Copyright (Infringing File Sharing) Amendment Bill — Second Reading In Committee Third Reading 
Copyright (Infringing File Sharing) Amendment Bill — Second Reading In Committee Third Reading 
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Copyright (Infringing File Sharing) Amendment Bill 
Second Reading 
Hon Dr WAYNE MAPP (Minister of Defence) 
 on behalf of the  
Minister of Commerce 
: I move  
That the Copyright (Infringing File Sharing) Amendment Bill be now read a second time 
. On behalf of the Minister of Commerce the Hon Simon Power I thank the Commerce Committee for its consideration of the bill and for hearing over 200 submissions which has resulted in changes to the bill. 
As members of Parliament and those in the community who are interested in this issue will know the bill has had a long genesis and has involved a complex debate on difficult issues. At the heart of the issues was the impact of the Internet on copyright law and the effect it had on incentivising creators to produce original works. 
It is important in law that we provide appropriate protection for creative industries so that they can continue to provide jobs for New Zealanders and continue to contribute to our economy. But at the same time the creative industries must adapt to changing technologies and the changing market place for creative works. 
The Copyright Act 1994 grants exclusive rights to creators of original works so that in a sense they can make an economic return on their creative endeavours. That situation provides a vibrant industry in the fields of music literature films and software in particular. So ensuring that copyright owners have effective measures to enforce their copyright is consistent with the Government’s key goal of encouraging economic growth. However amendments made to the Copyright Act in 2008 were intended to bring the 1994 Act in line with the contemporary digital landscape. These amendments included the insertion of section 92A in the Copyright Act—and I note that Clare Curran the member for Dunedin South has written extensively on this issue in her various blogs—which has required Internet service providers to adopt and reasonably implement a policy for the termination of repeat copyright infringers. 
However as the House will know public and industry opinion was that section 92A was in fact unworkable. Accordingly this Government stopped that provision from coming into force and undertook to look at the issue again. So this bill the Copyright (Infringing File Sharing) Amendment Bill repeals section 92A of the Copyright Act 1994 and also amends Part 6 of the Act to provide a fair and balanced process to deal with online copyright infringements. 
Currently copyright owners lack an effective enforcement measure against illegal file-sharing which is somewhat practised by many people who use the Internet often of a younger age group. 
Clare Curran 
: Do you? 
Hon Dr WAYNE MAPP 
: I would not do that. However I note that I do know younger relatives who may possibly have done that. Claims in the District Court for copyright infringement via file sharing would be too expensive and costly for both the copyright owners and for those wishing to contest infringement claims. The current process is unduly complicated in that copyright owners need to apply for a court order to get an Internet service provider to release an Internet account holder’s details before they can make a claim. 
The bill provides for copyright owners or their representatives to send information showing alleged copyright infringement via file sharing to the relevant Internet service provider. The Internet service provider will then match that information to an account holder and it may then—and this is the important point—send up to three infringement notices within the prescribed time frames. This is known as the three-notice rule. 
If the account holder ignores those warnings and continues infringing the bill provides for the copyright owner to take a claim to the Copyright Tribunal. The tribunal can make awards of up to $15000. As other speakers will note there are other provisions in the bill including a provision for copyright owners to apply to the District Court as opposed to the Copyright Tribunal for the suspension of an Internet account for up to 6 months in appropriate circumstances. 
The key recommendation from the Commerce Committee is that provisions in the bill relating to Internet suspension do not come into force until such time as specified by an Order in Council. I should note that there were a large number of submissions on this specific issue arguing both for and against Internet suspension as a deterrent for copyright infringement. The compromise recommended by the Commerce Committee and supported by the Government is one that provides the right balance between the interests of Internet users and the need for an effective deterrent against illegal file-sharing. The Government is committed to monitoring the infringement notice process and the Copyright Tribunal process in order to determine whether they are in fact sufficient deterrents to illegal file-sharing. 
Another key recommendation from the select committee is that Internet service providers will not be initially required to set up a notice-sending system for their mobile broadband networks which of course are increasingly popular systems for file sharing. This covers a period of 2 years after the bill comes into force whilst the Government monitors any copyright infringing activity from these sources as those devices increase in their capability. However an Order in Council can change the date that these networks are included if there is a substantial increase in the volume of file sharing over mobile broadband and that would be an essential part of noting change in technology and change in Internet capacity through broadband networks. 
There were a number of submissions on whether the bill should include specific exceptions to prevent an order or award being made by the Copyright Tribunal or the District Court against an Internet account holder. The Government considers that the Commerce Committee has developed a sensible recommendation on this particular issue. The committee has recognised that creating specific exceptions in itself would create loopholes and has instead recommended that the tribunal or the court has the discretion not to make an award or order where it would be manifestly unjust. This will allow the relevant body to determine on the facts of each case whether an award should be made in the circumstances. 
It is important to note that Internet users should attempt to ensure that their connections should not be used for illegal purposes—that is a very circumspect sentence. There may be a number of useful technical procedural amendments proposed by the committee that the Government will support. The Government will put forward a Supplementary Order Paper in the Committee stage which will propose minor technical amendments. The Supplementary Order Paper will also amend the commencement date for the Act from 1 July 2011 to 1 September 2011. 
In closing I reiterate the Government’s commitment to ensure the Copyright Act remains a useful and effective tool for New Zealand’s creative industries which contribute significantly and whose contribution will increase in the future. As I know from my role as the Minister of Science and Innovation they will contribute significantly to our economy our culture and our role in the wider world. I commend the bill to the House. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I have mixed feelings about the Copyright (Infringing File Sharing) Amendment Bill coming before the House today. The House is in urgency and given that the bill has been sitting on the Order Paper for months nothing about today or tomorrow requires the bill to be passed quickly. The Government uses urgency excessively. Before I get into the substance of the bill I will quickly mention some recent statistics about urgency that were compiled by my colleague Grant Robertson. In just over 2 years of the National Government 17 bills have been passed without referral to a select committee compared with five or fewer in the full 3 years of the three previous parliaments. There are reasons to justify urgency from time to time but not to that extent. 
One thing about the Copyright (Infringing File Sharing) Amendment Bill is sure: it did go to a select committee. There was robust debate in the Commerce Committee and throughout the community and there has been much to-ing and fro-ing on the bill. The outcome is not perfect but with the support of both sides of the House the legislation is better than what was passed in 2008. Labour supports the bill but we still have reservations and I will be speaking about them. 
I also want to say that in some ways I am pleased the legislation has come back before the House. It was the first portfolio issue of communications and information technology that I took on board and I realised pretty quickly that the rising discontent and dismay among the community about new and emerging technologies and the creation and distribution of digital content had to be addressed and that we parliamentarians were mostly out of touch. 
If I thought I would get a straight answer—although I think there was nearly one from over on the other side of the House earlier—I would ask all members right now to put up their hands if they have or if they know someone who has illegally downloaded material. I would like to think that many of us as a result of the discussions that have gone on around the bill and in the wider context are now a bit more in touch with reality on what people are doing on the Internet. 
The bill has created a lot of interest. There were 237 submissions including 31 supplementary submissions. In the coming years the Internet will become increasingly essential in all of our lives. Disconnection of accounts is a disproportionate remedy for file sharing. We needed a law but we did not need a bad law. The bill represents better law. I know that it will not please everyone—in fact there are parts of the bill that some submitters still oppose—but there are times when it is important to negotiate in order to get an outcome that is less bad than taking a high moral stand and ending up with something we fundamentally cannot live with. Negotiation is not a one-way street and I am pleased to say that my experiences in negotiating with the Minister of Commerce Simon Power on the bill and in the Commerce Committee have been constructive. 
Labour is prepared to support the bill through its remaining stages due only to a compromise that we reached with National that no New Zealander will have his or her Internet connection suspended as a result of the bill. Labour’s preferred option was to completely omit account suspension provisions from the bill but National’s position was intractable. Account suspension provisions remain in the bill and could theoretically be used in the future but any Minister who implements termination will have to wear the consequences. 
Rather than oppose the bill outright we are prepared to compromise to ensure that New Zealanders are not denied access to the Internet which is something that so many people rely heavily on today. If the suspension penalty is used the Minister of Commerce will have to enact the clause by Order in Council putting the onus on the creative industries to prove that there is a case to terminate access and that the notice system is not working. Let us be very clear: if it were not for this compromise then the bill before us today would state that New Zealanders’ Internet accounts could be cut off for 6 months. Labour would have opposed the bill and it would have been bad law. 
Although the high moral ground might be a great place it is not much good when we are left standing on our own and the world moves on around us. Labour wanted to have an impact on the bill—and we have—but we have not got everything we wanted and we have not got everything that many in the community wanted. This bill is not Labour’s bill. Section 92A was from our bill and despite the good intentions to make it work it resulted in a grand stoush between the different parties that led to a rethink. Labour pushed for and supported that rethink. 
I will quickly mention the Supplementary Order Paper that is coming before the House today on proposed new section 122MA. I know that the proposed new section has caused some more consternation in the industry in relation to what appeared to be an attempt to push through a guilty by accusation regime and to put the onus on the account holder to prove that he or she has not infringed when all the rights-holder has done is file a notice of infringement. What appears in the bill appears to put the onus on the account holder and the words used—“an infringement notice is conclusive evidence”—are misleading and wrong. We understood they were wrong after the industry approached us and we sought further talks with the Government. The Government agreed to amend the clause and to ensure that once a notice is received and the Copyright Tribunal process triggered all the account holder has to do is respond and challenge the notice. That will trigger a reversal of the onus and put it on to the rights-holder to prove that an infringement has occurred. 
What we have ended up with is better. The bill is not perfect but it is better than the process in many other jurisdictions. Right now in the UK implementation of its Digital Economy Act legislation that is designed to crack down on unlawful file-sharing is being delayed by a judicial review in the High Court because of a challenge brought by Internet service providers. Internet providers BT and TalkTalk demanded the judicial review arguing that the legislation was rushed through Parliament without proper debate. They claimed that the measures unnecessarily impact on users’ privacy and force Internet service providers to police copyright infringement on the Net. The courts will consider whether the Act is in line with the European legislation—in particular as it relates to users’ privacy and the role of Internet service providers. If the court finds in favour of the Internet service providers then the Act will no longer be enforceable. 
Thankfully the bill before us today was worked through and compromise was reached albeit somewhat grudgingly. That brings me to a reason why I am pleased the bill is before the House today and why if we had to choose the issues in the bill that are plaguing people are kind of minor in comparison with the bigger picture. I refer to the Trans-Pacific Partnership agreement which is a free-trade agreement of sorts that is currently under negotiation between New Zealand and eight other countries including the US. The agreement is an attack on our sovereignty and what it currently contains in relation to intellectual property issues is truly frightening. Leaked texts of the Internet Protocol chapter reveal that if the agreement is accepted in its present form and if New Zealand signs up then the bill will be chicken feed in comparison. The Trans-Pacific Partnership agreement is the next battleground for intellectual property in New Zealand and we all need to unite around it. 
Auckland-based Internet protocol lawyer Rick Shera has written about this issue recently. He said: “The return of s92A guilt on accusation repeat infringer termination of internet accounts—3 strikes … the US wants us to effectively scrap the last 3 years of consultation around the replacement of section 92A and the reasonably balanced (but still not perfect) approach we are working towards in the Copyright (Infringing File Sharing) Amendment Bill … Imagine you’re an ISP who has to bear the cost of gearing up for that regime only to be told later in the year that its Ground Hog Day and we’re all going back to the section 92A debacle.” 
Labour has said that the leaked text on intellectual property copyright and parallel importing in the Trans-Pacific Partnership negotiations requires an emphatic rejection from the New Zealand Government. The secrecy surrounding these provisions is of real concern. The leaked United States provisions are plainly not in New Zealand’s interests. 
The Copyright (Infringing File Sharing) Amendment Bill is a compromise. We support it but we have serious reservations about suspension of Internet accounts as a penalty. Thankfully termination will not be enacted. We are concerned about the costs of this new regime about where the costs will fall and about who will pay. We will keep a watching brief on the onus of proof issue raised in proposed new section 122MA and on whether mobile technology is affected and will be included in the legislation in a few years’ time. The bill is a lot better than it was. As long as termination of accounts remains unenacted we will support the bill. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise in this second reading to support the Copyright (Infringing File Sharing) Amendment Bill. Before I talk to the specific sections of the bill I will remind the previous speaker Clare Curran about a little of its history. 
The original section 92A of the Copyright Act was added by the Copyright (New Technologies) Amendment Act passed by the Labour Government and led by the Hon Judith Tizard. That section actually caused such an outcry from opponents and industry stakeholders that it raised serious concerns. I was not in Parliament to support that bill but I know that Judith Tizard pushed it through. As a result our National-led Government has not brought section 92A into force. A number of industry people were against the Labour legislation and the Internet Blackout campaign drew international support against it. So it is rich that the previous speaker has come to this House and said that she grudgingly accepts this bill. 
We did a lot of hard work on this bill and there was a lot of consultation with various stakeholders within the industry. What has come about I believe is a firm but fair compromise which is about making the legislation more workable and effective. It discourages illegal file-sharing and it provides more effective measures in order to protect our creative industries and help them enforce their copyrights not just in the Copyright Tribunal but in the District Court. 
What does the legislation do? As the Minister pointed out the three-notice regime includes Internet service providers sending warning notices to customers informing them that they have infringed copyright. Part of that regime is about warnings but part of it is about education. A number of surveys have shown that people who share files do not actually understand that they are breaking the law—they do not. Part of the notice regime is to educate those people. Many of them are young but I would not totally blame young users of the Internet for transgressing the laws; I think that people across the board are part of the society that breaks the law. 
The tribunal can award up to $15000 in penalties based on the damages. The suspension regime that is part of this bill can be brought in by Order in Council. What is important here is that the Government will work with stakeholders to monitor and review the situation. We will monitor and review the situation and if suspension is deemed to be the appropriate measure based on the facts over time after a review then that is what will happen. But suffice it to say that we need to monitor the situation. The Ministry of Economic Development will work with various stakeholders including the member opposite Clare Curran who said she was none too happy about the result of this bill. But at the end of the day I thought all parties were happy and that a fair and balanced process to deal with online copyright infringements had come about. 
It is a good bill. I think it will be effective and workable in the long run. Stakeholders—certainly those who have come to me both personally and at the Commerce Committee—are happy with the situation which will be reviewed and monitored going forward. I support this bill. 
Hon STEVE CHADWICK (Labour) 
: 
 I am not on the Commerce Committee but it is interesting that we are talking about conflict here. When the original Copyright (Infringing File Sharing) Amendment Bill was proposed it was supported by National at the time and it was actually the Internet service providers who as a voice and as an industry voice rose up and said they had some very real concerns about it. I heard the leader of our committee Clare Curran speak and she did not attack it at all; she said Labour had some reservations. I tell the House that we do support this bill and this position. 
This position has come about because this bill I think has not been rushed. It went to the Commerce Committee and submitters were heard and given their day of having their democratic right exercised at the select committee. It is as the result of that and of considerable negotiation that we have come to this position today. We have serious concerns and reservations about the suspension of Internet accounts as a penalty for breaching copyright but because of the compromise that has been reached democratically at the select committee—and I congratulate all members and the chair—Labour members are now prepared to support this legislation and we reiterate that in the House tonight. 
All of us in New Zealand know that it is incredibly important for copyright to protect our local artists our musicians and our creative industry producers. They are the heart and soul of New Zealand and their very success shapes us as New Zealanders and the face of New Zealand internationally. We would never want to damage those creators of creative products who are very much at risk through the copyright provisions proposed in this bill. We in Labour strongly believe that those who create music films and other entertainment should have their work protected from piracy. I am sure members of the Government believe the same because we are all incredibly proud of our creative industries which are growing industries in New Zealand. The creative industries would provide opportunities for more jobs and more work if only the Government would put emphasis into the training of people in those industries but we do not see that at all. Our opposition to the suspension provision takes nothing away from the support of our local artists. We agree that repeated copyright infringements deserve a penalty but the balance is all about what that penalty is and what that penalty regime is. 
I congratulate those who spoke up and submitted to the select committee. Labour wants to give all of their industries a fair go and to make sure that everyone pays their fair share. That is Labour’s principled approach to most of our policy positions. There are jobs in this industry especially in the information technology industry and especially in interactive video games that are yet to be created but they are intrinsically linked to the development of the “New Zealand Inc.” information technology identity. I think those jobs are very worthy and need protection. 
We still have serious reservations about the suspension of Internet accounts as a penalty for breaching copyright. Amendments were made and compromise was reached at the Commerce Committee—and I congratulate members on that negotiation—which means we will now support the legislation. I think that is positive. We were assured by the Minister in charge of the bill Simon Power that no New Zealander would have their Internet connection suspended as a result of this bill. 
I think that National member Sam Lotu-Iiga was absolutely right; most people on the Internet when they become Internet-savvy do not use it to infringe. They do not infringe intentionally. But I know the younger generation and I have certainly seen evidence of infringement amongst my children’s generation when they download. I do not think they see that as being illegal at all. If they infringe copyright with what they download then we have a problem. Information technology creatives are also creative in finding ways around and in circumventing any disconnection. They will do that simply by setting up multiple Internet service provider connections and we know that. This industry moves very rapidly in creativity. When in Government Labour was very aware of piracy and we were aware of piracy in lots of areas too such as films and lots of other creative products. We wanted Internet service providers to do their own policing of illegal downloading and to have a policy—just a policy—for terminating active repeat offenders. 
We still have concerns about this bill but it is great that we are debating it in the House tonight. The regulatory impact statement states there is a case for intervention but there is uncertainty about the scale of harm done by illegal file-sharing. The case has not been clearly made that sales of music and movies via the Internet are decreasing due to illegal file-sharing. The regulatory impact statement did not have a preferred option which shows that the case has not been clearly made that sales of music and movies via the Internet are decreasing due to illegal file-sharing. 
Some sections in the bill remain problematic. The infringement notice is a burden and the bill actually says that people will have to prove that they did not in fact infringe a copyright. Some submitters raised concerns about that point at the select committee and I am pleased that the Minister has attempted to clarify that under the Supplementary Order Paper put forward today. 
I think there has been a good process. It has been a robust process and Labour certainly now supports the bill. I congratulate all of the committee members. I am pleased about the Supplementary Order Paper. I think we have to be very aware of the trans-Tasman implications. When we think we have fixed legislation in New Zealand we may find some other global implications we need to be very careful of. But to all intents and purposes we support the bill. 
GARETH HUGHES (Green) 
: 
 Kia ora. Nga mihi nui ki a kotou. Kia ora. I rise to take a call on the Copyright (Infringing File Sharing) Amendment Bill. I acknowledge the hard work of the Commerce Committee members. I might be a geek but I am not the type that can fix a computer. Information and communications technology is one of my 11 portfolios—I have a bundle—and to be honest I do not have a huge history of looking into technology or copyright issues. But I acknowledge that I really enjoyed hearing the submissions on this bill and learning more. 
I love New Zealand music; I love New Zealand film. I want those artists to make a fair living through their art. I thank all the submitters. The message I heard from them was clear. The Green Party will be opposing the bill tonight because we have always opposed and we continue to oppose account termination or suspension as a remedy for file infringing whenever it is written into legislation. Even if not immediately enacted the termination provision should not be there—full stop. 
The Green Party also opposes the use of urgency to pass all stages of this bill through the House with no warning that it was coming. 
Tonight I will touch a little on my personal reflections on the select committee process highlight the improvements that have been made—because some were made in the select committee—and lastly explain the reasons why the Green Party will be opposing this bill tonight. Without any technical background—except maybe website surfing gaming and no doubt unintentionally listening to pirated material—I went to the select committee to hear submissions on the bill. I went in with an open mind and I met with both sides of the debate outside the room. 
In my first reading speech I focused on how the Internet had built connections increased global communications contributed to more collaborative ways of working and revolutionised business and the global economy. The Internet has unleashed fantastic creativity from the arts to academia and business. However making a business out of creativity is in some cases not viable because of illegal file-sharing. 
The Green Party supported this bill at its first reading stating that although we did not think it would solve all the problems it might play a part in the solution and we looked forward to hearing more in the select committee. The Green Party thinks the current bill is significantly better than its predecessor which introduced the Draconian section 92A and was put forward by Labour during the last term. This bill repeals the existing section 92A legislation and replaces it with a “notice and notice” system which copyright-holders can then use to go to an Internet service provider which has the power to ultimately go to the tribunal to ask for penalties for repeated copyright infringement. 
I think it is important to remind this House that the Green Party was the only party in this House to oppose the section 92A nonsense at every stage. We offered amendments in an attempt to fix it. 
I acknowledge that significant improvements were made to this bill in the select committee. Those changes included clearing up the definition of “Internet service provider”; excluding universities; limiting the scope to cover only file-sharing technology not one-offs from email or websites; and amending rules so that Internet service providers are no longer required to consider whether to accept challenges reject them or refer them on to rights-holders. All challenges are now passed on to the rights-holder. 
It is good to see that there is a Supplementary Order Paper from Minister Power on the Table addressing section 122MA which is the “guilt on accusation” section. However the financial damages include a punitive element and are not merely compensatory. This is especially important in New Zealand where often we are at the end of US or European-based supply chains. We can wait months or sometimes years to get access to content that is freely available overseas. The introduction of a compensatory penalty or more controversially a zero-dollar penalty for infringing against international products that are not available in New Zealand may have encouraged rights-holders to provide digital content sooner to Kiwis. 
Internet account suspension as a remedy for file sharing was the big issue at the select committee and the one that many submitted on. Determined opposition was clear from independent groups and consumers as was the desire by rights-holders to wave this termination stick. The key question at the committee was whether suspension of a person’s Internet account for copyright infringement was a needed deterrent tool that would however unlikely actually be used by copyright-holders or whether it was an ineffective tool—as David Farrar put it “an unproportional response and a bad precedent.” 
In the end the select committee reached a compromise whereby termination was drafted into law as a remedy but available only if the Minister enacted it in the termination clause. I like compromise and the idea of parties working together towards a solution so I was initially very keen on it. But in the end after really searching within myself I came to the conclusion there was no way Parliament should be drafting into law something so disproportionate to the problem. It will not stop the pirating of copyright material and it could take away people’s access to the Internet which in today’s wire world is I believe a human right. 
We should remember that file infringing is a civil offence not a criminal offence. Often people are sharing files because they are simply not available in New Zealand because of the antiquated distribution system of the global behemoth that uses it to extract as much profit as possible. We should also remember that net profits have increased in the digital age for many film and music industry players and only certain distribution channels have dropped precariously. 
Ultimately I think termination should never ever be written into legislation. We believe it sets a bad precedent is disproportionate to the problem and will not solve the issue. The Green Party asserts that there is danger in heavy-handed regulation for a problem that may be only temporary and a result of new technologies upsetting traditional business models. The use of fines rather than Internet suspension is a more appropriate sanction for file sharing and I believe that punishment should be proportionate to the offence. Citizens are not denied the right to use a telephone just because it happened to be used in the commission of a crime and this legislation should not set any precedent. Access to the Internet has become a necessity in an era where more and more public services are provided only online. 
An additional risk from the select committee’s compromise is that far from a compromise it is likely to be just a delay. We cannot support this being written into law. The compromise deal reached to secure the Labour Party’s support avoids responsibility and passes the decision on to the Minister. Parliament should be the determiner of this not the current or a future Minister no matter how well intentioned their comments. 
The Minister who obviously supported termination in the original bill will now likely face an intense lobbying push by rights-holders keen to have this stick and wave it at Kiwis as soon as they can. As the Creative Freedom Foundation has pointed out this is not a solution. In fact it is a massive problem because there are no Government statistics about infringing Internet downloading in New Zealand. The decision will be made on lobbying. Internet termination will be enabled in Cabinet not in this debating chamber. 
In summary the Green Party thinks this bill is significantly better than its predecessor. We are glad to see the changes made in the select committee and we are happy that a compromise was made at the select committee so that termination will not be enacted immediately. However we believe it is just a delay and we cannot support termination being written into law. We support the three-strikes “notice and notice” system and believe notices and fines will be sufficient. Research commissioned by the New Zealand Federation Against Copyright Theft found that a notice from the Internet service provider would be enough to stop 71 percent of New Zealand young people further accessing illegal copies of digital files. 
We support Kiwi rights-holders and Kiwi artists and we think the use of notices and fines rather than Internet suspension is a more appropriate and proportionate sanction for file sharing. Access to the Internet is vital for engagement with our modern world and the Green Party will have no part in legislating it away from the people. Kia ora. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 I am pleased to stand to speak on the Copyright (Infringing File Sharing) Amendment Bill which deals with the concept of file sharing. In most cases the Maori Party would advocate that the art of sharing is a practice we endorse but in this case sharing takes on the more negative meaning—what is described as unauthorised sharing which I guess in street talk might also be called pinching or theft. File sharing is about the transfer of material usually music movies or software via the Internet between two points usually two Internet users. Sharing of copyright works often occurs without the authorisation of the copyright owner and that is illegal. This bill is to provide new enforcement measures against the unauthorised sharing of copyright material via the Internet. It aims to deter file sharing that infringes copyright deter and educate the public about the problem compensate copyright owners for damage sustained through file sharing by widening the jurisdiction of the Copyright Tribunal to award damages provide sanctions for serious copyright infringers and limit Internet service provider liability that may result from account holders infringing files. 
The Maori Party is happy to support this bill throughout its remaining stages. Our research tells us that the creative industries are being massacred by illegal sharing overseas and the same trends are very clearly starting to emerge here in New Zealand. We also know that there are an estimated 4698 Maori directly employed in the creative industries which are the most impacted by illegal file-sharing and that does not include people in indirect employment such as lawyers or accountants. Take for instance local performing artists such as Stan Walker Maisey Rika or Bic Runga. Like most artists they will be affected by illegal downloading and file-sharing. Illegal downloading and file-sharing has resulted in a loss of income for the majority of local artists and that has made it increasingly difficult for New Zealand artists to earn a living by making music in this country. That is despite the fact that excitement and interest in new local musical artists is higher than ever. Illegal downloading and file-sharing means that record copies are generating less revenue which in turn means that we have fewer resources to invest in new New Zealand artists. 
In our consultation with various Maori involved in the industry we were told it would be a huge drawback for copyright-holders to chase up infringement because most copyright-holders are people who work on their own with no infrastructure no administrative support and no coffers full of money to pay for the work required to do so. We were also told that no industry can sustain itself on a free model nor can creators make a living if what they create is free. The bill then goes a long way to deterring illegal file-sharing. Even from the limited and selective consultation process we have been through we know that Maori artists absolutely support this bill as they believe it will have a positive impact on the ability of local artists to earn a living as musicians. 
We note also the advice of the Recording Industry Association of New Zealand known as RIANZ. The association represents 60 major and independent record companies more than 1100 New Zealand recording artists and producers and over 95 percent of commercially released recorded music in New Zealand. It told the Commerce Committee that the direct impact file sharing has on the record industry and its recording artists including local New Zealand labels and artists is substantial. Sales figures for the New Zealand music industry including New Zealand and international artists show that for the period from 2001 to 2009 the total value of album and individual track audio sales dropped from $119 million to less than $70 million per year. That seems a staggering reduction in sales which essentially is at the core of the problem being addressed by this bill. 
There was also some heartening evidence during the select committee stage that some basic interventions could make a significant difference. Judge David Harvey shared the results of the Synovate survey  
Movie File Sharing Amongst Young New Zealanders 
 which found that more than 70 percent of respondents in New Zealand would cease infringing activities if they received a letter from their Internet service provider. All it takes is a good old-fashioned letter. This finding has been corroborated by a similar survey in France in 2008 which found that 90 percent of users would stop illegal file-sharing after two warnings from their Internet service provider. 
There are some other relevant issues we want to raise in the debate. As we know technology changes so rapidly that a bill such as this one could well be obsolete in a year or two as Internet sharks find new platforms and channels that get around laws such as this one. Vesting the entire Internet copyright issue in regulation will ensure that the rules for such offences can be changed quickly to keep up with the changing online landscape. 
Finally I will just touch on the two major changes recommended by the select committee that we believe do not support the general intent of the bill. We suggest that suspension is not proportionate to the crime as most people would cease illegal downloading after the first or second notice and it takes a particularly belligerent person to ignore three warnings from an Internet service provider. The second change is to allow lawyers into the tribunal. This defeats the whole purpose of this bill because a situation will inevitably arise where everyone will “lawyer up” at the tribunal hearings. All that will do is exacerbate the current problem that the cost of litigation exceeds the likely payout from taking someone to court. We do not support these changes recommended by the select committee. 
However we are supportive of the Government’s proposed Supplementary Order Paper which largely appears to be about clarifying arrangements with the Copyright Tribunal. We believe that it is a good thing that the Supplementary Order Paper clarifies that the Copyright Tribunal should not automatically presume that infringements of copyright have been committed by an account holder simply because of an infringement notice. In other words this is akin to the concept that people are innocent before the law until proven guilty so to speak. More important the Supplementary Order Paper helps to clarify the process and substance of a tribunal proceeding as it applies to this issue. It also amends the Copyright Act 1994 by increasing the number of members who sit on the tribunal from three to five. One might question the increase. We hope it is to ensure that the new member will have knowledge of tikanga Maori be confident in the application of Te Tiriti o Waitangi and be well informed about the implications of Wai 262—the flora and fauna claim. The Maori Party will support this bill. 
KATRINA SHANKS (National) 
: 
 It is my pleasure to take a call on the second reading of the Copyright (Infringing File Sharing) Amendment Bill tonight. It is interesting to note that this bill repeals section 92A of the Copyright Act 1994 which was introduced under the leadership of Judith Tizard of the then Labour Government. We talk about technology and how fast it moves and we know that since 1994 technology has moved extremely fast. What was relevant then is not necessarily relevant now. It is important when we are looking at legislation around technology—for example this bill which is very narrow; it is about file sharing—that we get legislation that can stay true for a period of time and will not be outdated. It is more principle-based I believe and that is the way it should be in order to ensure it stays current for a longer period of time in a very fast-changing environment. 
The Commerce Committee worked really hard on this legislation I have to say. The select committee had it for a long time. In fact I felt very sorry for the officials when they first came in. I think I am relatively savvy when it comes to computers but when it comes to file sharing my generation does not know much about it; it was not around when I first started using computers. It actually took them a while to explain file sharing to a few of us on the committee. It came down to having little boxes in front of the select committee and the officials would explain that a bit is taken from this box and a bit from that box—a bit from this computer—until there are a thousand little bits and they make up a file. It takes a bit to get one’s mind round it. 
Hon Steve Chadwick 
: It does. 
KATRINA SHANKS 
: That is right I say to Steve. It took a little while for the committee to get its mind round what this bill was about. At the end of the day the committee came to a compromise. We had a huge debate over how we discourage file sharing and how we ensure we are not over-regulating or over-penalising people who file share. But it is really important to remember that file sharing is actually an illegal activity. We talked about two things. One was Internet service provider warning notices. An Internet connection provider such as Telstra or XTRA would give customers a warning if they think they have committed a breach and have been file sharing. One can then get a second warning and a third warning. We also talked about it being about not just breaching it but knowing that one has breached it. A whole generation out there is coming through that does not understand that file sharing— 
Jonathan Young 
: Don’t care. 
KATRINA SHANKS 
: Or they do not care but I do not think that is necessarily true. They do not realise that what they are doing is illegal and is not right. Out there we have peer-to-peer file-sharing programs. One can put a software program on one’s computer and file share. What is wrong with that? I have three children who are on the Internet all the time. I do not know whether as a parent I would be able to find out whether they are file sharing. I like to think they are not and I like to think we have educated our children about it. But until I had this legislation before me at the select committee I did not know about it I have to say. It is quite different from breaching copyright where someone sends someone else a file. That is different again. If someone sends someone else a file they may be breaching a copyright as opposed to what this legislation is about which is peer-to-peer file-sharing programs. I think it is important to educate the many kids out there. Ohariu the electorate where I live has very high usage of computers especially by youth. It is really important that we educate our youth and their parents about what file sharing is and educate them that we should not be doing it. It is different from breaching copyright and we must bear that in mind. 
I am looking forward to debating this bill further in the House in the Committee stage and the third reading. Thank you very much. 
JACINDA ARDERN (Labour) 
: 
 It is my pleasure to stand and add to the very sound comments that have been made by my colleague Clare Curran who I want to acknowledge through this process has made a really significant contribution to this debate. I think we all have to acknowledge and I would like to see it acknowledged by Government colleagues that the original version of the Copyright (Infringing File Sharing) Amendment Bill was drafted by the previous Labour Government and it was supported by the National Opposition. We have acknowledged on this side of the House that we did not get this legislation right in its original form. We stand up and we own that but we have not seen that kind of ownership on the other side of the House. I have some comments for the Green Party on its position but I will leave those for later on in the discussion. 
I think we should all be up front here. There is one word to describe this legislation through all its iterations and that word is “fraught”. This has been a delicate balancing act between two very important fundamental rights particularly from the perspective of Labour members of Parliament. On the one hand there is the issue of how to deal with the rapidly changing world and we on this side of the House absolutely value the importance of having the freedom to access information and to access our creative industries via the Internet. That was very very important to us from a social and a democratic perspective and it was something that we wanted to protect. But secondly we wanted to protect the right of creatives in particular to protect their intellectual property. That is a fundamental issue for us if we are to have those people who work in the creative sector continue to make a living out of what they do. I have a few other comments to make on that further down the track. 
At this point I want to declare an interest. As Labour’s associate spokesperson on arts culture and heritage I have a direct interest in making sure that we protect our creative sector and everything that it contributes to New Zealand from a cultural perspective. That includes music films the screen industry and all iterations of our creative sector. So at the top of my mind when looking at this issue has always been how to balance the sector’s needs with our overriding need to ensure fair and equitable access and access to justice in considering whether someone has infringed upon someone else’s rights. But let us be clear on this: not all creatives have sat in the same boat on this issue. I have had many come to me and say they acknowledge up front that the future of their industry has changed and they are embracing that change and they want people to be able to freely access their work. But at the same time we had the flipside where other creatives acknowledge that there was still an element of industry for them to be able to access. 
Folk on the other side of the House are holding up signs at me and my eyesight is clearly going because I cannot read them. Perhaps Katrina Shanks will flash the sign again so that I can see it. It says: “Have you ever file shared?”. I am happy to answer that question directly for the member. To the best of my knowledge I have not. What I will say and this is where I will sound like a Pollyanna is that I have always had a problem with the downloading of New Zealand music in particular because I know New Zealand musicians. I know that they struggle to survive in the industry in New Zealand and the last thing I want to be doing is stealing from them. That is how I always perceive them. 
Clare Curran 
: Support and fund them. 
JACINDA ARDERN 
: That point is well made by my colleague. We have a dual role here not only in protecting their interests but also in supporting and fostering their industry. That is another debate and if Chris Finlayson was open to having that discussion I would like to discuss for instance his current bent on funding the classical arts rather than some of our more modern arts but that is for another day. 
I want to quickly run over the on-notice process and how it will work because there are a couple of elements in there that I want to clarify. We have already talked about the fact that copyright owners who can provide evidence of infringements will be able to request Internet providers to tell their customers to stop printing material. It is implicit that it will be the likes of the Australasian Performing Rights Association and the Recording Industry Association of New Zealand that will be taking this action. It is unlikely to be individual copyright-holders just because of the very nature of the costs that may be involved in this. That is something that this House must monitor. We must monitor the access that people have to this process. The first notice will inform the account holder that the infringing activity has occurred and that it is illegal. A second and third notice may be sent if an account holder ignores notices and continues infringing. If the account holder continues to infringe then the copyright owner may seek a compensation award of up to $15000 at the Copyright Tribunal. I raise the point that someone on Twitter with me this evening called this bill the “Guilty Until Proven Innocent Bill” and I could see why they may give a label like that to this bill. That descriptor does not impart the account holder’s right of rebuttal against an accusation. I understand that new section 122MA is clarified by the Minister of Commerce on Supplementary Order Paper 230. I hope that we will go over that in greater detail in the Committee stage to clarify that there is a right of redress for an account holder. 
The bill as introduced provides that copyright owners can seek the suspension of an Internet account only through the courts and that suspension can be for up to 6 months. This provision remains in the bill but will apply only until the Minister brings it into force by an Order in Council. That is an important point. The Greens and Labour do not like this provision. We do not fundamentally believe that a right to suspend someone’s Internet account should be contained in this legislation. But I make this point to the Greens: they know full well that had Labour withdrawn and said that we would not support the bill in its entirety we would have the original provision sitting in this legislation now and the right to suspend an Internet account holder’s account would have existed from the moment the bill is enacted. This was a compromise. Although we stand against the provision the bill could have been a lot worse had Labour not sat down with the Government and negotiated a much more palatable arrangement. We could have taken the high and mighty stance and stood back and said that we disagreed and as a result we would have come back with something that I think a lot of people would have seen as being as unpalatable as section 92A potentially. So we did compromise and we are standing up and acknowledging that but at the end of the day we think that as a result of that negotiation we have a better outcome for both sides of the argument on what I continue to believe is a very very fraught issue. So that is a point of clarification that I wanted to make. 
I have some final parting thoughts. I notice from some of the statements made at the Commerce Committee that a lot of weight has been placed on the idea that infringement notices will rectify this situation. I want to acknowledge that we cannot be too naive in the implementation of this bill. So my first point is this: just because it is law does not make it so. Just because we have in this House written this piece of legislation does not mean that from day one tomorrow people will stop file sharing. We will have to enact this bill and act on the provisions in this bill if we are to protect the rights of copyright-holders. So education will be important. 
Secondly and very importantly for the sake of our creative industries we as policy makers and as a Government and Opposition have a responsibility to work alongside the creative industries as they navigate this changing world. There are two things I would recommend to the Government in this regard. First if we are to support our creatives in order to find a way to continue to make a living and survive in their area of work we should not cancel the Pathways to Arts and Cultural Employment programme which I know the Government is considering via Work and Income. Retaining that scheme is one way that we can work alongside our creative industries to figure out how to manage this changing world and how to make money out of creative industries which ultimately benefit all of us our communities and our cultural sector. Secondly the Government should open the doors to the Trans-Pacific Partnership agreement. That is the biggest threat facing our intellectual property holders our creatives at this present time. If the Government opens the doors it will show all of us that we have nothing to fear but currently I think the fact that the doors are closed means that we absolutely do. 
MELISSA LEE (National) 
: 
 I would like first of all to thank the member who just resumed her seat Jacinda Ardern for her admission that Labour got it wrong with section 92A. 
I rise to support the Copyright (Infringing File Sharing) Amendment Bill through its second reading. I recognise that the previous speaker referred to herself as a Pollyanna and I think a Green member called himself a geek. I will not go as far as that but I will follow in their footsteps and call myself creative. I will put myself in a little box like those members have. 
Ms Ardern has just made the admission that Labour got section 92A wrong. She went on to say that we should also do so. I am a little bit confused as to why we should do that. This National Government is trying to fix a problem that was created and caused by Labour and the Internet Blackout week in New Zealand was a result of the Labour bill the Labour law. This National Government decided not to enact it because there was an outcry over section 92A. We went to the public for consultation and this bill is the result the outcome of the consultation process the first reading and the select committee process which I have to say was quite long. 
I appreciate the Opposition’s support for this bill because I also struggled with this issue. I have come from the creative sector and I see the benefit in both sides of the argument. I know that there are some brand new creatives out there both singers and movie makers who struggle to get noticed and often put their creative movies or music online and it goes viral and ends up getting noticed. That is not quite the file sharing that we are talking about here but I ask members to hear me out. 
The Korean movie industry the huge Korean wave which earns billions of dollars came about as a result of viral file-sharing copyright infringements in other countries like China where people downloaded movies and copied DVDs and now it has become a humungous industry that makes a lot of money for Korea. Even in New Zealand I know that there was a Chinese students’ group that put their drama online because they could not get anybody to make it. They virally spread the news and were so successful that it was picked up by a channel and it even went to China. 
I see the benefit in promoting these creatives online and possibly supporting the file-sharing issue. But the industry needs protection. I have come from the sector. I do not know how many other members on the other side of the Chamber have had the same experience but as a fledgling screenwriter I know how long it takes to develop an idea come up with a script get that script to a producer and get funding for something to be made. It costs time and a lot of money for that process to reach fruition and for that movie or piece of music to be made. 
I know that Steve Chadwick talked about the copyright issue. The piracy issue is big but that is already protected. But this whole copyright file-sharing issue is not done unintentionally; it is done intentionally because we have something called the Internet. The development of fast Internet means we have a major problem on our hands. People download the software to share with their friends. It is not like me buying a DVD giving it to Steve Chadwick and saying I am sharing the DVD—I cannot do that. I can purchase a video and share it with a friend and I can buy a piece of music and share it with a friend. That is quite different from this. This is about people intentionally going to something like Torrent and downloading the file-sharing software intentionally knowing that they will infringe copyright. 
Katrina Shanks talked about little boxes on the table as a way of understanding how this works. Even though I worked in television even though I worked in the film industry I had no idea how this peer file-sharing thing worked. I am in that generation as well. I had to learn what this was about. It is incredible how they do it. They download the software and they put it up. There is Internet chat about it. Young girls and young boys teenagers—and I am not blaming the teenagers mind you—basically put up on a chat site a comment like: “Anyone know how to download the latest movie?”. I will not mention what it is. They start a chat line. They help each other to download movies that are not even released here in New Zealand. So they are breaching copyright and they do it through Internet file-sharing which should be illegal. I am very pleased that we have had to deal with this because apart from helping us understand what this issue is all about we will be able to monitor our children and our families and prevent them from breaking the rules. 
As I said this is very very different from getting a DVD and sharing it with a friend. I think it was a Maori Party member who talked about the fact that the recording industry has lost a lot of money. I know for a fact that from 2004 to 2009 the income the recording industry derived from sales actually halved. That was due to file sharing—through illegal copies being shared among friends. With the advent of faster Internet and with broadband becoming more available movie industries are also in major trouble. I support the bill and I look forward to the Committee stage as this debate continues. Thank you. 
RAYMOND HUO (Labour) 
: 
 I rise to take a call on the second reading of the Copyright (Infringing File Sharing) Amendment Bill. Before I start I wish to acknowledge the great efforts put into the bill by the Minister of Commerce the Hon Simon Power and also the Hon Lianne Dalziel the wonderful chairperson of the Commerce Committee. The issue of file sharing is not easy. The bill is a great compromise. I also thank my learned colleague Labour’s communication and information technology spokesperson Clare Curran. Her press release dated 3 November 2010 was so good that it has been well read by stakeholders and interested parties. 
Due to a last-minute compromise between Labour and National no New Zealanders will have their Internet connection terminated as a result of the proposed new copyright laws. The compromise means that the provision for termination of Internet access as an ultimate penalty for repeat copyright infringement remains in the bill but cannot be enacted unless the Minister makes the decision to do so. The Minister would have to enact the termination clause by Order in Council which puts the onus on the creative industries to prove there is a case to terminate access on the Internet service providers to ensure that the system of providing deterrent notices to copyright infringers works and on the Minister to ultimately make the call. Without that compromise Labour could not have supported the bill. The compromise is important realistic and well warranted but I acknowledge the points raised by Mr Gareth Hughes and I look forward to seeing what his amendment has to offer at the Committee stage. 
I agree that we are dealing with the real world and with reality. In this world in our modern daily lives Internet access is fast becoming as necessary to us as the provision of morning or evening newspapers or as important as television cellphones water or electricity. 
The purpose of the bill is to establish a regime that deters file sharing that infringes copyright to educate the public about the problem to compensate copyright owners for damage sustained from copyright infringement by file sharing to provide sanctions for serious copyright infringements and to limit Internet service provider liability that may result from account holders’ infringing activities. The bill is largely about education and deterrence. 
Much has been said about the controversial section 92A and the widespread objections it has attracted. Some submitters at the select committee hearing described the section as one of guilt upon accusation. The bill repeals section 92A and replaces it with a three-notice regime backed up by a $15000 fine and a 6-month Internet suspension. Minister Power described the three-notice regime as the major feature that educates the public about illegal file-sharing and that provides effective methods for copyright owners to enforce their copyright. The bill ensures that infringers are given adequate warnings that unauthorised sharing of copyright works is illegal. The three-notice regime despite its gentle name seems to have won wider support as an effective mechanism. It is believed to be more effective than the much-hyped three-strikes regime. 
Following Judge David Harvey’s wonderful submissions he informed us that a survey in France in 2008 found that 90 percent of users would stop illegal file-sharing after two warnings from their Internet service provider. Judge Harvey also made available a copy of the 2008 Digital Music Survey conducted by Entertainment Media Research in the UK. The survey showed that 70 percent of users would cease infringing activities after one notice from their Internet service provider. In a local context the Young New Zealanders and Movie Downloading survey found that more than 70 percent of respondents in New Zealand would cease infringing activities if they received a letter from their Internet service provider. 
I thank Judge Harvey for his contribution. I remember my early university days in Auckland when I had the privilege of studying information technology law under Judge Harvey. The classes started at 8 o’clock in the morning and Judge Harvey who is always energetic and thoughtful would have to rush to the city campus of the University of Auckland and 2 hours later rush back to the District Court in Manukau. Judge Harvey is New Zealand’s most tech-savvy jurist. His submissions enlightened me and the select committee and I thank him for his great contribution. 
Submissions from TradeMe Two Degrees Mobile Ltd the New Zealand Film Commission InternetNZ Computerworld and the University of Auckland were good too. The University of Auckland in its submission raised some important issues. It had two serious concerns among others. The first concern was that the bill as worded is not consistent with the explanatory note. The university’s second concern was that if universities libraries schools or similar organisations are excluded from the definition of Internet service providers then they are potentially liable as account holders. 
I note that the Commerce Committee report recommends that the term “ISP”—that is Internet service provider—be replaced by the new term “IPAP” which is Internet protocol address provider. I look forward to discussing the matter in more detail and more specifically relevant amendments to the Act such as to sections 92 29 and 122 at the Committee stage. 
Labour is prepared to support the bill through its remaining stages due to a compromise we have reached with National as was explained by my learned colleague Clare Curran who took the first call on behalf of Labour. The compromise means that provision for the suspension of Internet access as an ultimate penalty for repeat copyright infringement remains in the bill but cannot be enacted unless the Minister makes the decision to do so. Labour’s preferred option was to completely omit the provision for account suspension because it is Draconian unnecessary and would not work. The provision for account suspension remains in the bill and could theoretically be used in the future but any Minister who implements termination would have to wear the consequences. Rather than oppose the bill outright we prefer to compromise to ensure that New Zealanders are not denied access to the Internet which is something that many people rely on heavily nowadays. Thank you. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I must admit that New Zealanders must wonder at times about the huge quantity of laws that we create. As a child I could never understand how Parliament could full-time create law after law until I realised that because society and in particular technology changes in many regards opportunities or technologies are created that then demand that regulation wraps around them in order to bring some order. What we are experiencing today as we look at this copyright infringing law is essentially the future meeting us. These are the sorts of things that people wrote about in times past and today we are facing the challenges of legislating for that. When we think about it we remember that Leonardo Da Vinci drew helicopters and that Jules Verne painted a word picture of submarines. Do members remember  
The Terminator 
? I am sure they do. The computer system— 
Clare Curran 
: “Hasta la vista baby.” 
JONATHAN YOUNG 
: Yes! In that film a computer system called Skynet ruled the world. It was like the Internet today. The Internet creates so many opportunities but also along with those opportunities comes the infringement of people’s rights. This legislation is about bringing some order to the chaos that surrounds the globe because of technology. 
It is really interesting to consider this technology of peer-to-peer file-sharing. A gentleman called Yochai Benkler wrote a book called  
The Wealth of Networks 
. He said: “What is truly unique about peer-to-peer networks as a signal of what is to come is the fact that with ridiculously low financial investment a few teenagers and twenty-something-year-olds were able to write software and protocols that allowed tens of millions of computer users around the world to cooperate in producing the most efficient and robust file storage and retrieval system in the world. No major investment was necessary in creating a server farm to store and make available the vast quantities of data represented by the media files. The users’ computers are themselves the ‘server farm’. No massive investment in dedicated distribution channels made of high-quality fiber optics was necessary. The standard Internet connections of users with some very intelligent file transfer protocols sufficed. Architecture oriented toward enabling users to cooperate with each other in storage search retrieval and delivery of files was all that was necessary to build a content distribution network that dwarfed anything that existed before.” 
We have to say that the people who did that were brilliant—teenagers and young 20-something people. Of course we know that when we look at the Internet today we can see the people who started Google Facebook and Microsoft. They were just going to university or were just out of university—and some of them were not even there—yet their brilliance created those systems and opportunities. But what we face today is the fact that people use this technology without respect for the rights of others particularly as we have said in relation to the creative sector of our society which we all appreciate. We all enjoy movies. We all enjoy the music and the art that is created. We all enjoy the ideas that writers can portray. How accessible are they today? Well it is absolutely amazing. Yet through of all this ability to access information through music audio and video files—all of these things—there is not yet coming with it the sense of responsibility with regard to ownership towards those who originated the works. The economic impact of the ability to file share is huge. 
In 2004 an estimated 70 million people participated in online file-sharing according to a CBS News poll and that is an international figure. Nearly 70 percent of 18 to 29-year-olds thought that file sharing was acceptable in some circumstances and 58 percent of all whom they surveyed who followed the file-sharing issue considered it acceptable in at least some circumstances. That meant that the total value of music sales dropped globally from approximately $38 billion in 1999 to $32 billion in 2003 which meant that a tremendous amount of money was no longer available to those people who had created the music. 
A survey in June 2009 here in New Zealand of 1000 New Zealand Internet users between the ages of 18 and 70—which is a wide range is it not; it is a wide age range—found that every respondent had downloaded copyrighted material at least once in the previous year. It is a common thing that has been happening in our society; legislation is catching up with it to bring a sense of fairness in the market place. 
There are people out there who desire to make a living out of the gifts and abilities they have. That is a wonderful thing and we want to support those people in it. I remember a person who came to the select committee: Anna Cahill the executive director of the Screen Directors Guild of New Zealand. She said that one issue the select committee should understand is that the industry all around the world is grappling with trying to find a new model that works both logistically and financially. At present no one model works but in the future there will most likely be an efficient model such as iTunes. I probably think that iTunes does work and is quite good. She said that in the meantime piracy was laying waste to the livelihoods of many people. 
I was able to converse with constituents from the wonderful electorate of New Plymouth in Taranaki—we call it “Taradise” for obvious reasons. One constituent said to me: “I would like to comment on the recent drafting of the Copyright (Infringing File Sharing) Amendment Bill. This includes a new section 122MA that states ‘an accusation of infringement is conclusive evidence of infringement.’ This means guilt on accusation and is clearly contrary to the principle of innocent until proven guilty. The commentary to the bill says ‘this is to have a fast-track system for copyright owners.’ This is not what law is for. The law should be set to provide justice and fairness.” I thank Peter very much for his comments and input into the process. 
I am pleased to say that the Supplementary Order Paper that has come to the House states—and we will no doubt discuss this further in the Committee stage—that it will omit the phrase “an infringement notice is conclusive evidence of the following:”. It will substitute that with the phrase “in relation to an infringement notice it is presumed—”. I was able to say to my constituent that the preciseness of matching infringing IP addresses to account holders at precise times is a bit like an electronic DNA. However once an account holder provides evidence or reasons why a presumption is incorrect it is then the responsibility of the rights-holder to prove that the presumption is correct. I think that we are making forward progress in a very difficult complex but exciting area. Thank you. 
Amendments recommended by the Commerce Committee by majority agreed to. 
A party vote was called for on the question  
That the Copyright (Infringing File Sharing) Amendment Bill be now read a second time. 
Ayes 111 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 5; Maori Party 4; Progressive 1; United Future 1. 
Noes 11 
Green Party 9; Independents: Carter C Harawira. 
Bill read a second time. 
In Committee 
Part 1 Infringing file sharing 
KATRINA SHANKS (National) 
: 
 It is my pleasure to take another call tonight and continue this debate on the Copyright (Infringing File Sharing) Amendment Bill at the Committee stage. When I spoke earlier I said this was a difficult—oh our officials have joined us. I acknowledge them for the hard work they put into this bill for the patience and perseverance they had with some of the Commerce Committee members in coming to terms with what file sharing is and for the displays and the enthusiasm they showed in trying to get us to understand how when someone file shares they can get lots of little bits from everyone else’s computers pull it all together and that is the file that is shared. It takes a bit for someone who was not brought up in the generation of file sharing to understand it. Even though I had a computer in the first job I had so I have always worked with computers technology changes. It shows just how fast people are left behind. My children would love to hear me say that. I always tell them I know exactly what they are doing all the time and that I am like Big Brother and they cannot do anything I do not know about. In fact they can do a lot I do not know about and what scares me is what I do not know. It is until we have legislation like this in front of us that we actually become aware of how fast technology moves and how fast we can get left behind. 
In earlier debate I talked heavily about the Internet service provider warning notices and how the committee had a big debate on that and the provision to terminate or suspend someone’s account with an Internet service provider an Internet service provider like Telecom or XTRA if they broke the law and did some file sharing. I do not think people can accidentally file share—that is the thing. If people are going to file share they have to have the file-sharing programs. They cannot accidentally share someone else’s files unless they have the software on their computer. To do that they have to have made a decision as to the type of system they themselves will use to obtain files. I do not think people understand it is illegal to file share. If people do it they are undermining the musicians the artists and everybody else because they are not legally paying for the file they are receiving. 
It is interesting how software develops over time as well. It is so common and I had no idea that the software was so common. I did a little search on Google on Jonathan Young’s iPad beside me. In fact that is technology in itself. We had a good talk about the use of wireless locations especially down at the Wellington waterfront where there is free wireless Internet. If someone has a laptop down there a free wireless connection is available. Someone could be using third-generation technology for example—well third-generation is not quite right but someone could be using the wireless connection down there and could be logged on to someone else’s system. If that person shared some files illegally who is liable for that? Technology is moving so fast and now people joke with me that I do not have an iPad but just a little old laptop that takes about 20 minutes to open. When I am still waiting to log on the guys beside me have instant emails on their iPads and they say: “What’s that old thing you’ve got there—that old big box?”. Of course it is a laptop that normally takes 20 minutes to log on. They have done all their work and have gone. 
Technology has changed and it is hard to make legislation that does not age fast but stays current. That is why I am a big advocate of principle-based legislation where technology may change but the principle stays the same in respect of what the legislation is trying to achieve. It was really interesting to talk about what youth are doing how we can educate them on what they can and cannot do with their computers what the most effective way to do that is and the campaigns we can run. How many users are aware that what they are doing is right or wrong? It is really hard to be heavy-handed to begin with and to say we will terminate or suspend an Internet connection on a first offence or a second offence when users have to learn what they can and cannot do and what their boundaries are. So what do I and other parents do in Ohariu which has one of the highest levels of Internet use in the country? What do we do when a parent has a child who is file sharing and that parent like me is not quite aware of what file sharing is and then all of a sudden that parent’s Internet connection might get suspended? Well that is really good! So that parent will talk to the child and try to educate them but then the child may try to sneak something past the parent a second time— 
Jonathan Young 
: You could smack them! 
KATRINA SHANKS 
: I am not even going to repeat what that member said to me about what he would do if the child did it a second time. If the child did it a second time once again the parent could go in and say: “You can’t do this. We are going to lose our ISP.” If it happens a third time the connection could be terminated and the whole house is affected. So there is a line and a balance between what is right and what is wrong and where the legislation can provide for suspension of an Internet connection. The situation will be interesting and we will watch it really closely. We will watch it and the stakeholders will watch it. The Ministry of Economic Development will work on it and watch it over a period of time to see whether we can get some change just through education and issuing notices. It will be really interesting to watch. 
My colleague Jonathan Young talked about a survey that was done and I want to talk through some of the statistics that came out of that survey. This survey was done by TelstraClear of 1048 Kiwi Internet users aged between 18 and 70 like Jonathan Young was saying. When we are talking about such a wide range of people we have to wonder about what type of software they have on their computers and what they are aware of and what they are not aware of. I know that my father-in-law for example is very computer-aware but I also know that siblings come in and fiddle around with his computer. They load software on it and put their own little fixes on it when it falls over. I am sure he is not always sure about what software he has on his computer and I think the same thing happens even for my generation. My son tries to do fixes on my personal computers—not my work computers Parliamentary Service will be pleased to know. He tries to do fixes and goes through a backdoor which I always assume requires him to take screws off and undo the back of it but obviously he does not. It is like an information technology backdoor that he talks about which I have no idea about. It is hard to know what type of software we have on our computer at the end of the day. 
The results of the survey are even more interesting: 46 percent of households interviewed had peer-to-peer file-sharing software on their computer. I thought that was a huge percentage—I could not even imagine 46 percent of those people interviewed knowing what peer-to-peer file-sharing actually was. The survey said 48 percent believed that the prospect of being caught by police and fined was the most effective legal tool in trying to deter copyright infringers. That is pretty harsh but it is interesting they thought that. The disconnection of broadband for repeat offenders was thought to be effective by 43 percent and I would think that is where most people would be. For more than 50 percent neither measure was significant enough to stop illegal downloading. Music was the most copied content at 82 percent followed by software at 49 percent movies at 35 percent and games at 31 percent. Those interviewed thought that content copying was widespread and most planned to do it only occasionally. The survey said 32 percent claimed to copy music more than once a month while 23 percent used iTunes a legal online source. It is interesting to see the types of statistics that emerge when Internet users are surveyed on what they are doing and what they are not doing. 
This legislation is a good step in the right direction. We have a compromise. The Commerce Committee worked hard. It is important we have principle-based legislation so that it can move with the times and is not caught up in the very fast-moving environment we are in. Nobody knows what is around the corner. This legislation is a step in the right direction. If it is monitored closely and is ensured to be working effectively then it will stay in place for a period of time. Thank you. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I would like to take this call as one of a number I hope in the Committee stage of the Copyright (Infringing File Sharing) Amendment Bill. There are many things to talk about so I will start with trying to get to the heart of the issue as I see it for Labour which is the suspension issue and whether people’s Internet accounts should ever be terminated. That is something that Labour feels very strongly against. We are supporting this bill because we have reached a compromise where although termination remains in the bill it will not be enacted unless it is enacted by an Order in Council. 
Before I talk about that I will just put it clearly on the record that Labour absolutely supports our local artists musicians and creative industries whose successes have shaped New Zealand and the very face of New Zealand inside our country and internationally. It is really important to put that on the record because a number of speakers have mentioned the importance of our creative industries. But I will also put on the record that it is important to support them not only in words but also in deeds. That means supporting our public media our public broadcasting and our public creative industries. Unfortunately we are not going in that direction in this country at the moment; we are going in the other direction by making cuts to them. The cut to TVNZ 7 is probably one of the most significant cuts in terms of funding for a new digital channel in our new digital environment. That is where we should be putting our investment but unfortunately we are not. 
I will read to members from one of the submissions brought before the Commerce Committee. Before I do so I acknowledge the extraordinarily committed dedicated and intelligent hard work done by the officials during the debate. There was an awful lot of debate in the select committee. Some new cutting-edge issues were discussed. Although some of the members around the table had a bit more of an idea than others about what was being talked about at times the officials were very patient. I acknowledge the work they did by coming back over and over again with more analysis and more definition around some of the issues. 
I will give members a picture on the issue of file sharing. I will be honest; one of my colleagues came to me recently and said she wanted to get access to a piece of music—her favourite song. She has loved the song for years and cannot buy it anywhere. She does not know where to find it. She had tried everywhere. It is not on Amazon and she cannot get it in a shop. She does not know how to get the song. She asked me what she should do. I asked her whether she had been on the Internet and looked for the song. She said she had but that all these file-sharing sites kept coming up. I said I would ask for some advice. The advice that came back to me was that because the song is not sold anywhere any more—it is not available in any shop—the only way to get it is to go to one of the BitTorrent sites and download it illegally. My colleague would not and did not do that but that gives us an idea of why so many people are file sharing. They are downloading content illegally in an environment where they cannot get access to material because either it is not available in any other form or it is not available in their jurisdiction because the material has not been released. That is unacceptable and it demonstrates flawed business models across the industry that are not responding to consumer demand. 
I asked of every submitter who came before the select committee who represented a rights holder whether they had a business model in train to enable people to file share legally and the answer was no. Essentially that is a failure of the market and it is the reason why we are looking at this legislation today. The bill is putting in place a regime to hopefully educate people to cease the file-sharing activities that are being talked about—70 million items are being downloaded illegally. The only problem is that the alternatives are not great. That is one of the core issues. 
I will read to you from the submission— 
The CHAIRPERSON (H V Ross Robertson) 
: The member is referring to the person in the Chair when using the word “you”. 
CLARE CURRAN 
: My apologies. I wish to read to the Committee the introductory points from the submission of InternetNZ. InternetNZ is an organisation that could be described as being very future thinking. It represents many in the industry who are Internet service providers but also people who are passionate about the Internet. InternetNZ is what one would describe as a moderate organisation as well as being future thinking. The submission stated: “This Bill is a major improvement on the legislation it seeks to replace. Infringing file sharing is happening (and cannot be condoned) but it is important to consider the effects of it before deciding how to tackle it. The copyright content industries are doing exceptionally well given the global economic situation. Sales are up and more money than ever before is going to Kiwi artists. This success shows that file sharing is not having a damaging impact on the industry and that the evidence presented to that effect has been deemed unreliable by among others the United States government. Because the impact of file sharing does not seem to be major Parliament should not take major complicated and expensive steps to address it. It should not allow the content industry to seek aid in propping up an unsustainable business model. The best way to tackle file sharing would be to impose a notice and notice regime where those found infringing get told their activity has been picked up.” 
That submission was reflective of a number of submissions. The Creative Freedom Foundation is another organisation that started its submission by stating: “We support the purpose of this Bill. Changes in technology that have made copying easier have led to the need for new copyright enforcement processes that are effective for artists as rights holders while maintaining due process protections.” 
We had a number of submissions from reasonable organisations in a future-thinking space that said that some enforcement measures need to be in place but that they need to be very moderate. We need to address the fact that there are flawed business models and that the Draconian measures of termination or suspension—whatever we want to call it—are overreacting to the size of the infringement. That is essentially the basis for the opposition to the termination or suspension of accounts as a remedy for file sharing. It is disproportionate to the problem. It will not solve it because ultimately we are still left with the issue of where people can get their content legally. There are places on the Internet where people can get their content legally but unfortunately many of those places require users to sign up. Those business models are starting to emerge but they are not by any means available right across the industry. They are not available to most ordinary people in New Zealand. 
Another very good example of absolutely getting to the guts of the issue—and which I mentioned in my first reading speech—was the movie that I think won the Oscar— 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 Thank you Mr Chairman. While you are in the chair Mr Robertson I congratulate you on your promotion to Assistant Speaker. 
It is a real privilege to speak on the Copyright (Infringing File Sharing) Amendment Bill. I acknowledge like my colleagues have done the officials and the work they put in on the bill. The bill has been difficult in terms of balancing the competing interests. The stakeholders were quite passionate shall we say about their respective views and opinions. 
The bill is about balancing the rights of property rights holders—and they are intellectual property rights—with as many speakers have already pointed out this evening the developing and changing technologies that are inherent in this technological age particularly around the use of the Internet. The bill is about protection of property rights. Although intellectual property rights are not tangible and cannot be held in one’s hands some submitters compared them with those of owners of private property of landowners of people who have private property rights that we clearly understand. 
In trying to protect these property rights we must understand that investment research and development resources time and energy have been put into developing them. In particular the creative industries put in a lot of time and resources and a huge amount of risk is involved. There is a risk in terms of putting moneys up front developing a product a service or a technology then seeing how that product is taken up by the market. If that product cannot be fully capitalised on in terms of its return then questions arise. That was the original intent of the legislation in 1994: to protect intellectual property rights holders particularly those in the creative industries and to balance that against the developing technology. If we are going to have thriving creative industries we must have laws that not only protect those rights but make them enforceable in a court of law or certainly in a tribunal situation. 
The argument put forward by the creative industries was that suspension is vital as the ultimate sanction. One of the submissions talked about a number of high-volume online infringements by individuals. In such cases a three-strikes graduated response would in effect be useless superfluous and redundant. That submission was put forward in terms of why suspension should be the final sanction. In many reported cases infringements have been made by not just individuals but groups of individuals who have abused the file-sharing technologies that are out there. 
So that is on the one hand; on the other hand we heard from a number of Internet service providers. This point has not been raised this evening but they talked about the costs that would be imposed on Internet service providers in implementing this regime. It would involve millions of dollars. We heard from a number of Internet service providers and when questioned they went back to their respective organisations and made an attempt to quantify the cost of implementation. They came back and the figures were quite startling. The figures were in the millions. That put us as a committee on notice that the compliance costs of this regime which no one has mentioned as yet tonight are serious. A critical part of the consideration is that we do not over-regulate or the regime may be counter-productive to certainly our economy. 
One of the other reasons that suspension was advocated was that the option of termination would penalise not just a single user the transgressor of the copyright but also other users who are part of the network. For example where a teenager was the transgressor and the account was terminated that might affect not only that teenager but that person’s mother father siblings and other whanau or family members who are reliant on that account. Also the issue of suspension was seen as not just one of deterrence; that regime would educate those who were transgressing against the legislation. A notice regime was important in order to send a message a deliberate message if you like to those who had infringed to educate them that they were in fact breaking the law. I think that was an important part of the consideration of the Commerce Committee. 
I think the majority of us came to recommend the new section 122PA in clause 7 which in effect brings together a workable compromise on this issue. The bill’s provisions allowing for Internet suspension are retained and would come about only if evidence indicated that notices alone were not having the desired effect. In this instance the suspension provisions would be brought about by an Order in Council. I think that is a fair and reasonable compromise in terms of the dilemma we found ourselves in because the competing interests which were laid out by the various stakeholders in quite a passionate way were quite compelling—on both sides. 
I think we need more evidence to make a more informed and more reliable decision as to whether suspension is in fact to be implemented. I think my colleagues feel and certainly I hear from members opposite that that is a fair and reasonable solution. Certainly stakeholders of the industry will need to monitor it and cooperate with the officials at the ministry. I am sure that when the review date comes in the future we will have the evidence to suggest whether such a policy should be implemented. Thank you. 
Hon DAVID PARKER (Labour) 
: 
 I ask the Minister in the chair the Minister for the Environment what impact the negotiations in the Trans-Pacific Partnership agreement will have on the Copyright (Infringing File Sharing) Amendment Bill. The reason I raise the issue is that I have before me an article by Brian Fallow from the  
New Zealand Herald  
on 31 March. In it he starts with what we all know: “A balance has to be struck between on the one hand fostering innovation and creativity by protecting the fruits of such labours and on the other stifling progress”—and actually causing cost I would say—“by making it too difficult and costly to access and build on the discoveries of others.” That impacts partly on patents but also has implications in respect of copyright. 
I am one who firmly believes we need to protect the creative endeavours of the people who go to the effort to make creative content. Whether it is a new design a piece of music a piece of art or literary works in the form of poetry or a book the people who put in the effort should be able to protect that content and control its use in the future to a reasonable extent. The provisions in the bill relating to section 92 are predicated on current assumptions about the length of copyright. That section applies only if something is copyright. If it is not copyright then copying it via the Internet or any other means does not infringe anyone else’s copyright. No property right is being infringed. Therefore the length of the term of the copyright is fundamental to how this legislation works in practice. 
According to Brian Fallow the leaked text from the US negotiators in the Trans-Pacific Partnership includes this ambition on the part of the US: “The US also seeks to extend the term of copyright from the life of the author plus 50 years to life plus 70 years.” There are economic consequences of this change. Mr Fallow quotes a recent study by the Australian Productivity Commission which said conceding that change would cost Australia between A$70 million—NZ$95 million—and A$240 million. The consequences of the Government changing the underlying rules relating to the length of copyright if the Government were to buckle in negotiations with the US are very substantial. 
Although I agree that we should protect the fruits of endeavour for people who make creative content I think there should be an end to the life of that protection. In the end valuable copyright material ends up in the hands of corporates more often than not if we are honest. Mickey Mouse and Donald Duck are not owned by the original people who drew the cartoons; some corporations will have purchased them from somebody else. The corporate interest that we create in copyright—which actually confers monopoly rights on the holder of those rights; they are monopoly rights—needs to be limited as to term and that term should not be excessive. I for one think that even life plus 50 years is already a bit long. That is my personal viewpoint but I am not advocating a change to it. I think that life plus 70 years would be too long and I want to hear from the Government and the Minister in the chair that they are not going to concede that change. 
The next point they make in the article is that the very vexed issue in respect of section 92A which is under debate here will if the Americans get their way in these trade negotiations be up for grabs again. I am quoting again: “Rick Shera IP partner with the Auckland law firm Lowndes Jordan said the draft text reopend the vexed issue of the role of internet service providers in policing intellectual property rights. As ISPs are the conduits for infringing material the film and music industries have targeted them around the world as the best place to throttle it. ‘We thought we had almost got to the end of it with the Copyright (Infringing File Sharing) Amendment Bill due to be passed in the next couple of months’ Shera said. ‘Imagine you are an ISP who has had to bear the cost of gearing up for that regime only to be told that it is groundhog day and we are all going back to the section 92A debacle.’ ” 
I think it is an appropriate request for the Minister in the chair to give some undertaking to the Committee that we are not wasting our time on passing this bill only to have the legislation effectively undermined and the issue reopened by the negotiations under the Trans-Pacific Partnership. 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 Firstly I compliment the members who have contributed to this debate. It is a pretty tricky balance between the copyrights that the National Party holds dear—and people who create items that have value such as music film and the like being able to secure value from those creative endeavours—and another pretty important right the right of freedom. The National Party was founded on some very basic principles about freedom of expression and the State being limited in the degree to which it can constrain freedom of expression and the general freedoms that we enjoy as New Zealand citizens. I want to put on record though the chequered history around this issue and I note some of the contributions that have been made by Labour members. 
I do not proclaim to be an expert on copyright law. I commend the job that the Minister of Commerce Simon Power has done in this area. Like so many members of this House I have had to become familiar with this issue because of the huge furore created by the passage of section 92A of the Copyright Act. Anyone who was in an electorate office who looked at an MP’s mail or who was at the Nelson market has heard of section 92A. The first time I heard of section 92A I was not too sure which legislation it was in but literally thousands and thousands of people were agitated by the bill passed by a previous Government in 2008. It got us into this pickle and Simon Power and this Government have had to work through this issue in a balanced and sensible way. I think the provisions in this bill and in particular the very constructive work done by the Commerce Committee get us to a very sensible balance between those competing rights. 
I will respond to a couple of specific points in the debate. Clare Curran brought TVNZ 7 and the creative industries into the debate. I have to tell members that in so many areas the previous Government left financial landmines that have gone off for this Government. In respect of TVNZ 7 the previous Government funded it for a limited period and said that it would become self-sustaining. Whether the issue is in relation to the work that Simon Power has been doing today in legal aid the mess in ACC that I was left with or some of the other problems that so many of my ministerial colleagues are dealing with—including the area health boards and the huge deficits there—it shows that the previous Government was financially reckless. It set up programmes that are unaffordable in these tight fiscal times. 
I challenge the Labour members who are interjecting. I have a simple question for them: do they commit to funding TVNZ 7? On the one hand they cry in protest that this Government with all the challenges of the Christchurch earthquake and the global recession has to make difficult decisions. We had an impassioned plea from Clare Curran that the decisions we have made about TVNZ 7 were absolutely awful and that we should fund it. I simply ask Clare Curran this question again: will Labour fund it? Oh! The silence is deafening. We have a Labour Opposition that is playing politics and is not prepared to commit its opinion to say it would fund it. It truly shows how hollow Clare Curran’s criticisms are. 
I shall come to the thoughtful question from David Parker in respect of the issues around copyright and the Trans-Pacific Partnership discussions. The first point I make about the discussions is that— 
Clare Curran 
: Secret negotiations—why are they in secret? 
Hon Dr NICK SMITH 
: Look it is really interesting is it not? The member interjects that the negotiations on the Trans-Pacific Partnership are occurring in secret. Well I have a simple challenge for her: when her party was in Government and negotiating the free-trade agreement with China were those negotiations all held in the open? 
Hon Members 
: Yes. 
Hon Dr NICK SMITH 
: Rubbish! They were not. Exactly the same protocols about the negotiation of the free-trade agreement that occurred with China are occurring with the US. But you know we all understand in this Chamber that there is an ugly anti-American language probably amongst that party—I think it was a “gaggle” that one of the Labour members referred to; I think it was the self-interested trade unionists who were referred to—in relation to the anti-Americanism there. Members on this side of the Chamber are proud to say that a free-trade agreement with the United States would be good for the living standards of New Zealanders and good for trade and providing we can get an agreement that is in New Zealand’s interests that is something we will advance. 
But I also want to clarify an issue for Mr Parker. He assumes that all of the copyright issues between New Zealand and the United States are one way. Well that is to significantly discount the huge creative industries that exist in New Zealand. Let us take Dave Dobbyn a wonderful musician and his musical product of “Loyal”—right? Should he be able to claim the copyright and value for that production? We as members of a party for property rights say that Dave Dobbyn deserves to be able to protect the property rights of his creation and so should other talented musicians and filmmakers whom this National Government is very keen to advance. We want to protect those sorts of talents. 
Further I point out a hole in David Parker’s approach—as a typical sort of self-interested unionist; I think that is the phrase—in saying that these copyright laws benefit only corporates. Let me tell members the point. Let us say there is an argument to be had about how long copyright should apply. Should it be for 50 years after the death of the author for 60 years or for 70 years? Mr Parker argues that the only people who would benefit from that copyright would be corporates. Let me tell members why that perspective is incorrect. Why is that incorrect? Generally what happens with musicians artists and films is that a person sells that right on to a corporate and the value that that person receives as an individual and a creator of that copyright material is dependent on how long that value is for. So any extension in the period of copyright would play as much to the benefit of the creator as it does ultimately to any person who might purchase that right; and the sort of anti-business rhetoric we continue to hear from the political left undermines New Zealand’s interests in respect of those trans-Pacific negotiations. Again I stress that this is a really balanced and sensible response to a difficult issue and I think this bill should be commended to the Committee. 
GARETH HUGHES (Green) 
: 
 Kia ora. I would like to take a few calls but I am not sure whether my voice will last long enough. I am not sure whether members are aware that a parallel debate is happening right now on the Internet on Twitter. The debate has already gone to The Pirate Bay where people are using peer-to-peer software to move this debate around. 
In a Senator Ted Stevens moment—Senator Stevens was the guy who famously said the Internet was “a series of tubes”—Jonathan Young has now been immortalised as the creator of a meme with his fantastic comment that the Internet is like Skynet from The Terminator. Already Tweets and pictures with that meme have gone around. That shows the power of the Internet and how fast it moves. The debate online has already moved much much faster than the debate in the Chamber. 
I will make a couple of comments on Part 1 of the Copyright (Infringing File Sharing) Amendment Bill. I will start with clause 5 which repeals section 92A of the Copyright Act. I have heard members from both National and Labour blaming each other for the mess that the last Parliament got itself into with the deplorable bill that introduced section 92A the Copyright (New Technologies) Amendment Bill. I heard Labour members blaming National members for voting for the bill and National members blaming Labour members for bringing it in. In fact both parties are responsible for that bill and only the Green Party members can stand here and say we did not vote for a single reading of it. I would like to see a bit more responsibility taken from members in both parties for legislative actions in this Parliament. 
I thank the officials in the corner; they did fantastic work. Unfortunately I could not find the gigantic flowchart they prepared for us to try to explain the Copyright (Infringing File Sharing) Amendment Bill. I say to them: “Kia ora. Thank you very much.” 
I heard from Miss Street that when it comes to Internet account suspension there is no evidence. I heard from an honourable member that no compelling arguments were presented by the advocates for account suspension. I do not get why we are putting the provision into the bill when both sides agree there is not the evidence to back it up and there are no compelling arguments for it. Everyone in this Chamber agrees that education is the key. We all agree on fines and notices yet we had to go one step further and write this deplorable account suspension provision into the bill. That is why I have introduced an amendment to take the deplorable series of clauses from 122O through to 122PA out of the bill. Frankly account suspension provisions should not be in legislation. 
We have heard some good arguments from Labour members on why account suspension is bad but I have heard in the debate this evening two different things. From members on the left side of the Chamber I have heard that they have a guarantee from the Minister in charge of the bill the Hon Simon Power that accounts will not be suspended. Yet from members on the right side of the Chamber I have heard that if suspension is appropriate it will happen. There is a disjunction between the comments of the two parties and I would like to flesh out the facts. The compromise is being presented as a great common-sense solution. I want to get the facts on the table and find out exactly what is happening with these clauses. 
The fact is that an account suspension provision is still in the legislation. I am sure Labour members’ intentions are good but the fact is that their perspectives on the negotiations are solely their perspectives and not necessarily those of reality. National had the numbers so maybe it just called Labour’s bluff. I am sure Labour members are all crack negotiators and well skilled in negotiations but what if they had stayed strong to their principles? What if they had gone to the Minister and based on their principles said: “No way. We are going to fight it with all of our breath. We are going to run another section 92A campaign and get rid of this deplorable legislation.”? What if? We will never know because we are hearing only one side of the negotiations. 
Minister Power has a track record of building cross-party support for his legislation in Parliament. I am sure that would have been an incentive to bring together robust legislation that did not have this deplorable clause allowing accounts to be terminated. The fact is that I admire and acknowledge the intent of Labour members but I just do not trust the Government when it comes to the bill and its provision to enact account suspension through an Order in Council. I do not know why Labour members trust the Government. Labour members do not trust the Government on GST tax and workers’ rights. Why all of a sudden would Labour members start trusting the Government on digital copyright issues? It is just amazing. 
The Green Party was not involved in any of the out-of-select-committee negotiations so we do not know what was discussed. I ask the members on both sides of the Chamber what was negotiated. Is there a piece of paper? What was the deal? None of that information has come out yet Labour members are telling the New Zealand public to trust them that they are crack negotiators and that they have struck a great deal with the Government to make sure that account suspension never comes into force. Yet National members are saying that the Government will bring it in if it is appropriate. Where is the deal? Will anybody table the deal? Is it on paper? What is the threshold for account suspension to be brought in? Will there be any public consultation when the provision is enacted by an Order in Council? None of those questions is being answered and the public have a right to know why. 
In the absence of the information being out in the public I urge parties to support my amendment to take the termination provision out of the bill. The provision can come back to Parliament because that is where it rightfully should be decided on not by a Minister through an Order in Council. The decision should be made in Parliament. 
We are making a big call tonight on the State’s power to come in and turn off people’s Internet account for a civil offence—not even for a criminal offence. Essentially the legislation has a disproportionate remedy. It will not stop the pirating of copyright material and it takes away what I believe is a basic human right to the Internet. 
The Hon Mr Parker raised an interesting point about the Trans-Pacific Partnership. Was the partnership discussed in the deal? Is the termination provision in the legislation a reserve in case we need to enact it under the Trans-Pacific Partnership? Why is the provision in there? If the Minister cares to take another call I would like to know what his threshold will be to enact the provision. Will the Minister guarantee that the provision will not be enacted in this term of Parliament? 
In summary we all acknowledge that the bill is a step in the right direction after the old failure of section 92A but the Green Party cannot vote for the bill with a clause on account suspension written into it even if it is not to be enacted. Kia ora. 
Hon DAVID PARKER (Labour) 
: 
 I will respond to a couple of the points the Hon Dr Nick Smith made and also reinforce some of the issues I raised that he did not address. 
The first is that he hurled across the Chamber what he thought was an insult. He said we on this side of the Chamber should be ashamed of ourselves for being in favour of union movements. That is not something we hide; we are actually called the Labour Party. If ever people wanted evidence as to why unions are necessary to maintain and improve the rights of low and middle income workers they have only to see what the Government did this year with the minimum wage. The minimum wage went up by 25c a week in the face of all these huge increases in the cost of living. People cannot rely on the Government to get a wage increase; they have to organise their own rights to have a bit of countervailing power in their negotiations with employers in order to earn enough money to live. 
The other issue I raised and put to the Minister in the chair was whether National would extend the monopoly rights conferred through copyright pursuant to the Trans-Pacific Partnership negotiations. We all know that National has an abysmal record in terms of controlling monopoly excess. One example it should really be ashamed of at the moment is its failure to strip out some of the billions of dollars of excess pricing we have in electricity as found by the Commerce Commission in its 2009 report—$4.8 billion of overcharging. Dr Smith will get to his feet and say we did nothing about it while in Government but that is wrong. We regulated prices for lines and we set up the Commerce Commission inquiry that reported just after we left Government and proved the $4.8 billion—or 18 percent per annum average—overcharge by the State-owned energy companies which National will now sell entrenching that price gouging and making it even worse. 
That is why on the basis of that history it is right for me to come to this Chamber and inquire whether what National will do with monopoly rights in respect of copyright will be another example of plundering at the expense of consumers as it favours the interests of the copyright-holder. 
I have already said that I agree with copyright. I think we should protect copyright for creative content. 
Hon Member 
: That’s the second time you’ve said it. 
Hon DAVID PARKER 
: Dr Smith did not hear it when I said it the first time. I think we should protect copyright but that does not mean it should last for ever. They are monopoly rights that enable people to monopoly price. Monopolies ought to be controlled in the copyright area as everywhere else. That is why there is a limited term to copyright in law; otherwise those monopoly rents can be extracted for ever. That is the theory that lies behind copyright behind patent law and behind limited terms to both patent and copyright. That is why Brian Fallow is right to state in his article that the US trade demands on intellectual property are a real sore point. 
Simon Bridges 
: I can’t read it from here David. 
Hon DAVID PARKER 
: The member cannot? Well I will read it out to him. The headline states: “US trade demands a real sore point”. Protectionism provisions in Trans-Pacific talks should alarm our Government. 
Dr Smith also said all our negotiations on the New Zealand - China free-trade agreement were in secret. Not so I say to Dr Smith. There were regular briefings of Business New Zealand and the Council of Trade Unions by the Labour-led Government. Grant Robertson was involved in them so the Minister in the chair should not suggest that we had that same level of secrecy. 
We still have not heard from the Minister whether he will reopen the vexed section 92A issue pursuant to the Trans-Pacific Partnership agreement and whether he will upset the fine balance that has been achieved and endorsed by legislators. I again quote from the  
New Zealand Herald 
 article of 31 March by Brian Fallow: “Fine balances have been achieved and endorsed by legislators Shera said but the US agenda in the secretive TPP process could drive a coach and horses through much of that.” That was said by Rick Shera a partner of Lowndes Jordan. I am sure he is a competent person; I have no reason to doubt that his views are credible. 
MELISSA LEE (National) 
: 
 I will not go there in terms of responding to what Mr Parker was talking about because I think he is simply anti-American. 
Before I get on with my speech I thank the officials who are here in the Chamber. As previous speakers have mentioned the officials have put up with a lot of our ignorance about what is happening out there. Some of us have talked about the generational differences and the fact that we were not getting to grips with how file sharing was happening. The problem is not about just file sharing—it is not like sharing a copy of a DVD. It is actually the unauthorised sharing of copyright material via the Internet. 
Clare Curran said unauthorised file-sharing was happening on the Internet because some material was not available on the Internet or anywhere. She gave an example of a colleague who wanted to get a copy of a piece of music that was not available anywhere and she suggested that the only place her colleague could possibly go was to one of the Torrent websites. She qualified that statement by saying that her colleague did not go there. I hope she did not mean to say what she insinuated. To say that just because something is unavailable and someone does not have it that person could do an unauthorised activity and ignore the right of the copyright-holder is totally like saying that if someone does not have the money and has no ability to earn it they have the right to go and steal it off somebody else. That is pretty much a similar thing. Breaking a law whether it is an assault on a person or an assault on copyright should be punished not excused. 
During the Commerce Committee’s consideration we heard many submitters from both sides of the argument. I want share some data that I think came from the Motion Picture Association. When we look at the monthly infringement rates per country in 2009 we see that we did pretty well. We are down here on the graph I am holding at third to last. When we look at the breakdown of the monthly infringement rates per capita we see that we are way up there behind only Australia. 
What is really interesting about the data is that on both of the graphs Korea is last. I am not just trying to plug Korea because I was born there. It is really interesting that Korea has the most Draconian law when it comes to Internet and online infringement. It was the first country that— 
Simon Bridges 
: What about Uzbekistan? 
MELISSA LEE 
: No; Korea. It was the first country to suspend online accounts because people infringed copyright law. It was the first country in the world to do so. 
Two in five in New Zealand youth download movies for free. The majority of those infringers do not feel guilty that they are taking income from creators such as New Zealand bands and movie-makers. Perhaps Clare Curran is right in that if more of this music and movie material was readily available people would not download illegally. But unless the industry can be protected there will not be incentives for businesses to develop business models and innovative tools so that users can legitimately access the range of content while protecting the rights of the copyright holders. 
It is similar to when we are growing vegetables. If we are not very successful we get help from somebody else. Internet communities are the same. If we want something we share files with our friends our peers but at the moment the way people are going about that is to do it illegally. They are file sharing copyright material and that should not happen. In order for creators to flourish we need to protect their rights and I think this is a fantastic thing we are doing. I commend the bill to the Committee. 
MOANA MACKEY (Labour) 
: 
 I was not sure I would take a call in this debate but I thought that was an extraordinary contribution from the member who just resumed her seat Melissa Lee. It highlights the lack of any kind of plan from this National Government. 
The example my colleague Clare Curran gave went to the nub of the problem. We are making these changes because we want to support New Zealand artists and to support their copyright rights. We want to make sure they are not losing enormous amounts of money and to make sure they are not prevented from continuing to do what they want to do because of people illegally downloading and obtaining their information. That is what we want to do and that has to be the end goal. 
Melissa Lee said that the Labour Party was saying it was OK for someone to download illegally and that that was like committing assault but that was not what Clare Curran said. Clare Curran said that if people cannot find online something they desperately want to purchase legally they may eventually go to a file-sharing website because they were not able to find it anywhere else. A solution would be to work out as many ways as possible to allow people to find this information and these products legally. It is about prevention. 
The National Government’s approach to law and order is all about passing at the tail end ridiculous legislation such as the three-strikes legislation which will do absolutely nothing to prevent crime. It does all those things at the tail end of the spectrum after an offence has happened and they do nothing to keep people safer at all. National rubbishes all the great work that the Labour Government did in trying to prevent crime through early intervention. It rubbishes it calling it PC and namby-pamby and loads up ridiculous laws such as the three-strikes legislation at the ambulance-at-the-bottom-of-the-cliff end of the spectrum. Melissa Lee was suggesting we do that in this area as well. Labour members are saying we want to make sure people can access things legally. That will be the way that we solve this problem—as well as having a penalty at the end. But to say that the penalty at the end will solve the entire problem is not being realistic. 
I pay tribute to my colleague Clare Curran. This has been a very difficult issue. It has been ongoing. As the Minister in the chair the Minister for the Environment has said a number of us have received numerous correspondence through our offices on this issue. It is an issue that strikes to the very heart of the freedom that New Zealanders feel they should have when they are accessing the Internet. We need to determine whether the punishment fits the crime and try to balance it with the need to protect New Zealand artists and their work and ensure they are not losing their livelihoods. It is a very difficult balance to get. I congratulate Clare Curran on the work she did in trying to find a compromise and trying to find a safeguard. It is not perfect by any means—not perfect at all—but it is a compromise and it is a safeguard. 
Labour members did not have to do that. We are in Opposition. The Government had the numbers to push through the original law as it was. We could have just railed against it shouted into the wind and said how terrible it all is but we wanted to be constructive in this area. We wanted to find a solution that works and also protects the rights of New Zealanders so that they do not feel they have a kind of Big Brother over-the-top Government approach coming down on top of them. It has not been easy but that is what a responsible Opposition does. That is what a responsible Opposition has done in this case. As we said the solution is not entirely perfect. If we were in Government we would probably do it differently having learnt from our experience when we were in Government. But “compromise” is not a dirty word and the compromise in this respect and in this regard is far better than what would have gone through had Clare Curran as our spokesperson on communications and information technology not put in that work to try to find something that would allay the concerns of all those people out there who were contacting us before the last election and post the election about the excessive nature of that particular penalty under the law. 
I was disappointed that the Minister in the chair chose to attack my colleague David Parker in the way that he did. I think the issues that David Parker was raising were actually very sensible. 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 I want to respond to a few of the points that have been raised by members to add to the debate we are having this evening. The first of those I want to respond to is from the Green Party and Gareth Hughes. There is a fundamental problem for Green Party members: they do not understand that rights go with responsibility. It does not matter what area of endeavour it is in. With this area of the Internet the Greens are very strong on rights but very light on responsibilities. I have a question for the Green Party. In our law governing our transport system we have a right for people to drive a car. But also we have in our law the responsibility that goes with that right. The ultimate sanction for the courts is to take someone’s driver’s licence from them and to prohibit that person from driving for the broader public good. Frankly our road transport system which requires order would not operate without that sanction. 
We could look to another sector such as telephones. The member rightly says that telephones are historically a basic right. Telephones have become a pretty essential part of life. Yet in our laws it is possible that if somebody abuses the privilege of a telephone—they use it for improper purpose they make abusive phone calls and the like—the courts have the power to take away that person’s telephone as the ultimate sanction for not respecting that right and the responsibilities that go with it. 
We have other areas—for instance radio telecommunications using old walkie-talkies and those sorts of forms of early communications. Again there are rights there that are balanced with responsibility. This bill provides a whole lot more checks about the steps that need to be gone through. But ultimately we are saying that if we cannot control the Wild West and the abuse of copyright then the law needs to have the ultimate sanction to be able to suspend a person’s Internet connection. This Government brings to this debate that proper trade-off that goes into a society with rights and responsibilities. 
I also want to respond to some of the points made by David Parker because I really think they exposed some pretty flawed thinking. David Parker argued that copyright is a monopoly. I think the member has it all wrong. Copyright is actually about a private property right. If a person such as Dave Dobbyn creates a magnificent piece of music such as “Loyal” do we oppose his being able to control the distribution and use of that music? Is he exhibiting monopoly rights over his creation? How is that different to me expressing my monopoly rights over the house I own the monopoly rights I have over my car or the monopoly rights I have over a creation I make as an engineer in my field of endeavour? I really think that for Labour to align copyright with a monopoly right is a flawed perspective. 
David Parker was a Minister of Energy in the previous Labour Government. He was in charge of the electricity network when we saw the highest price increases ever in the history of New Zealand—a 72 percent increase in power prices. The gall! He now stands up in this Chamber and lectures a Government that is seeing substantially less increase and I have the figures. During Labour’s period in Government power prices went up by 8 percent per year. In the first 2 years of this Government they have gone up by 4 percent per year on average. I ask members to remember that that includes the introduction of the emissions trading scheme and the increase in GST. I say to members of the Labour Opposition— 
Raymond Huo 
: I raise a point of order Mr Chairperson. What the Minister is trying to say has nothing to do with the current bill. It has no relevance whatsoever. 
The CHAIRPERSON (H V Ross Robertson) 
: The Minister is replying to previous issues raised in the debate. He can do that for a little while. 
Hon Dr NICK SMITH 
: It was Mr Parker who somehow in this debate introduced the issue of power prices. I just wanted to tell the Committee a few home truths about what has been going on in that sector. I can understand that if I was a Labour member I would be pretty defensive and would not want to hear a few hard facts about what has actually happened with power prices. 
I stress again that I think Simon Power the Commerce Committee and the officials have done a really balanced sensible job on this important bill. 
JACINDA ARDERN (Labour) 
: 
 I appreciate the chance to take a very short call on the Copyright (Infringing File Sharing) Amendment Bill. This call is directed at the Minister in the chair the Minister for the Environment. I would like his response to a particular issue. I have been following some of the social media traffic in relation to the bill—and people are keenly watching the debate in the House tonight—and I am seeing two pieces of feedback coming through. The first is there seems to be an adverse reaction to the Minister’s references to Dave Dobbyn and the second is about an incredibly important point and that is the definition of “file sharing” within the bill. 
Simon Bridges 
: They don’t sing “Loyal” in the Labour Party at the moment. 
JACINDA ARDERN 
: The member may jest but I have an important point to raise. Originally in the bill the definition of “file sharing” stated: “ ‘file sharing’ is where material—(a) is downloaded from the Internet; or (b) is made available on the Internet by a user in a form in which the material may be downloaded by 1 or more other users; or (c) is transferred directly or indirectly via the Internet from one user to another user”. That was the original definition of “file sharing”. Under that definition everyone who has ever used the Internet probably by default falls under the definition of having shared files. 
But we do of course have a new definition. After reading the InternetNZ submission I have to say the new definition of “file sharing” is very similar—other than the omission of the word “protocol”—to the original suggestion from InternetNZ: “file sharing is where—(a) material is uploaded via or downloaded from the Internet using an application or network that enables the simultaneous sharing of material between multiple users; and (b) uploading and downloading may but need not occur at the same time”. As I say it is a very similar definition to that worked through by InternetNZ—with some caveats and some trepidation I have to say. InternetNZ was of the view that more work needed to be done on this area but I imagine that for the sake of expediency InternetNZ made a recommendation during its submission. 
I would like to request the Minister given that  
Hansard 
 will be used as a record going forward in the way that this bill is applied in practical terms to give the Committee his view of the definition of “file sharing” how he sees that definition being applied once this legislation is enacted and becomes law. For instance does he believe that it includes an attachment to an email? How far does his view of this definition go? I think clarification from the Minister would be helpful for this debate. I am not going to give my interpretation because of course as a Government Minister his definition on record in  
Hansard 
 will be much more important going forward. I look forward to hearing the Minister’s contribution on that issue. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 There are so many things to say. Essentially there are a couple of things I want to address. The Minister in the chair the Minister for the Environment opened a can of worms when he talked about fundamental principles. He started by talking about principles but then basically attacked Opposition members. He then talked about the fundamental problem with the Green Party. Well I would like to tell the Minister what the fundamental problem is with the National Government and it is that it is full of hot air. 
The Government is full of rhetoric that does not match the reality and there are so many examples of that. I would like to bring one example to the attention of members tonight that has core relevance to this debate: the importance of investing in our heritage and in our cultural content. Essentially that is the thing we are trying to protect through this legislation by providing copyright—protection of the creators’ works. Unfortunately this Government is taking away the funding the support base and the confidence from our creative sector which is a great tragedy. Unfortunately this is the awful rhetoric we are faced with from this Government. 
Let us look at some of the facts. The Minister attacked the Labour Opposition in relation to TVNZ 7. Television New Zealand appeared before the Commerce Committee last week and told that committee which saw this legislation through and did all the hard work that it was no longer a public broadcaster. Television New Zealand said it had been instructed that it was a commercial broadcaster and that was before legislation has been passed through the House to disband the public sector charter. We are making Television New Zealand into a commercial broadcaster. There is no public broadcasting in this country; there is no investment by this Government in cultural content which this legislation is designed to protect. We are ring-fencing the funding for Radio New Zealand and squeezing the heart and soul of New Zealand content. 
Basically the Minister has contributed only hot air to this debate. He does not understand the issues. If it was the actual Minister who is taking this legislation through the House who was getting up and talking about principles maybe we could have taken him seriously. This legislation and Labour’s support for this legislation is based on principles. Labour’s support for legislation is always based on principles. If we want to talk about the monopoly issue versus the failure of the market which underpins this whole issue but which this Government refuses to address then I want to make some comments about it. 
I refer members to another submission. It was a very sensible submission provided to the select committee by one David Farrar. Mr Farrar whom I may not always agree with on a number of issues makes some very sensible points in his submission about the research on economic damage that is being claimed by many organisations—not the people who create content but the organisations that represent them such as the corporates and the monopolies that David Parker was referring to. He said that some rights-holders produce reports stating that the economic damage is in the billions assuming that every single download of a work is a sale that would have otherwise occurred. This ignores the fact that many downloaders try— 
Hon Dr NICK SMITH (Minister for the Environment) 
: 
 There are a couple of points that I would like to respond to in the debate and the first of those is the accusation or the assertion from Clare Curran that Government members—and particularly me—have been talking just hot air. Well let us go through the dialogue that has occurred in the debate. In that member’s earlier contribution she made a great deal of and objected to the fact that the Minister of Broadcasting has decided not to provide additional funding to Television New Zealand for the funding of TVNZ 7. I pointed out that the previous Government in agreeing to fund that channel had said that the funding was for a limited period and that Television New Zealand would then be able to run it from its commercial revenues. 
I had a very simple challenge for the member Clare Curran: if she objected to the Government not funding the channel would she say whether Labour would have funded it? The members were absolutely silent. They could give the Committee absolutely no assurance at all. My simple point to her was that it was the case of the pot calling the kettle black. If there is hot air it is a party standing up in this Parliament saying that something is outrageous is awful and that the Government is not going to fund something but then not being sure whether their party would fund it. I have to say to the member that that is hot air. 
I can tell the member something else that was hot air and that was the charter that the previous Government had within Television New Zealand. Everybody in the broadcasting sector has come to the conclusion that Labour’s charter was nothing more than hot air. I say to that member before she asserts such claims in the House to consider that point further and to give us some idea despite all the rhetoric about supporting the creative industries where her party was when the call was between the creative industries and the filming of  
The Hobbit 
 in New Zealand. Well I think Damien O’Connor had the answer—that is that self-interested trade unionists went ahead of the national interest and the interest of New Zealand’s creative industries. 
I will also respond to the question from Jacinda Ardern about where in this bill the definition of file sharing is. It is quite simply set out in clause 7 of Part 1. That clause sets out quite clearly the definition of file sharing and I further say that yes that definition does include an attachment that involves the sharing of files. 
I was also very concerned that members opposite took offence at my enthusiasm for Dave Dobbyn Bic Runga Hayley Westenra and other great New Zealand artists. I have to confess to being an enthusiast for all of those great New Zealand artists and I am surprised that members opposite would be anything other than enthusiasts for those wonderful New Zealand musicians whose creative rights and copyright interests this House should seriously consider protecting through copyright provisions because those creative industries are so important to New Zealand. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 We have just heard another lot of hot air. The Minister for the Environment is dissembling shall we say. He does not understand the issues he cannot enter into debate on the substantive issues in the bill and he will not address the underlying major issues that I was attempting to address. 
I would like to continue talking to the Committee about the market failure which is essentially the most important issue that this country and this Parliament should be addressing in terms of how we as a nation can create encourage foster and support our creative content which is essentially our cultural identity and can ensure that it is available to our citizens and to the rest of the world. We should also enable and encourage new business models to occur that will enable people to use the Internet which is our future and enable them to share content legally. When my colleague on the Commerce Committee Jonathan Young earlier talked about the— 
Simon Bridges 
: A good guy. 
CLARE CURRAN 
: He is a good guy—sometimes. He talked about the fact that the future is meeting us. I think that is what he said. I wrote “No! No!” in my notebook because essentially the future is already happening and this legislation is behind the eight ball. 
Although Labour has supported it because we support the fundamental principle of copyright and acknowledge the importance of protecting the creative content that our people and our nation create—it should be protected—we also know from what is happening from the behaviour out there in the world that there is a fundamental market flaw. I will go back to David Farrar’s submission. He said the reports about the damage being in the billions of dollars assume that “every single download of a ‘work’ is a sale that would have otherwise occurred. This ignores the fact that many downloaders ‘try before they buy’ or in other words download to see if they like something and if they do then purchase it legally. This is not to condone such acts”—and every submitter who came before the select committee was not condoning these acts; they were describing what is happening in reality what our children are doing and what our friends are doing and what apparently none of us are doing but just about every person we know has family members who have done this—“but to point out that the assumptions over economic damage are unwarranted.” He continued: “In Australasia the most recent stats (from the Int Assn of the Phonographic Industry) show that music revenues are up 3.5% (physical sales down 2.4% digital sales up 41.4% and performance rights up 8.6%) in 2009. Also APRA reported that in 2008/09 distributions to music creators increased by 10%”. At the same time and I hope the Minister is listening “In the movie industry global ticket sales were up 7.6% … during the worst recession in 70 years.” 
The point of these statistics is to put the claims of the industry groups into proportion. Legitimate sales of content on the Internet are going up more and more content is being sold and the claims that illegal file-sharing are causing such damage are simply false. What has happened is that there is a market failure and here I am lecturing the National Government on market failures. 
The question was put that the following amendment in the name of Gareth Hughes to clause 7 be agreed to: 
to omit new sections 122O 122P and 122PA. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 11 
Green Party 9; Independents: Carter C Harawira. 
Noes 110 
New Zealand National 58; New Zealand Labour 42; ACT New Zealand 4; Maori Party 4; Progressive 1; United Future 1. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 230 in the name of the Hon Simon Power to Part 1 be agreed to. 
Amendments agreed to. 
Part 1 as amended agreed to. 
Part 2 Related amendments to Parts 10 and 11 
The question was put that the amendment set out on Supplementary Order Paper 230 in the name of the Hon Simon Power to insert new clause 9A be agreed to. 
Amendment agreed to. 
Part 2 as amended agreed to. 
Clause 1 agreed to.  
Clause 2 Commencement 
The question was put that the amendment set out on Supplementary Order Paper 230 in the name of the Hon Simon Power be agreed to. 
Amendment agreed to. 
Clause 2 as amended agreed to. 
Clause 3 agreed to.  
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon Dr NICK SMITH (Minister for the Environment) 
 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 $15000. 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. 
CLARE CURRAN (Labour—Dunedin South) 
: 
 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. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 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. 
Hon DAVID PARKER (Labour) 
: 
 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. 
Hon DAVID PARKER 
: 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. 
Hon DAVID PARKER 
: 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. 
Hon DAVID PARKER 
: What? 
Chris Tremain 
: That’s what the Minister said. He agreed with you. 
Hon DAVID PARKER 
: Did he agree that the term should not extended beyond 50 years? 
Chris Tremain 
: No he said that it was a property right. 
Hon DAVID PARKER 
: 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. 
Hon DAVID PARKER 
: 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? 
Hon DAVID PARKER 
: 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. 
GARETH HUGHES (Green) 
: 
 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 28000 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. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 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.