland, where the majority of people living there are Māori. At the moment they get their TV, be it Television New Zealand (TVNZ) or TV3, through the Sky platform. Potentially this bill, which is old-fashioned and is limited to cable only, will bring that to an end. The existing provision for copyright holders to establish licensing schemes for recommunication will also be retained.

Those are the bare bones of my amendment. It does not, as some have claimed, require TVNZ to provide free retransmission of a programme to, say, Sky or TelstraClear, although, of course, TVNZ is perfectly free to do so. TVNZ has a commercial incentive to do so, as, by enlarging its viewer audience, at the same time as it boosts its ratings it boosts its advertising revenue, which—as its representatives confirmed to the select committee—flows directly from its ratings. Therefore, the larger the audience is, the larger the bill, and the larger the advertising revenue will be. So TVNZ already has a very significant commercial imperative from which it would want to drive this.

TVNZ programmes continue, by the way, to be rebroadcast in their entirety; it is not as if TVNZ or TV3 lose the ownership of those programmes. Every part of a programme, including all the advertising associated with it, is rebroadcast. It is all rebroadcast in its entirety and the ownership of that programme and all the advertising and advertising revenue from it continues to belong to the originator of the programme, be it TVNZ or TV3.

So it is quite wrong to say that my Supplementary Order Paper will compel channels to provide those programmes free of cost or even compel them to provide them under certain conditions. It will not. Rather, channels are able to establish a licensing scheme for the recommunication of their works. The licensing scheme will cover retransmission. Therefore, any person wishing to retransmit will have to do so by the terms of that scheme and will have to pay any fee prescribed. That is just normal, straightforward copyright law. All the statutory provisions needed for such licensing schemes are already provided in the Copyright Act. They allow the copyright owner or any person acting as agent for the copyright owner to establish a scheme, tariff, or other arrangement for the licensing of copyright works. This scheme simply has to set out the situations in which the operator of the scheme is willing to grant copyright licences and the terms on which copyright licences will be granted in those situations. To provide some oversight, terms of proposed operating licence schemes can be referred by the operator or a prospective licensee to the Copyright Tribunal for review. The tribunal would consider whether the scheme and its conditions were reasonable. A person who has been refused a licence under a licensing scheme may also refer the matter to the Copyright Tribunal.

I trust that that further information will assist to clarify the situation. Clearly, if TVNZ or any other free-to-air broadcaster should establish such a licensing scheme, then copyright is fully protected. I suspect that TVNZ, not to mention perhaps Mr Finlayson and the National Party, has not actually grasped that central reality, although I am very surprised at Mr Finlayson’s comments, because until very recently I was assured that National did grasp that reality and would, therefore, be supporting my Supplementary Order Paper. But, not for the first time in my experience, those members have suddenly decided today to do something rather different.

Just to be clear about the matter, if we refer to my Supplementary Order Paper 154, we see that subsection (3) of the proposed section 88 specifically states: “This section does not apply if or to the extent that licences authorising the reception and immediate recommunication of a communication work and any work included in the communication work are available to the person under a licensing scheme and the person carrying out the recommunication knew that fact.”

I say in simple terms that I know of no reason why my Supplementary Order Paper would not be acceptable to the entire television industry in New Zealand. It is an attenuation of a normal process, and I have yet to fathom or obtain any reason for, or explanation of, why it should not happen. Sadly, sometimes this Committee in its haste or maybe even for political reasons tends to miss the point. I think I am likely to find when the vote is taken on my Supplementary Order Paper that that situation sadly applies tonight in relation to this particular matter. Thank you.

Kia ora, Mr Chair. I take the opportunity to take this call in the Committee stage of the Copyright (New Technologies) Amendment Bill. There was one particular area that as a member of the Commerce Committee I took interest in, which was the provisions relating to educational establishments, how libraries could be using that material for the use of students, and how those issues were formulated.

Before I talk about that I just want to recapture some of the intentions surrounding the bill. Of course, the bill is amending the Copyright Act 1994 and promotes a legal framework that guides the protection and use of copyright material. Obviously, that is of major interest within Māoridom at this point in time, which is watching very carefully how those protections may proceed in the future. The bill is part of a wider reform process to ensure that our intellectual property legislation is up to date, relevant, and takes account of international developments. It will also ensure the effective operation of the Copyright Act in the face of emerging technologies.

The bill creates a more flexible framework for technology to operate in the Copyright Act by redefining certain terms contained in the Act to make them more technologically neutral. The main provisions of the bill address concerns regarding the scope of the definition of copying; give a copyright owner a technology-neutral right to control distribution, including email, peer-to-peer, and other digital forms of communications; and introduce a definition of Internet service provider. There is also a range of provisions that limit Internet service provider liability for copyright infringement in appropriate circumstances. Therefore, it clarifies and amends the exceptions to copyright owners’ inclusive rights, particularly in relation to fair dealing, library, archival, educational use, and time shifting; updates the technologically specific language currently used; and introduces the communication right for performers so they can maintain a fair commercial return.

I thought it was important just to revisit some of the values and principles surrounding the intention of the bill. I now move to the issue I raised earlier, in terms of the new provisions relating to educational establishments. The Act provides a number of specific exemptions under certain sections for educational establishments to copy works. These provisions are currently written in technologically neutral terms and allow the permitted activities to be undertaken by digital means. Clause 24 of the bill, amending section 44, is designed to clarify the conditions under which an educational establishment can supply copies of works in a digital form, including restricted remote access via the Internet to authorised students, with supply of copies consequent to the permitted copying. Clause 25 adds a new section 44A to enable educational establishments to basically store websites electronically for educational purposes for a limited period of time, linked to the duration of a period of time for which they are relevant to the teaching of the relevant course. This exemption would enable access to Internet material that is subsequently changed or deleted and has ongoing significance for teaching purposes but the exemption would be subject to the adequate identification of the material and the course for which it is stored.

The select committee amendment under clause 24 clarifies that copies of works in digital format made under section 44 can “be communicated to a person who is a student or other person who is to receive, … or has received, a lesson that relates to the work.” Ideally, under clause 25, it also clarifies the conditions under which an educational establishment would be allowed to store pages from a website under the new section 44A. In particular, the section was amended to make the requirement to identify the author dependent on the author’s identity being known. Often, the authorship of works available on the Internet is unidentifiable. Therefore, requiring authors to be identified in every case is unrealistic. Clause 25 is also amended by deleting in section 44A(1)(b)(iv) the requirement that an educational establishment must identify “the course of instruction for which material is stored;”. Such a requirement was identified by the committee as being impractical, given that the website material copied may be stored for use in many courses.

Issues raised with the new educational establishment provisions are that copyright owners would like to see clause 24, amending section 44, to add new limitations on the ability of educational establishments to copy material for educational purposes. For example, they consider that section 44 should not permit the whole of a work to be copied for educational purposes. That is quite important, because if that is the case, then under any circumstances without a licence—furthermore, where part of a work is permitted to be copied—the portions of the work that may be copied for educational purposes under this exemption should be further limited. In effect, copyright owners would like schools to pay more for using works protected by copyright. That was the issue raised by some of the submitters. Conversely, educational establishments would like to see the scope of section 44 expanded by removing some or all of the existing restrictions under which a work may be copied for educational purposes without a licence from copyright owners. In effect, schools would like to pay less for using copyright material.

Quite frankly, the response in relation to the aim of the bill was not to review or change the existing balance between the rights of copyright owners and access for educational establishments; rather, it was to ensure that this balance is maintained in a digital environment. I thought it was important just to revisit again that issue, because it is important that we do not lock up our libraries and institutions into having to reduce the amount of information they can rely on to provide for our students. Kia ora.

I was not on the select committee when the submissions were being heard—I was not even a member of Parliament at the time—so my knowledge of the select committee process is non-existent. But I have taken the opportunity of reading the second reading speeches, which have been very, very helpful. I must also thank Mr Finlayson for his very detailed, helpful, and informative viewpoint on the Copyright (New Technologies) Amendment Bill itself and on Supplementary Order Paper 193.

New Zealand First wants to make sure that it keeps up with technology. Someone was not sure whether the Internet had come into existence in 1994. I think in 1994 we were probably all still using Commodore 64s and just moving to using more updated IBM computers and suchlike. There has been a remarkable explosion of technology in the last 13 or 14 years. Some of us have even come to grips with things like iPods of various descriptions. I am told—and after reading the second reading speeches I know—that I am even possibly committing an offence when I put a CD on to my iPod. That might not be legally allowed. Well, it is about time we had some legislation that brings matters up to date.

There has been criticism of the bill to the effect that more could have been done. That is always the case with legislation; more always can be done. But usually when we try to do more and more, the bill tends to languish in the Minister’s office for longer and longer, and nothing ever actually happens. Half a loaf is better than no bread at all. It is very interesting to read the legislation and to see how matters have been brought up to date.

The issue of the proposed amendment by Mr Copeland has been raised. New Zealand First will not be supporting Mr Copeland’s amendment. Effectively, New Zealand First will be supporting the bill as it has been reported back. We will be supporting the amendments. It all makes sense, and if I was in any doubt at all, I am not now, thanks to Mr Finlayson’s comments.

I thank members of the Committee for the very constructive approach that has been taken to what is—as Mr Dail Jones said—rather delayed legislation.

This legislation affects myriad interests of both New Zealanders and people internationally who are owners and users of copyright that may have been created or is available in New Zealand. It is a vast, three-dimensional jigsaw that has huge effects on a range of people whom we may be able to predict, but also sometimes on people whose interests are not predicted in this legislation. I think it is useful that we try to take a very non - party-political approach to this legislation, and I compliment the Committee and the select committee on the attempts that have been made to get to grips with this very technical, difficult, and conflicting legislation.

I particularly want to thank Chris Finlayson. I thought his contribution was very constructive. In the second reading of this bill he called for a full review of the Copyright Act, and I reiterate my point that because of the complexity of the issue and the vast number of people and interests involved, this legislation—this whole area—has to evolve. People’s ordinary lives, businesses, innovations, and research depend on our being predictable in this area, whatever we do.

The first issue that Chris Finlayson raised related to the new term “communication work”. The new category of “communication work” would not create protections for transmissions regardless of any creative input, because as in any other type of copyright the work is still required to be original. The current definition in the bill reported back by the select committee would extend protection to signals that carry content in interactive or on-demand communications, but that was an unintended consequence, which is addressed by Supplementary Order Paper 193. I hope that reassures Chris Finlayson on that particular issue.

My colleague Dave Hereora made a very useful contribution relating to the new area of “educational resource supplier” in Supplementary Order Paper 193, and I agree that this is akin to what we understand libraries had done in the past and will do in different ways in the future. Where there are electronic or digital communications, programmes, or creations of whatever sort, it is necessary for our schools, universities, and research institutes to have access to those. Increasingly, they are available only in digital format; they are not available in book form. One of the people who has been consulted on this legislation said that in his particular area of research anything in a book is probably 10 or 15 years out of date, anything in a magazine is probably 3 or 4 years out of date, and papers on the Internet are the only way of keeping current in his field. We have to recognise this, in terms of teaching our new curriculum and making sure that New Zealanders have access to the most recent innovations, thoughts, and projections. The new category of “educational resource supplier” makes it clear that the intermediary may be a company or an organisation that is not in the first instance what we understand to be a library.

Supplementary Order Paper 193 deals with a range of other issues, and I will deal with those more specifically. In terms of the limitations around protections for Internet service provider organisations—those that provide Internet supplies—there had to be a provision and a process whereby information that was put up on the Internet in breach of copyright law could be taken down. I recognise the Green Party’s concern. Its members were particularly concerned about the issue of the use of copyright material in fair comment and/or satire or parody. We have been very happy to give an undertaking to Nandor Tanczos, the Green spokesperson in this area, that we will conduct a review looking at what happens particularly in Australia, which has recently changed its legislation to come into line with that of the United States, I think as a result of its relatively new free-trade agreement with the US. The Australian legislation makes provision for a specific exemption for copyright infringement for the purpose of parody and satire. I understand that it follows the US law. There is currently no specific exemption in the United Kingdom, although there is a recommendation to create an exception to copyright for the purpose of caricature, parody, or pastiche, and that was made in the 2006 UK Gowers Review of Intellectual Property. The US has a more general “fair use” exception, which would probably mean that in most situations parody and fair comment would not amount to a breach of copyright. We want to look as these examples carefully, and any amendments required to implement any changes arising out of that review, which I assure members across the Chamber will be a public discussion, can be included in the next proposed amendment to the Copyright Act. As I have already indicated, this bill is one of a series as we evolve copyright, and the specific issue that so far we have agreed to include in that legislation is around the commissioning rule. I hope that that may give some reassurance to the Green Party on that issue.

The Green Party members’ concern around format shifting more generally was that they wanted to see video content included. We have made a policy decision not to do that. I think it is generally agreed across the film and video industry in New Zealand that it would prefer more protection. We recognise, as Dail Jones said, that like much of the advanced world much of New Zealand has moved on to forms of reproduction for music and/or video or films in some cases where format shifting is necessary. But we do not think it is useful to say that people may make or pass on digital copies, because of the economic damage that can so easily be done. As we saw, one unscrupulous employee of a post-production house took a copy of Sione’s Wedding. Huge economic damage can be done to film makers, who in New Zealand are pretty vulnerable; they do not have the back-up of big studios or big profits from earlier films. No matter how much we would like to believe otherwise, New Zealand film—having made an extraordinary difference to our tourism industry, for example—has not yet got the economic robustness to cope with the sort of damage that can quickly be done by the ability to transmit digital copies.

Gordon Copeland spoke about the issues around the right to replay free-to-air television, and I thank the Committee, and the select committee before it, for the consideration that has been given to that. At present it can be dealt with commercially. I am very opposed to enshrining any right to rebroadcast. I agree with Mr Copeland that as a Government and as New Zealanders we desire to see New Zealanders having the greatest access to the greatest amount of information, but I think the idea that we could enforce a commercial right over an unwilling seller would be abhorrent. So I am opposed to the extension that Gordon Copeland’s Supplementary Order Paper would give to section 88, and I recognise that this is an issue that members will have to deal with in greater detail when we get to the point where there is a clear choice about the way that free-to-air television should be rebroadcast in a digital format.

I thank members for their serious comment on this bill. We have several more parts to consider, so I will leave my comments at that. I am very happy to have a debate in this Chamber tonight on this legislation. One of the healthier things we do in the House is to deliberate when people are trying to find a way forward, rather than coming in here with predetermined views that are sometimes, as Mr Copeland bewailed, political. Of course, politics is how we do things in this House, rather than shooting each other, and I think that is a good thing.

I want to take a brief call in response to the further comments from the Associate Minister of Commerce, Judith Tizard, in relation to my Supplementary Order Paper 154, which I gave a very full—I think—and complete explanation on earlier to members. She has said that she is deeply opposed to any extension of the current section 88—namely, I guess, from cable to satellite—but without actually giving any background or rationale for her position. In that respect she is at one with Mr Finlayson, who likewise gave no rationale or explanation as to why he believes that my Supplementary Order Paper on section 88 is misplaced.

I think that is a rather disappointing standard of debate on a serious matter. The questioning that the Commerce Committee subjected Television New Zealand (TVNZ) to in relation to this issue, when it came to the select committee for its financial review, subsequent to the second reading of this bill, was quite complete and detailed. It was absolutely clear to all of us in the select committee that TVNZ was under the complete misapprehension that my Supplementary Order Paper obliged it in all circumstances to allow its programmes to be retransmitted by, say, Sky or TelstraClear for free. That was the whole objection. We pointed out that, no, TVNZ would get an extra revenue stream from it because of the higher ratings and the higher audience numbers, and both the chairman and the chief executive agreed with that. They said “That’s right, we do. We get an extra revenue stream.” We explained that the ownership of the programme remains with them at all times because it is being retransmitted only—there is no transfer of ownership, it is still theirs, and all the advertising revenue is still theirs. They agreed with that. But they had no understanding at all that my Supplementary Order Paper proposed an alternative—namely, a licensing scheme under which they would be able to charge a fee to Sky or TelstraClear. They had no understanding of that, at all.

So I am disappointed that their misunderstanding, which is factually incorrect, seems to have somehow conveyed itself to the members of both Labour and the National Party, who, on the basis of this complete misunderstanding, have said they are not going to vote for the Supplementary Order Paper, but that at some time, when they get round to it, they will look at the whole matter. What is going to change between now and the future? I have no idea. Really, I just want to say I am rather disappointed that such a superficial result has come about. There has been no justification or explanation as to why the particular view against my Supplementary Order Paper, which is sane and reasonable, has got to the point where people have decided it is not workable, and that, somehow, the issue needs to be reviewed in the future. I think that is the ultimate cop-out. We hear time after time “It is too complex. We will do it later.” No, it is not complex; it is very simple and we should be doing it now.

In response to Mr Copeland’s comments about his Supplementary Order Paper 154 I say that National members will not be supporting it because Television New Zealand (TVNZ) and the free-to-air broadcasters all have a particular business model under which they operate their businesses. Let us face it, they are commercial businesses. They are in competition with Sky, they are in a commercial battle and a war with it, and National members are pretty confident that the two parties are going to be able to reach a commercial arrangement without Government interference. That is the whole point of our not supporting Supplementary Order Paper 154.

We could take it further than that. If a person runs a business with a certain business model and wants to have control over—if it is in the broadcasting sphere—the content, that person wants to be able to say: “Look, this is my content. I am in charge of where it goes and how it is distributed.” Why on earth would it be fair for commercial rivals to be able to take that content and distribute it from their own platforms? Whatever we might say are the perceived benefits for TVNZ, TV3, et al. through that arrangement, we have to say that the content is their intellectual property and it is their right to distribute it as they see fit. We have two broad commercial groupings here. We have Sky on the one hand and the commercial free-to-air broadcasters on the other hand. It is in both of their best interests for Television One, TV2, and TV3 to be available on the Sky platform, and the heavy hand of Government regulation is not needed to make that come about. I think we can be perfectly confident that those two groupings are going to reach a commercial arrangement without the Government once again getting involved with its sticky fingers and turning this into a regulatory mess.

That is the crux of the argument. The free-to-air channels have control over whom they broadcast to and on what platforms they are carried. They should have that right and we are confident that a perfectly workable arrangement will be reached between the free-to-air broadcasters and Sky television that will enable those channels to stay there. There is a common misconception—I say to Mr Copeland—that just because something is free to air it is—

💬 Hon Judith Tizard: It’s free!

—free. No, it is actually intellectual property that is owned by the people who broadcast it. Their business model is predicated on advertising revenue and on control of their signal, and just because the content is produced and is out there does not mean someone should be able to pinch it. Take the converse argument: how would people who had a pay television model like it if suddenly the free-to-air broadcasters could pinch their signal—say, they pinched Sky Sport and put it on FreeView? There would of course be a huge hue and cry.

So I think we have to leave them to sort it out. I think it will be sorted out, and I think it would be very unlikely that Television One, TV2, and TV3 were taken off Sky, because that would not be in anyone’s interest in the long term.

In speaking on Mr Copeland’s very valid Supplementary Order Paper, I find myself in the somewhat unusual position of agreeing with the previous speaker, Dr Coleman, in terms of the concept he has put up. The logic of it—to explain it really slowly—would be that we would have a situation whereby FreeView could go in and grab Prime Television and suit itself.

In terms of a commercial model—of intellectual property—it is very obvious what the previous speaker said. Because it is “free view” and free-to-air, yes, there is a commercial model. Some of the “free view” will certainly consist of so-called public service channels and community channels. Other parts of “free view”, in the sense of the free-to-air bit, will very much consist of commercial businesses that are using FreeView as a platform but are being paid for, in terms of commercial reach, through advertising, sponsorship, and other means. They as a broadcasting business—just as with public television—should choose which platform to use. I agree with Dr Coleman in the sense that I think some of those issues will be sorted out commercially. There will be a point where appropriate arrangements are made.

I am not sure whether the previous speaker would agree with me on this, but I was reading somewhere in one of the papers about the so-called FreeView Plus model. Frankly, why should Sky or anyone else just be able to beam in from wherever and be the only pay TV model in town, subject obviously to FreeView offering the vast majority of its channels in terms of the free-to-air model?

And what do we mean by the free-to-air-model? We mean that it has either New Zealand On Air funding, etc. or advertising funding and is broadcasting appropriately. But certainly there could be a FreeView Plus model whereby FreeView might want to charge for certain products in the future. That, again, would be a degree of healthy competition between that particular consortium and Sky.

Obviously, if we look at regional television we see that we certainly want to encourage it. Stratos, for example, is now taking a range of regional television and putting it up on the platform. We certainly want to have a situation whereby those regional operators, subject to financial assistance to get up on the satellite platform or on to terrestrial television, should ultimately be able to make the choice.

For example, I was with David Bennett the other day, being interviewed by tvCentral, which covers the Waikato and the Bay of Plenty. It is based in Matamata, and it is an amazing story, dare I say it, of incredible enterprise and a lot of faith and hope. It is a regional television channel that is now providing for us in the Waikato and Bay of Plenty a genuine family-viewing product.

Quite frankly, in terms of tvCentral’s mix and its product, it ultimately, I say to Mr Copeland, should have the choice, the business choice, as to whether to negotiate with Sky and go up on that particular platform. An equivalent example would be a situation with Burger King and KFC. Burger King could come in and say it likes the product of the outfit down the road, and just grab the patent, the product, and reproduce it.

So without further ado I say that although I certainly respect the sincerity of Mr Copeland and the point of view he puts forward, we on this side of the Committee—and I think this is reflected in the Minister’s view—could not support that particular Supplementary Order Paper for the simple reason that the broadcaster itself should have the ultimate choice, relatively speaking, as to which platform to go on.

The question was put that the amendments set out on Supplementary Order Paper 193 in the name of the Hon Judith Tizard to Part 1, and the following amendment in her name to clause 36, be agreed to:

to omit from new section 56A(1)(d)(i) “and” and substitute “or”.

Amendments agreed to.

The CHAIRPERSON (Hon Clem Simich): The amendment set out on Supplementary Order Paper 154 in the name of Gordon Copeland to clause 49 is out of order because it is inconsistent with a previous decision of the Committee.

Part 1 as amended agreed to.

Part 2 Amendments to Parts 6 to 11 of Copyright Act 1994