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Cablegate: Argentina: Digital Tv Endgame

VZCZCXYZ0001
RR RUEHWEB

DE RUEHBU #1358/01 2761307
ZNR UUUUU ZZH
R 021307Z OCT 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 2158
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHMD/AMEMBASSY MADRID 2138
RUEHFR/AMEMBASSY PARIS 1470
RUEHUL/AMEMBASSY SEOUL 0161
RUEHBS/USEU BRUSSELS

UNCLAS BUENOS AIRES 001358

SENSITIVE
SIPDIS

EEB/CIP FOR AMBASSADOR DAVID GROSS, ANNE JILLSON
DEPARTMENT FOR FCC
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER

E.O. 12958: N/A
TAGS: KPAO KMDR AMTC ECPS TSPL TINT PGOV ECON AR
SUBJECT: ARGENTINA: DIGITAL TV ENDGAME

REF: A. BUENOS AIRES 1324
B. BUENOS AIRES 1279

1. (SBU) Summary and Action Request: Jose Aranda, Vice
Chairman of the media conglomerate Clarin Group, told Charge
on September 23 that that there is a "fighting chance" that
the GOA could still choose the U.S. digital norm for DTV (ref
B), and offered to work with the Embassy to promote this
standard. He also offered specific ideas on how to counter
Japanese lobbying efforts. While Clarin itself stands to
gain from any GOA adoption of the ATSC norm, local media
analysts tell Embassy that the ATSC norm offers price,
quality and efficiency advantages for all operators,
particularly in the case of open-air television. Meanwhile,
the GOA continues to send signals that it is moving towards
selecting the Japanese standard, the one already chosen and
being promoted by its closest ally, Brazil. Embassy is
willing and able to continue its longstanding advocacy for
the U.S. standard, but as stated in ref B, we need and seek a
clear sign of U.S. industry and USG support. End summary and
action request.

------------------------------------------
Background on Clarin Group and Jose Aranda
------------------------------------------

2. (SBU) Grupo Clarin is the largest and most prominent media
conglomerate in Argentina, and the market leader in most of
the media segments in which it operates. Through companies
it controls and joint ventures, Grupo Clarin is engaged in
the largest circulation Spanish language paper in the world,
Argentina's top-ratings open air and cable television
networks (which already use the ATSC standard) and
distributors, the country's second radio station in terms of
morning traffic audience and internet, printing and
publishing, and broadcasting and programming. Jose Aranda, a
major stockholder, worked hand in hand with Clarin CEO Hector
Magnetto to project Clarin from a popular newspaper to the
media conglomerate it is today. An accountant by training,
Aranda possesses a business and societal vision that
transcends the governments that have come and gone in
Argentina. He came to offer to work with the U.S. Embassy to
continue to promote the U.S. digital norm for Argentina, for
which he says there is still a fighting chance.

-----------------------------
DTV - still a fighting chance
-----------------------------

3. (SBU) Aranda underlined the important influence the U.S.
Embassy has had in the DTV issue. He pointed out that the
Ambassador's public diplomacy upon arrival to Argentina
delayed a GoA decision, just as it was to choose the European
standard, and despite the strong lobbies by the Brazilians
for the Japanese standard and the Europeans for theirs (the
latter especially from Telefonica interests). Aranda
asserted that despite recent press reports from President
Cristina Fernandez de Kirchner's (CFK) summit in Brazil (ref
A), the GoA has not made its final decision. Aranda's main
point was that as Brazilian lobbying will continue, U.S.
advocacy could still make a difference. He said there was
"no possibility" of the GOA choosing the European standard,
so it was really just down to the U.S.
vs. Japanese standard.

---------------------------------------
Suggestions on how to advocate for ATSC
---------------------------------------

4. (SBU) Aranda encouraged a strong US advocacy push, and
offered to work with the Embassy to promote this standard.
He urged that advocacy should be accompanied by concrete
deliverables by U.S industry players. He confided with us on
two aspects of the Japanese package: (1) that it does not
include digitalization plans for state television, Channel 7,
which is a high priority for the GoA, and (2) that the
Japanese have already failed to come through on some promises
made in Brazil. Given these observations, Aranda suggested
that U.S. advocacy could gain a lead by paying to digitalize
the state channel as well as demonstrating a more consistent
follow-through and reliability than the Japanese business
approach. (Embassy is checking with ATSC and local industry
to see if Channel 7 digitalization is possible.) He also
encouraged lobbying from businessmen from relevant companies

who would see CFK and Planning Minister Julio De Vido in New
York at the U.N. General Assembly. (We conveyed this
information to U.S. company representatives, but they
apparently did not act upon the suggestion.)

---------------------------------
Why Clarin cares about this issue
---------------------------------

5. (SBU) According to local industry and analysts, Clarin,
like other media players, prefers the ATSC standard because
it is the cheapest, best quality, and most efficient option
for broadcasters and consumers. It is important to note that
for Clarin and other media companies, the ATSC advantage is
more evident in the case of open-air television than for
cable. Clarin's cable operations are already using the ATSC
standard, and Clarin management has told Embassy that if the
GOA chose any non-ATSC standard, Clarin could convert their
cable operations with relatively minimal expense. But for
open-air television, the ATSC standard is clearly the best
option in terms of transmission costs, greater coverage, and
future advertising revenue.

-------------------------------------
GOA leaning towards Japanese standard
-------------------------------------

6. (SBU) Since the recent Argentina-Brazil summit (ref A)
where the two sides pledged to work closer in the area of
digital television standards, the GOA has sent more possible
signals of support for the Japanese standard. On September
29, CFK paid a visit to the local Japanese company NEC, where
she received a briefing on the Japanese standard. This week,
two high-level GOA Federal Broadcast Commission officials are
in Japan to receive briefings on this technology.

--------------------------
Comment and action request
--------------------------

7. (SBU) Aranda is one of Argentina's most powerful and
insightful media figures, with contacts all over the country
and region. He came to the Embassy after discussing this
issue with the Ambassador and indicating Clarin's desire to
work with us to achieve approval of the U.S. standard. In
his well-informed view, the GOA has still not made up its
mind on a DTV standard, and the U.S. standard still has a
chance to prevail. As stated in ref B, we want to continue
fighting as long as we have clear U.S. industry interest and
support. Right now, it is unclear to what extent U.S.
industry is interested and engaged. ATSC Forum
representatives did not go to the New York business meetings
with CFK and Minister De Vido last week as we had urged.
U.S. industry does not seem to have a clear or active
advocacy strategy for this issue regionally. Embassy is
ready to continue to work vigorously on the DTV issue, but
the U.S. standard will not prevail here without clear
industry and USG support. End Comment.
WAYNE

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