Copyright (Infringing File Sharing) Amendment Bill

on behalf of the Minister of Commerce: I move, That the Copyright (Infringing File Sharing) Amendment Bill be now read a third time. The passing of this bill marks the conclusion of a long, complex, and controversial policy debate on how to address the widespread unauthorised sharing of copyright material via the Internet. I would like to take the opportunity to highlight the key features of the new enforcement and awareness-raising measures that are created by this bill.

Copyright owners will be able to work with Internet service providers to send a series of warning notices to persons who are engaged in file sharing that infringes copyright. If an Internet account holder ignores these warnings and continues to infringe, then copyright owners will be able to take a claim to the Copyright Tribunal for an award of up to $15,000. Just as important, at all stages persons who are accused of illegal file-sharing will have the opportunity to respond to any of the allegations that are made. The regime will be low cost and it will be efficient for all parties. There is also scope in this bill to bring into force an additional enforcement measure: the suspension of an Internet account by the District Court if the notice and Copyright Tribunal processes do not provide an effective deterrent against illegal file-sharing.

These new enforcement measures provide important legal protection for our creative industries and the incentives for them to continue to create music, film, software, and other works that New Zealand consumers enjoy. The new measures are fair and balanced and will do a great deal to educate Internet users about the rights of copyright owners and the issues relating to the sharing of copyright works via the Internet.

On behalf of Simon Power, the Minister of Commerce, I thank everyone who has contributed to this bill and the policy process that led to it, including members of the Commerce Committee, parliamentary counsel, officials, members of the public, and industry representatives who have participated in the various submissions and the policy development process.

It is the Minister’s hope that through the constructive discussions that have been had across the House and through a very thorough public consultation process, this bill will provide an enduring solution to a very difficult problem. At core, this bill is about a balance of private property rights and the freedoms that people enjoy on the Internet. It provides an appropriate balance. I am very pleased to commend this bill for a third reading in this House.

I am pleased to take a call on the third reading of the Copyright (Infringing File Sharing) Amendment Bill. Again, I place on the record my thanks to the officials for the hard work that they have done during the passage of this bill. It has been a very complex bill. I think my colleague Jacinda Ardern described it as fraught. I have found it to be quite exciting and challenging, because ultimately I think it is about the future. The underlying issues are about the future and about how we use the Internet. This bill has enabled us as a Parliament to start thinking about that matter and about addressing some of those issues.

I will also place on record my thanks to the Commerce Committee—its chair, Lianne Dalziel, and the other members of the committee; all of them. It was an interesting and generally quite constructive experience to engage with the Minister of Commerce, Simon Power, on this issue and certainly to engage with the industry. To all of those people who are out there listening—I know that many hundreds, perhaps thousands, of people are watching this parliamentary debate at the moment, because I know how deeply they feel about this issue—I say that Labour supports this bill and that it supports it on the basis that there has been a negotiated solution, which is that although the suspension of Internet accounts remains in this bill, it is not enacted. That is the only basis on which we could support the bill.

Labour fundamentally believes that New Zealanders have the right to access the Internet and that all New Zealanders should be able to access the Internet. We are fundamentally opposed to Internet disconnection, and I cannot say it any more plainly than that. This compromise means that the suspension of Internet access as the ultimate penalty for repeat copyright infringement remains in the bill, but it cannot be enacted unless the Minister makes the decision to do so. The Minister making the decision would have to do so on the basis of there being a case put clearly by the rights-holders in order to prove the damage being done to the industry, and it is our opinion that such a case cannot be made in this current environment. As members know, Labour’s preferred option was to completely omit account suspension, but National’s position was intractable. Again, I will also put on record, particularly for the benefit of the Green members in this House, that Labour has been transparent and open about all of those matters right from the very beginning.

Having addressed that matter, I will say a few things about the debate that we have had tonight, because the debate has gone in a number of interesting directions. A number of matters were not discussed, unfortunately, and one of them is the costs, although I must correct myself and say that one member opposite did raise that issue. I would have liked to go into that issue a little bit more, as it goes to the regulations and to how this bill will act in practice, including what those costs will entail and who will end up paying them in order to make this regime work.

There were a number of extremely interesting submissions on this matter and a number of estimations were made on the actual cost of producing a notice that would go to a person using the Internet who was alleged to have infringed. The cost of processing and sending a notice was estimated by one of the Internet service providers as, I think, somewhere between $1 and $28 per notice. This issue needs to be continued to be examined in terms of how many notices will actually be put out there, what the costs are, and who ends up paying for that. A number of other issues need to be addressed, as well.

This debate is a positive thing in some ways, but one of the things that this debate has done is to put firmly on the agenda the thorny and frightening issue of the Trans-Pacific Partnership agreement. It has been described as a trade agreement, but it is fast becoming something much more than that and goes to the heart of issues of sovereignty. A number of speakers in the House tonight have talked about that. To quickly recap, I mentioned the fact that while this bill is passing through the House, New Zealand might have the ability to put in place its own copyright regime, only to be overtaken by something much, much bigger and much more frightening in terms of our intellectual property rights and our ability to manage our creative content. Essentially, that could be overtaken by this bill.

Labour has made statements on this matter. We have asked for more transparency and for a broadened dialogue, and we have asked the Government to make a commitment to that. So far tonight, despite repeated calls, there has been no sense of that commitment coming from the other side of the House. That is a great disappointment.

I go back to the core parts of this bill. This bill will establish a regime that deters file sharing that infringes copyright. It is hoped by many in this Chamber and, indeed, I think by all of us across this Chamber, that the intent of this bill will largely be served by the educational role of the notice and notice regime, that the point at which an alleged infringer is taken to a tribunal will be minimal, and that, essentially, if people are infringing copyright and do not know that what they are doing is illegal, which is what much of the research shows, then they will cease that behaviour once they have received the first notice or the second notice. That is essentially what we hope will happen. But, as in every regime around the world that is dealing with these issues at the moment, there is still no real conclusive evidence on that. We are lucky, in a sense, in New Zealand that we are tonight putting through this House legislation that does not include that Draconian measure of suspension and termination, which has turned so many other environments in the international area on their heads and created a flashpoint for protest. As I mentioned in my second reading speech, in the UK there is a High Court case, a judicial review, happening as we speak on their legislation because it includes termination.

In conclusion, I say that Labour supports this bill. We support it with reservations. We believe there are some much bigger issues to deal with on this issue. We look forward to providing substantive policy in this area.

It is my privilege to speak on the third reading of the Copyright (Infringing File Sharing) Amendment Bill. This is an opportunity to thank the Minister, Simon Power, for his work in bringing about this bill, which cleans up some of the mess from the last Government. It is an opportunity to thank the Minister also for his negotiation skills. There was a lot of negotiation going on not just with other parties but with stakeholders, in order to get what I believe to be fair and reasonable legislation that addresses the needs of all stakeholders.

I will talk on a couple of other points, but first I also thank the officials. We have brought a number of bills to the House through the Commerce Committee. Our relationship with the officials in getting legislation through our select committee—but also through the House—is good. We salute the officials and the work that they do. This piece of legislation certainly provided some pretty complex issues to work through.

I will touch on a couple of issues during this speech. One is about cost recovery. I mentioned in the Committee stage that I think it is a pretty big point. When the Internet service providers, or Internet protocol address providers, came to the committee they talked about the huge burden of cost for implementing such systems. Depending on the size of the Internet service providers, some said it would be in the millions of dollars and some said it would be in the hundreds of thousands. But in terms of coming to an actual cost per notice processing fee, they came up with a range of between $14 per notice and $56. Those notices far exceed the actual price of the transgression. We could not work out in this legislation an appropriate cost recovery, or fee-paying, system. That will be left to the regulations. In my opinion, it is not always ideal to leave these types of fee-paying systems to the regulations, but in this case I think the officials will work closely with the relevant stakeholders to find a system that is fair and reasonable for the parties. It may be relevant to note that regulations have been set up in the United Kingdom on a cost-sharing basis. That may be a model that our officials and certainly the stakeholders here may look to.

This legislation has been about balancing competing interests. We have all noted the importance of private property rights, the importance of intellectual property rights, and the investment by our industries—especially our creative industries—in making those products and services, and the importance of balancing that out with the freedoms of individuals to express themselves, and the freedom to certainly access the Internet. I think, on balance, this legislation has been put through in a really effective way. I think the legislation will be workable. But just as a warning, if you like, to the members opposite, I say this is still subject to evidence being produced that this system will work. It is not a guarantee, as one of my colleagues from across the aisle has said, and we will not support that, as a Labour member said prior to my speech. It will be about collecting the right amount of evidence and a decision being made in the future, in a review period that will be reasonable, in order to see whether the current regime is working and whether a suspension system will be put in place. But this is very good legislation; I think it balances out the competing interests, and I commend it to the House.

I am pleased to note that the Hon Chris Finlayson is a Minister in the House now. His colleague the Hon Dr Nick Smith has been in the chair for most of the night on the Copyright (File Sharing Infringement) Amendment Bill, and unfortunately he has not addressed the issues we raised that still remain outstanding with regard to the effect that the Trans-Pacific Partnership negotiations will have on the length of copyright periods, and whether the section 92 provisions in the bill will be reopened. According to the New Zealand Herald on 31 March, from the content of leaked proposals from the United States Government in the Trans-Pacific Partnership negotiations, those things are on the table. The United States wants to lengthen the period of copyright so as to benefit the monopoly holders of those copyrights, and also to reopen the issue about what responsibility Internet providers should have in respect of breaches of copyright that are carried out through the services they provide.

The policy issues and the Labour position on the bill have been well outlined by Clare Curran, and I will not go into that again. But I do want to just place on record that I think it is unsatisfactory that the Minister in the chair, despite the fact that this issue has been the subject of prominent publicity, has not been able to give us any assurance that the Government is not going to bend on these issues. I believe in copyright, but I do not believe in open-ended copyright periods. I do not believe in unrestrained monopoly rights in any area. If one develops something that is patented, which actually needs novelty and a lot of other steps to be proven before one can get a patent, one’s patent does not last for 50 years beyond the life of the person who made the invention. It does not last as long as that. A patent right is a lot shorter in terms of years than we already have for copyright, which currently goes for 50 years beyond the life of the creator. The United States wants to extend that to 70 years.

The theory that lies behind copyright is not advanced by extending the copyright period. The theory that lies behind copyright is that there has to be some fair reward available to the person who creates creative content or content suitable for copyright in designs and things. It is important to allow that through copyright. Otherwise people will be unable to afford to produce the content that makes us richer as a society—and I do not just mean “richer” in a money sense; I mean culturally richer because we have the result of creative endeavour. So that is the theory behind it.

When copyright was invented, it was, I think, originally a law invention in the United Kingdom. Until then, people could write a book and the next day someone could rip it off. So someone could rip off the book that someone else might have laboured 10 years to produce; the person who spent the 10 years writing the book could be left penniless, and the person who ripped it off and then printed it could make a fortune, and that was wrong. Apart from anything else, if that had persisted, there would not be many people writing books, and we would all be the poorer for it. That is essentially why we have copyright, but there does not have to be copyright for the life of the author plus 50 years after their death in order to encourage people to write books. It has already gone a lot further than that, if we think about it. In practice, an author does not write a book because someone else will get a royalty potentially 50 years after he or she has died. That is not real. And the fact that the Americans want to extend that to 70 years after the death of the author is patently about money. It is not about creativity; it is actually about extending the monopoly rights of the copyright holder.

💬 Peseta Sam Lotu-Iiga: It’s not a monopoly.

It is a monopoly. The copyright is a monopoly. Did I hear that member say it is not a monopoly? That is completely wrong. That is what people get when they get copyright. They get the right to control who copies it. The copyright holder is the only person who has the right to legally copy it. That person has monopoly rights.

💬 Jonathan Young: Personal property right.

It is a monopoly personal property right. It is an intangible right, as one member put it.

💬 Chris Tremain: No one is arguing that it’s a property right.

What?

💬 Chris Tremain: That’s what the Minister said. He agreed with you.

Did he agree that the term should not extended beyond 50 years?

💬 Chris Tremain: No, he said that it was a property right.

Well, no one is disagreeing that it is a property right. We are just saying there should be limits to that copyright. There should be limits, and the Minister would not go on record and say it ought not to be extended beyond the existing term of 50 years after the death of the person who created the material that is subject to copyright. This is just so typical of this Government, which really rules for the big end of town. Those at the big end of town are the ones who benefit from extended use of those monopoly rights.

💬 Peseta Sam Lotu-Iiga: And employees of those corporations.

Oh, I see. So there is going to be some trickle-down theory. I have no problem with people making money. I actually like businesses to succeed and make money. I like making money myself. It is nothing to be ashamed of. But we ought not to confer monopoly rights that give people a privileged right to extract a monopoly rent for an unfairly long term. That is why I made reference at the start of this to the theory that lies behind copyright. We should have recourse to that underlying theory, which is to encourage creativity and creative content to be formed for the benefit of society. When there are lengths of copyright that are longer than is necessary to achieve that, people should not kid themselves that they are in pursuit of the theory that lies behind copyright. They are not. They are actually agreeing to longer terms because it is in the monopolistic interests of those people who have that pre-eminent position as a consequence of their copyright and who want it to go on longer. That is all that is happening. So the Government ought to be clear and say it will not agree to that provision.

💬 Chris Tremain: So we’re going to socialise creative talent now, are we?

That member does not get it. He just does not get it, just like Dr Nick Smith did not get it. But I do trust that Chris Finlayson will get it, and that is why I am raising the issue. I hope that he keeps an eye on this in the negotiations in the Trans-Pacific Partnership. Otherwise, we will make New Zealand poorer as a country overall, not richer. We will get poorer as a country overall, not richer, by agreeing to those sorts of unwise terms. We do not agree to ridiculously long lengths of patents. Why should we have overly long periods of copyright protection? That is all I am asking, and we still have not had an answer from the Government on that.

The other issue is that it would be a nonsense to go through all of this again and reopen the section 92 debate. I do not say Internet providers ought to be free of all responsibility in respect of protecting other people’s property rights. That is a cop-out. Having said that, I say there are technological difficulties that cannot be ignored. It is no use having laws that are patently unenforceable, which was one of the problems with the underlying law before its reform. I do not approve of laws that sit there theoretically on the statute book but cannot in practice be enforced, because that brings the law into disrepute too.

I support this bill, but I am concerned that this Government is too permissive of monopoly excess. We hear people claiming that this is private enterprise. Monopolies are not an example of free enterprise; free enterprise relies upon—in its proper form, in my view—competitive markets. These are exceptions to competitive markets. The Government is too ready to agree to uncompetitive markets in New Zealand. National has done it before in respect of lines companies, and we still have it in respect of power companies, where we have proven that there is monopoly excess gouging of consumers through excessive monopoly-based power being used to excessively price electricity in New Zealand. We have seen it before in New Zealand in respect of telecommunications. Currently, legislation is going through this House that will create monopoly rights in respect of some incumbents in the broadband arena, which has been widely opposed by most broadband market participants as being anti-competitive, yet is still being pursued by this Government. So in New Zealand, people are right to be suspicious of this Government when it comes to its control of monopoly excess, and I certainly am. Thank you.

Kia ora, Mr Deputy Speaker. It has been an absolute privilege to speak tonight, even though my voice is fading. I acknowledge all the robust debate we have had.

So we have the Internet, eh? It is not like Skynet, but it is transforming our world in such amazing ways, and I have seen that tonight in the debate online. It is not just a “nice to have”, in the parlance of the Government. It is an essential utility. It is an essential part of our modern world. It is the way the Government interacts with its public. It is the way our democracy is increasingly having its debates. It is where Government departments interact with the public on things like tax. It is where we entertain ourselves. It is where some of us meet our partners. It is where we literally live our lives. It is such an important part of our world. I also think that Internet access is a fundamental right in our modern world. One survey of 28,000 people in 26 countries found 80 percent thought that Internet access was a fundamental right, and I support that worldview.

Essentially, the debate we have had tonight is the legacy of a decade or more of a lack of actual foresight by this Parliament and previous Parliaments. We should have been having these discussions 10 years ago. A whole generation—my generation—has grown up not knowing anything else but copyright infringing. All my generation has grown up with are those ridiculous ads we see when we load a VHS. Those ads say that stealing a video is like stealing a car or robbing a purse. It is nothing like that. Those exaggerations in the ads have done no good service to the genuine debate on copyright in New Zealand.

It is good that Parliament is discussing Internet issues and copyright in general. The Copyright (Infringing File Sharing) Amendment Bill is better than before, and I have taken every opportunity I can to point that out. It is so much better than section 92A of the Copyright Act. The Commerce Committee did some fantastic work in cleaning it up, but, ultimately, we need to have a fundamental rethink on copyright law. We have gone about it in the wrong direction in this Parliament. This bill has come from the position that we need to strengthen copyright. That is the basic premise this bill is built on, not a genuine reflection of what copyright is in 2011, what it will be in the coming decade, or what we need to do to make our copyright law better, more robust, and reflect the real world.

It is disappointing that this debate is happening under urgency. I was looking forward to contacting members in the Chamber and putting forward another Supplementary Order Paper to amend the parody and satire law clauses of our copyright legislation. At the moment, websites are being taken down in New Zealand because we do not have an ability for artists, creatives, political satirists, or anyone to use parody or satire as a legal defence as they can in Australia. I recommend that members check out the Hitler downfall parody videos that are online, particularly the one about Internet take-downs.

It is a pity we are taking this legislation through all stages tonight. I acknowledge the listeners and thank them for their tweets, humour, and ideas, but most of all for engaging with politics. Too often there is a disenfranchised chunk of our country. It is great that they have definitely been watching us in their hundreds—maybe thousands—today.

The theme I have picked up from those tweets, blog posts, and humorous pictures is the scepticism of us as elected officials and the scepticism of Parliament as a legislature when it comes to copyright law. Section 92A really did scare a huge chunk of our most informed population, and the lack of responsibility in the House has been disappointing. It is all right to say we mucked up section 92A. It was bad law. It was rushed through. The process at the end—when massive amendments were rammed through—was terrible. It is all right for both Labour and National members to take responsibility and sometimes say that they mucked up.

It is also not surprising that there is scepticism from the public for the Trans-Pacific Partnership negotiations. New Zealanders are legitimately concerned that we are literally negotiating away our rights as a country in order to get free-trade deals, and when it comes to our own independent ability to make law on things like copyright.

I acknowledge the compromise that was reached at the Commerce Committee. I prefer that we are seeing this position in the Chamber. I would still like to see the facts about what thresholds will enact it, what the evidence will be, what the timelines will be, and whether there will be public consultation. I have not seen the facts, and I do not think the public have seen them. It is good we are debating the bill, but I do not think we should have a provision in the bill for account suspension.

The Green Party is fundamentally opposed to that provision, so is Labour. Labour members say they are fundamentally opposed to the provision, but they are quite happy to devolve responsibility to the Minister. They are washing their hands of the responsibility. People want to vote and people want to see principles in the Parliament. They want to see what a party’s bottom lines are, and when members say they are fundamentally opposed to something but will vote for it, people start to question that view.

Our position on the opposition to account suspension is not a Green position; it is our community’s position. I have seen comments from the right of the political spectrum all the way through to the left. It is not moralistic or a case of the Green Party taking a higher ground; we are taking the public ground—what the public of New Zealand want.

This law is bad precedent. The Minister, Nick Smith, is wrong. We do not take away someone’s bike or car if they use their bike or car to commit a robbery. We do not take away someone’s telephone if they use it as part of a criminal act. It is just not like that. We have seen no evidence that account suspension will be effective. We have seen no compelling arguments as to why we need to do it.

I misquoted earlier. The 70 percent figure, those who would reduce their file infringing after receiving an education notice, was not a New Zealand figure. I understand that it was a Canadian figure. We just do not have that evidence in New Zealand. Ultimately, we are bringing in a law that is disproportionate, will not work, and takes away people’s rights to an Internet account when the Minister decides to enact it through an Order in Council.

The Greens have not been irresponsible. We do support notices and fines, and we do think they are an appropriate deterrent. It is somewhat ironic that Jami-Lee Ross, our newest member, who gave a fantastic tea-party speech all about the role of the big State, is voting for a law where the State will come in if the Minister enacts it and take away—pull the cable out—someone’s Internet account. That is “big State” if ever I saw it.

There is a chance we could have got a better bill. There is no reason why account suspension had to be in the bill. Minister Power is a reasonable Minister. I am sure he would have liked to have cross-party support in the Chamber, but we will never know, because Labour members say: “Trust us. We negotiate as hard as we can. Trust us.” But can we trust Labour? Ultimately, like the tweeters, I have a great degree of scepticism of the Government, and I believe that it will bring in account suspension as soon as it can. Who knows how long the Government will look at the evidence for, what type of evidence it will be, and who will be providing it? Serious questions are left up in the air. Essentially, the section 92A debate will keep on flowing over the next years.

In summary, I acknowledge the good changes made at the select committee—peer-to-peer software, the changing definitions of Internet service providers, and the fact that, on the whole, lawyers will not be involved in the tribunal. I acknowledge all the stuff we did not get a chance to talk about tonight because, rightfully, we focused on the account suspension issue. It would be good to discuss what was left in the regulations. It would be good to discuss mobile termination and the big decisions the select committee made on that issue. To wrap up, I say that I am proud to be standing on my principles in this Chamber and not voting for a law that has such a disproportionate, unfair, unworkable, and wrong clause in it about account suspension. Kia ora.

I am very pleased to continue the discussion and debate on the third reading of the Copyright (Infringing File Sharing) Amendment Bill. The issue is very interesting. Essentially, three parties are involved—copyright holders, those people who utilise what they produce, and, in the middle, Internet service providers, who are the medium through which the files are shared.

In July 2008, 20 percent of Europeans used file-sharing networks to obtain music, and 10 percent used paid-for digital music services such as iTunes. So we can understand why musicians are particularly concerned about, and interested in, the passage of the bill. If we look at those figures in Europe we see that two out of three downloads were through file sharing, whereby there was no payment to, or acknowledgment of, the owner of the music. I remember Moana Mackey making a comment during the Committee stage that I found very interesting. Her comment was about working to find a compromise between the personal property rights of a creative person who constructs a piece of art, writes some music, or makes a movie and the rights of people who own a computer to access information and content on the Internet. We should be looking for a compromise.

There is a very logical compromise, which I am sure everybody in the House supports and which the bill is about, and it is called a financial transaction. If somebody wants to download something from the Internet that belongs to somebody else, if they engage in a financial transaction—value for value—then the person who downloads the song and listens to it or watches the movie receives value from it and they reciprocate value back to the producer, whether the producer is a company or an individual. That transaction is broadly acknowledged as being both honest and fair. The bill is about balancing the rights of people by doing what is honest and fair by people.

Our Government wants to see the economic and financial growth not only of industry, manufacturers, and exporters but also of our creative people, entrepreneurs, designers, and innovators. We want to see those people acknowledged and advantaged by their skill. We want the nation to be aspirational. If we allow people to rip off others, take away what they have created, and give back no value, then we are undermining the aspirations of this country and undermining those people who use their intellect, creativity—

💬 Mr DEPUTY SPEAKER: I am sorry to interrupt the honourable member, but the time has come for me to leave the Chair.

Debate interrupted.

Sitting suspended from 12 midnight to 9 a.m. (Thursday)