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Cablegate: Spain: Update On Internet Piracy Issues

VZCZCXRO2317
RR RUEHLA
DE RUEHMD #1150/01 3090725
ZNR UUUUU ZZH
R 040725Z NOV 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 5516
INFO RUEHLI/AMEMBASSY LISBON 1722
RUEHLO/AMEMBASSY LONDON 1059
RUEHFR/AMEMBASSY PARIS 1510
RUEHRO/AMEMBASSY ROME 2412
RUEHLA/AMCONSUL BARCELONA 3636
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 MADRID 001150

SENSITIVE
SIPDIS

STATE FOR EEB/TPP/IPE AND EUR/WE
STATE PASS USTR D.WEINER
STATE PASS COPYRIGHT OFFICE
USDOC FOR 4250/DON CALVERT
USDOC ALSO FOR PTO

E.O. 12958: N/A
TAGS: KIPR ETRD ECPS KCRM SP
SUBJECT: SPAIN: UPDATE ON INTERNET PIRACY ISSUES

REF: A. MADRID 520
B. MADRID 477
C. STATE 45107

SUMMARY

1. (SBU) Since being placed on the Special 301 Watch List
six months ago, the GOS has focused on encouraging
negotiations between the Internet Service Provider (ISP)
association and the Anti-Piracy Coalition of copyright
holders and their representatives. The parties are trying to
agree on a formula to curb illegal and infringing activity on
the Internet, especially peer-to-peer (P2P) downloads. After
several months of work, the ISPs' association, Redtel, has
put forward a proposal for a limited graduated response
regime. Coalition members have shown little enthusiasm for
Redtel's offer but have characterized it as better than no
offer and agree that it can serve as a basis for further
discussion.
The government continues to urge the parties to reach
agreement, stating that it is prepared to make the
legislative and regulatory reforms needed to implement a
graduated response system if and when the parties jointly
present a framework.

2. (SBU) At the same time, the government believes that any
legislative initiative will fail unless it has the full
support of both ISPs and rights-holders, and is thus waiting
for the parties to agree on what they can support and what
they need the government to do. Members of the Anti-Piracy
Coalition disagree among themselves on some aspects of the
ongoing negotiations but are united in their desire to see
the government take a stronger, more proactive stance.
Meanwhile, the Ministry of Culture is preparing to unveil a
2-million euro anti-piracy public awareness campaign
develnpgd in coordination with copyright-dependent
industries, and the Ministry of Industry is hosting in late
November an international conference on Intellectual
Property in the Digital Environment that will include USG
participation. End Summary.

PRIVATE SECTOR TRIES TO NEGOTIATE AN ANTI-PIRACY FRAMEWORK

3. (SBU) Econcouns, Econoff, and FSN Stecialist met October
28 with Ministry of Clture and Ministry of Industry,
Tourism, and Commerce officials in a me%ting of our bilateral
working group to discuss progress on IPR and especially the
fight against Internet piracy. Tie GOS/s failure to take
effective action against this problem was a key factor in the
USG decision to place Spain on t(e Special 301 Watch List in
April 2008. $Since before the decision was taken, the
government has encouraged negotationw between the
association of InterNe4 Service Providers (Redtel, comprisingQ
Telefonica and three other major te|ecommunications companies
that together provide 90% of the country,s interne| cerv)ce)
and the Anti-Piracy Coalition of rights-holders, which
includes representatives of the music and film industries and
copyright management entitme{. in September, Redtel put
forward a proposcl for a limited graduated response regime,
in which a newly creqted governent commission would accept
complaints about infringements on the IntEr.et and send out
notices. Individuls and entities failing to cease their
infringing activities after two notices wound be subject to
sanctions inclulingfines an blocking or removal of
offending situs. However, the remedy coudd0uNder no
crcuospances include denial of Internet acCess to offenders,
a stipulation that severel members of the Coalition find
una#ceptable. Other members, including the Ootion Picture
Association (MPA), are 7illing in principle to accept this
resvriction if the other sanctions are severe enough. At the
same dime, MPA has!characterized Redtel's proposal aw
inSu&ficient and probably unworkable, arging"that the kind
of government"mec`anism envisioned would be extremelyM
cumbrsome and thus unable to cope with thm |arge amount of
complaints a~d send the requisite notificatiOn3. However.Q
Coalit)on members decided to akcept Redtel's proposal as a
basis for futher jegodiAtions, though most celiavm that it
will require a great deal of work to turn0iT into a mutually
`ccettib|e a'reement.

MADRID 00001150 002 OF 003

4. (SBU) Both Redtel and the government also stress that any
agreement on anti-piracy measures must include a commitment
by rights-holders to make more of their products legally
available on the Internet to reduce users' incentive to
download illegally. There is currently some music legally
available on the Internet in Spain, but an acute shortage of
legal American films. The local MPA representative says his
association is willing to negotiate a statement of general
support for making more films available online, but that any
commercial agreement must be negotiated between individual
distribution companies and individual ISPs.

GOVERNMENT WAITS FOR PRIVATE SECTOR RESULTS

5. (SBU) Salvador Soriano Maldonado, Deputy Director General
for Information Society Services in the Ministry of Industry,
Tourism, and Trade, has told post on several occasions that
the Ministry has been pressing Redtel and the Coalition to
reach agreement. Other ministry officials have echoed this
point. The government, he said on October 28, is aware that
legislative and regulatory reforms are needed to improve the
climate for anti-piracy enforcement, but any such measures
are likely to be unpopular and will only succeed if they have
the full support of the ISPs and rights-holders.
Accordingly, the government is waiting to see what kind of
framework agreement the parties reach, and then plans to
introduce legislation needed to implement it. Spain, he
added, is also following with great interest efforts under
way in France and the UK to institute graduated response
regimes, and hopes to learn from their example and adapt some
of the measures those countries adopt to Spanish conditions.
Guillermo Corral van Damme, Director General for Policy and
Cultural Industries at the Ministry of Culture, said the
government is aware of the seriousness of the piracy problem
and the need for strong action but that the private sector
parties must first at least identify some points of
agreement. Based on his conversations with several of the
players, he believes they may reach an agreement by the end
of the year.

PUBLIC AWARENESS - A STEP IN THE RIGHT DIRECTION

6. (U) According to Corral and Deputy Director for
Intellectual Property Clara Mapelli Marchena, the Ministry of
Culture is poised to launch a comprehensive anti-piracy
public awareness campaign. There is general agreement that
part of Spain's problem is an attitude prevailing among the
public that the Internet is a free domain where anything
goes, and that such activities as P2P downloads are a natural
right that harm no one. The government-funded media
campaign, developed in coordination with copyright management
entities and other stakeholders at a budget of 1.95 million
euros, will be especially oriented towards families,
students, and schools and will make available teaching
materials. Culture Minister Cesar Antonio Molina will launch
the campaign on November 25 to coincide with the Ministry of
Industry-sponsored International Conference on Intellectual
Property in the Digital Environment, which
will bring together government officials and private sector
representatives from Europe and the U.S. to discuss digital
technology and protection of IPR. Several USG IPR experts are
expected to attend.

COMMENT

7. (SBU) Because the GOS says the ISPs and content providers
must agree on what measures it should take, it has not yet
undertaken any of the legislative or regulatory actions we
called for in the Special 301 demarche. Ministry of Industry
officials remain skeptical concerning the prospects of
amending the
Prosecutor General's (Fiscalia) 2006 Circular that stated
that P2P downloads constitute a criminal offense only when a
commercial profit motive can be established. They do,
however, acknowledge that perhaps more can be done in a
public education context to correct the widespread public
misimpression that the Fiscalia said P2P downloads were legal
and permissible. Likewise, any attempt to amend the Law on

MADRID 00001150 003 OF 003


Information Society Services (LSSI)'s standard - requiring
ISPs to have "actual knowledge" that material on their sites
is illegal for them to be held liable - is on hold pending
the outcome of the negotiations. It may be included in the
package the government develops to implement the
private-sector agreement, assuming the ISPs agree. The same
is the case with the recommendation to make it legal for ISPs
to identify clients and internet protocol addresses in the
context of civil suits brought by rights-holders. Thus,
content providers continue to find both the criminal and
civil routes blocked or at least severely limited when they
seek judicial relief against piracy.

8. (SBU) It is unclear when Redtel and the Coalition will
reach an agreement. The government seems to be more
optimistic than we think may be warranted based on our
conversations with Coalition members. We have consistently
told our government interlocutors at various levels that we
will need to see concrete measures and results soon to
consider removing Spain from the Watch List. We were
encouraged to hear that during President Zapatero,s New York
visit in September, he met with U.S. private sector leaders
and was asked about combating piracy. (Note: Post had
encouraged AmCham to invite MPAA to the meeting. End Note.)
He was reportedly concerned enough that he instructed the
Minister of Industry, Tourism, and Trade to find a solution
to the problem by year's end. The November 12-13 visit to
Spain of MPAA Chairman and CEO Dan Glickman may also serve to
encourage the GOS. End Comment.
AGUIRRE

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