According to a report in The Times, the U.K. government is planning to a review of current rules to consider whether explicit content could be better screened from children — and is pushing the possibility that households will have to opt in with their ISP if they don’t want all adult content to be blocked:

Cameron will reveal that the Government is to consult on whether adults wanting to view porn should be forced to “opt in” in order to access porn sites, a measure fiercely resisted by some internet service providers (ISP) and anti-censorship campaigners.

The decision to explore the option of blocking porn by default came after a Downing Street breakfast meeting with creative-industry figures yesterday. “We will consult on a default option,” a Whitehall source said. “Nothing is ruled in or out at the moment. We will look at all the options.”

Next on his list for a meeting are internet service providers, who are likely to voice concerns about the prospect of a mandatory block.

The question of network-level blocking of adult content (primarily pornography) is a perennial topic of debate in censorious, prudish Britain. The argument is that children can too easily find their way to explicit content on the web, and in order to save clueless parents the default position should be that controls are put in place.

It’s a subject that has come up regularly over the past few years, including a push in 2010 soon after Cameron took office. In fact, last year Britain’s four biggest internet providers signed a voluntary code that meant they would offer customers the chance to put a block on adult content. But it is applied in a variety of ways, and only applies to new subscribers: not enough, apparently, to quell the outcry.

Protecting children online is always a hot topic — only yesterday we reported about European-level plans to look at age verification on the web — but there is a bigger political context here worth remembering.

Cameron has endured a troubled time recently: he’s being hammered over a problematic budget, with spreading anger that his government’s austerity measures seems to hurt ordinary people but protect those with high incomes.

That led to a backlash on Thursday in local elections, with his Conservative party losing control of a large chunk of the cities and authorities it had previously commanded. Plus, of course, there’s the ongoing question of the relationship between Downing Street and the Murdoch empire, with inquiries into the actions of News Corp’s British newspaper businesses turning the heat up on Cameron thanks to his close links to the mogul.

At the same time, Cameron’s political rivals have made hay from his close connections to Google, claiming that his relationship to the search giant is one reason he has been lenient on internet porn (despite the fact, as we’ve shown, he’s not.)

No doubt emboldened by the recent court ruling that forces British ISPs to block The Pirate Bay, the Conservative right see an easy win with heartland voters by targeting adult-only content. Although it never quite tackles the technical problem of identifying explicit content, it’s clearly seen as a valuable rhetorical tool.

It’s clear where the support for this move comes from: now it will be interesting to see how much resistance it gathers, and from where.

Lord Justice Leveson was appointed by Prime Minister David Cameron to head the inquiry after last summer’s revelations of phone hacking led to News Corp.’s closure of News of the World, more allegations, and Parliamentary hearings that raised serious questions about interactions between the press and the government.

Since then, Scotland Yard has made numerous arrests, including Rebekah Brooks, the former News International head who was second only to James Murdoch in the company’s UK hierarchy — but the Murdochs have remained largely unscathed in terms of legal action. Not so on the economic side: News Corp. had to quit its bid for full ownership of BSkyB and James Murdoch has resigned from numerous boards, including his chairmanship of the satellite operator.

Cameron’s behavior — and his own cabinet, particularly Culture Secretary Jeremy Hunt — became a centerpiece of Tuesday’s hearing as the inquiry drilled into the controversial bid for BSkyB and struck oil. It was one of the most stunning behind-the-scenes views of government influence the UK has seen.

Quite the stage for Rupert Murdoch’s appearance.

Here’s a Storify to bring you up to speed:

James Murdoch faces the Leveson Inquiry (but will he remember it?)

James Murdoch kicked off Murdoch week at the Leveson Inquiry Tuesday — and managed to put someone else’s behavior in the spotlight,

Storified by Staci D Kramer · Wed, Apr 25 2012 01:13:26

According to the Guardian, Miliband, who appears to be seizing this scandal as a new opportunity to play the role of strong leader, will launch a motion in Parliament today to stop the process until the criminal investigation into the News of the World is completed. That could take years.

Some are calling for Prime Minister David Cameron, and Culture Secretary Jeremy Hunt, who has been in charge of the process til now, to tell Murdoch to withdraw the bid. Hunt said last week that he was delaying the decision til September because of the unusually heavy volume of comments on the bid, not the events that were unfolding.

The vote would be Wednesday following a debate that could be brutal as everyone tries to score points off suddenly vulnerable Rupert Murdoch, James Murdoch, News Corp. — and Cameron. (The drinking game potential is off the charts.)

Miliband’s push puts more pressure on Cameron, who is still trying to recover from hiring former NotW editor Andy Coulson as his director of communications; Coulson resigned after more revelations about his role in the phone hacking and was arrested Friday. Cameron also has the baggage of being friends with Rebekah Brooks, the chief executive of News Int. who was editor of News of the World during the time when much of the phone hacking took place, and being supported politically by Murdoch and News Corp. Brooks, the Telegraph reports, is being called in for questioning by Metropolitan Police.

The Guardian in its editorial and news pages has been open and vocal all along against allowing News Corp. to further consolidate its power by acquiring all of BSkyB. (To say there is no love lost between Guardian and News International or News Corp. is to put it mildly.) The owners of the Daily Telegraph and the Daily Mail – both supporters of the Conservatives – united with the owners of the Guardian (Our parent ContentNext Media is also owned by Guardian News and Media), and the Labour-backing Daily Mirror last fall to urge blocking the deal.

In a strong editorial in its Sunday paper, The Observer, which credited the “sterling and stoic persistence of the Guardian, some diligent lawyers and a handful of MPs” with bringing the “shameful saga” to light, once again stressed: “In the spirit of media plurality, it is essential that Murdoch’s control of BSkyB is rejected, as we have argued consistently in these pages.”

But the Guardian is not alone in raising the question of whether News Corp. meets Ofcom’s test of “fit and proper” for ownership. Under the Broadcasting Acts, the agency explained last week, Ofcom has a continuing responsibility “to be satisfied that any person (which will include controlling directors and shareholders) holding a broadcasting licence remains fit and proper to hold those licences. In considering whether any licensee remains a ‘fit and proper person’ to hold broadcasting licences Ofcom will consider any relevant conduct of those who manage and control such a licence.”

News Corp. could win the deal and if senior executives are proven guilty in a criminal investigation later, lose the licence.

Some appear to be pinning their hopes for that on James Murdoch, who helped BSkyB advance as CEO from 2003 through 2007; he recently was promoted to deputy chief operating officer of News Corp. while remaining chairman of News Int. He’s on the News Corp. board and executive committee — and he is still chairman and non-executive director of BSkyB.

He signed off on large payments to some phone hacking victims in 2009, which he said last week that he regrets, and likely will be called in for questioning in this new wave of investigations. If he were to be charged with anything — a big if — and if he were to be found guilty — again a big if — and he were still BSkyB chairman or if News Corp. controlled BSkyB and he was still a top exec, well, you get the picture.

BSkyB’s value: Much has been made of BSkyB shedding $1 billion in market value by Friday’s close. Absolutely true and stunning. But it’s worth remembering that the company’s value has been inflated for the past year by News Corp.’s agreement on June 15, 2010, to pay 700p per share. It is still nearly 200p higher than it was on June 1, 2010 — 750p at Friday’s close compared with 570.50p. One reason the shares are dropping is because the deal is on such rocky grounds. Without News Corp. as a likely buyer, the prices will slide even further. So a price pumped up by a buyer is deflating as the timeline gets longer and the likelihood of the acquisition fades.

Update: Miliband launched the attack Sunday as expected but not the motion. Lots of scurrying behind the scenes — and chatter in front — about trying to get the government to stop the process without a vote. Government officials continue to express concern that they don’t have grounds at present to reject the deal. Ditto for Ofcom, as there have not been any criminal proceedings much less convictions of anyone with a controlling interest or executive position in BSkyB. What Miliband and other deal opponents want is a preemptive strike.

Guardian gets into the politics.

Disclosure: Our publisher ContentNext is a wholly owned subsidiary of Guardian News & Media.

“The founders of Google (NSDQ: GOOG) have said they could never have started their company in Britain,” the prime minister told his audience of thrusting internet entrepreneurs. “The service they provide depends on taking a snapshot of all the content on the internet at any one time and they feel our copyright system is not as friendly to this sort of innovation as it is in the United States.”

The announcement that followed, of a wholesale review of the UK’s intellectual property (IP) laws, was greeted with unalloyed delight at Google’s California headquarters – but left the music industry, ravaged by web piracy, with that all-too-familiar sinking feeling.

The review into “Intellectual Property and growth”, chaired by Ian Hargreaves, the professor of digital economy at Cardiff University and a former editor of the Independent, won’t just impact the ability of musicians to be rewarded for the work they have created. The outcome could affect publishers, film companies, designers, medical researchers and every teenager who has digitally altered a picture and posted it on Facebook or created a witty YouTube mash-up.

The review will identify the “barriers to new internet-based business models” raised by the “costs of obtaining permissions from existing rights-holders”. There’s no shortage of examples of these barriers to innovation.

Should a new, web-based radio station, for instance, be prevented from streaming a playlist of music by having to track down and sign individual licensing deals for every track? If a video whizzkid can create an entirely new work by editing The King’s Speech into a three-minute YouTube clip in which Colin Firth is made to lip-synch to Lady Gaga, should such a talent be immediately crushed to dust by corporate lawyers?

But most significantly for the conspiracy theorists, should a $190 billion giant like Google, which has been sued by publishers over the mass copying of copyright-protected works, be allowed a change in the law to make it easier for its search engine to hoover up other people’s content?

Google has its claws in Cameron, say the critics. Rachel Whetstone, Google’s European head of communications, is married to Steve Hilton, the prime minister’s director of strategy. And the prime minister’s declaration that he wanted to see a US-style relaxation of IP laws, creating a “fair use” exemption – giving space for startups to copy and create innovative products, sourced from material which might be copyright-protected – was top of Google’s legislative wishlist.

But by promising a new copyright regime “fit for the internet age,” to boost the growth-led recovery he is pinning his electoral hopes upon, the prime minister even appeared to have pre-judged the outcome of the Hargreaves review. “I was a Cameron supporter but he has been deceived by the people whispering in his ear,” says Mike Batt, the songwriter, producer and founder of Dramatico, Katie Melua’s record label.

“It’s complete bollocks. The reason Google started up in Silicon Valley is because they have banks that understand the entrepreneurial thinking behind startups. We don’t.”

Companies such as Google want to “eat the lunch” of the people who actually create popular works, says Batt, the deputy chairman of the BPI, the record industry trade body. “The review terms of reference are completely biased towards Google, the ISPs and anyone who wants to set up an internet company. Weakening copyright won’t create a Silicon Valley here. It will hit the small music publishing and film outfits that create value for the economy by producing content.”

Feargal Sharkey, the chief executive of UK Music, argues that under the current copyright law, legal music download “startups” are flourishing, with 72 competing sites generating £350 million in sales last year. He warns of the danger of taking “50,000 jobs from the music industry to create 20,000 in technology”.

Those fears are misplaced, insists Sarah Hunter, Google’s head of UK public policy and a former Downing Street adviser to Tony Blair on the creative industries. “None of us are in the business of stifling great content online but we do think copyright law needs fixing in everyone’s interest,” she says.

Google would not have set up in the UK, argues Hunter, because the lack of a “fair use” provision here meant that the founders, Larry Page and Sergey Brin, couldn’t be sure that its search engine product would be legal. “There is a fair amount of case law to give you that certainty in the US but the copyright laws here are unclear about the extent to which exemptions do exist,” she says.

Entrepreneurs would reject Britain and take great ideas elsewhere, adds Hunter, who says Google wants a change in law to create a “climate for innovation” for new technology companies, not to undermine the creative industries.

Yet that legal certainty identified across the Atlantic didn’t prevent Google from being embroiled in a costly legal battle with the U.S. publishing industry over Google Books’ unlicensed copying of authors’ works, in its effort to make “all of the knowledge contained within the world’s books searchable online”.

The record industry has accused Google Search of directing fans to illegal “bit torrent” sites. But Hunter believes there can be a virtuous circle in which “Google enhances the value of rights-holders’ websites because more people see their products and they can monetise those eyeballs”.

The job of Hargreaves’s panel, which has visited Silicon Valley to gather evidence, is complicated by the number of competing interests among the 180 submissions it has received. The British Library wants “fair use” exemptions so that it can embark on a mass digitisation of books and audiovisual recordings that are no longer commercially available – to unlock material that hasn’t seen the light of day for a century.

The speed of medical research could be enhanced by the ability to “format shift” computer programs from disks to files, and to incorporate gobbets of information from thousands of web sources without fear of infringement. Then there is Mixcloud, the music internet radio startup, which told Hargreaves that it could thrive if there was just a single licence it could sign up to for permission to stream its playlist of reggae dancehall, jazz and electronica.

Hargreaves warns that the status quo is not an option. “I don’t think the current system is serving content creators as well as it should,” he says. “For most of my working life, I have been employed in the creative industries. There are times when some change is necessary, in order to generate jobs for tomorrow. This is such a time.”

The Hargreaves inquiry could create a fair-use review panel to rule over test cases, without the requirement for expensive lawyers.

Pearson (NYSE: PSO), the publishing company that owns the Financial Times and Penguin, has proposed the creation of an online global rights registry that startup companies could use to discover what they are able to do legally with someone else’s publication, film or piece of music and make licence payments accordingly.

The review is also expected to tidy up the anomaly of “format shifting” by making it legal to “rip” purchased CDs through computers and on to MP3 players.

Hargreaves admits that Cameron “by design set up a Google versus others” contest in his Shoreditch speech last November. When asked if he could guarantee that there would be a net economic gain from any weakening of copyright law he might propose, he quotes Clint Eastwood: “If you want a guarantee, buy a toaster.”

He has, however, promised the music industry that he is not “about to tear up the whole copyright book”. So is Hargreaves willing to disappoint Cameron, who is demanding a solution that will “encourage the sort of creative innovation that exists in America”, and by extension, his friends at Google?

The Silicon Valley trip was instructive. “In Palo Alto, the IP lawyers almost outnumber the software engineers,” Hargreaves recalls.

“As we sped from Mountain View [the town where Google has its HQ], we passed an evangelical church with one of those comic billboards at its gate. Amid the glaze of the traffic, I think it said: ‘Even Google cannot resolve every search’.”

This article originally appeared in MediaGuardian.

Excerpt:-
– Zuckerberg: “You guys” x6.
– Cameron: “It was good to see you the other day … next time you’re in town, come and look us up.”

Does anyone else feel like they just eavesdropped on a private call? Either that, or a massive, insincere PR opp.

Her Majesty’s Treasury is calling the exercise The Spending Challenge. On Facebook, it involves linking from the Democracy UK profile, which gained popularity in May’s election campaign, out to government websites designed to take voters’ views. One involves a script visitors use to submit and rate austerity ideas, part of a government plan to reduce the UK’s deficit, which is 11 percent of GDP...

Example: “If we made certain drugs legal then the police would have a lot less to do and people would be safer.” Yeah, right.

Does any of this amount to real engagement? The UK’s budget was already made by the new government back in June. More likely, the administration is using these tools to bring people along on the austerity journey.

As for Facebook, it’s using the opportunity to put its case to advertisers. From the release: “Facebook is one of the most successful and cost-effective ways to bring ideas to life and deliver messages straight to your audience. This is relevant for anyone who wants to engage with the Facebook audience from government and public figures right through to global brands and local businesses…”

So now the UK government is a flagship Facebook advertising partner? Like I said, surreal.