Monday 31 July 2017

So farewell then Section 73 CDPA...

Section 73 of the Copyright, Designs and Patents Act 1988 (CDPA) is repealed with effect from today, 31 July, as a result of the coming into force of section 34 of the Digital Economy Act 2017 (DEA).

Section 73, commonly known as ‘the cable retransmission defence’, provides that the copyright in broadcasts of public service broadcast (PSB) channels is not infringed by retransmission via cable in the area where the broadcast is receivable. The section was,
according to DCMS, intended to encourage the rollout of cable services and ensure the provision of PSB channels across the UK by facilitating their retransmission in areas where aerial reception was poor. In effect, it allows cable platforms to retransmit PSB channels in the UK without paying fees.

A number of factors led to the demise of section 73. First, the Government considered that the objective of ensuring the availability of PSB channels throughout the UK had already been achieved, given the proliferation of platforms and the increase in cable networks’ capacity.

Second, concerns were raised about the ‘internet loophole’ opened by the defence. Relying on section 73, internet-based live streaming services argued that they were able to retransmit the content of PSB channels online without seeking permission or paying copyright fees. Thus, they could generate advertising revenues without transferring any benefit back to the public service broadcasters (PSBs), effectively exploiting the public funding granted to PSBs and directing legitimate commercial revenues away from the PSBs. There was cross-party agreement during the passage of the Digital Economy Bill that section 73 was never intended to be used in this way and the loophole it had created was liable to ‘fuel a vicious cycle of under-funding’.

Although not directly linked to its repeal, section 73 has also been declared incompatible with EU law, in the second ITV v TV CatchUp case, discussed by the IPKat here.

The repeal is expected to create what DCMS described as ‘a new market in copyright where one did not exist before’.  Or, as the Telegraph put it more bluntly last week "ITV readies hefty bill for Virgin Media".

The repeal of section 73 will also have the welcomed effect closing the loophole internet-based live streaming services had exploited. PSBs and underlying right holders may benefit from seeking retransmission fees from online service providers. The monetary value of their rights is yet to be ascertained but will this be the final chapter for TV CatchUp?  

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