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Cablegate: France's Digital Copyright Protection Law And

VZCZCXRO7123
RR RUEHIK
DE RUEHFR #1560/01 3281408
ZNR UUUUU ZZH
R 241408Z NOV 09
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 7595
INFO RUCPDOC/USDOC WASHINGTON DC
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHGV/USMISSION GENEVA 3058
RHEHAAA/WHITE HOUSE WASHDC

UNCLAS SECTION 01 OF 02 PARIS 001560

SIPDIS

STATE PASS USTR

E.O. 12958: N/A
TAGS: ECON ETTC ETRD BEXP KIPR PREL FR
SUBJECT: FRANCE'S DIGITAL COPYRIGHT PROTECTION LAW AND
APPROACH TO ILLEGAL DOWNLOADS

PARIS 00001560 001.2 OF 002


1. (U) Summary: France seeks to tackle the problem of
online piracy through the "Creation and Internet Law,"
which will take effect in early 2010. The bill
introduces a new legal framework to deter and sanction
online piracy, and represents the first stage in France's
on-going effort to stop illegal downloading, which a
recent British study found to be higher in France than in
the UK, Germany, or United States. The next step will be
to promote legitimate online content and find new ways to
remunerate artists and those who support them, perhaps
via new taxes or fees on Internet advertising. President
Sarkozy has empowered Patrick Zelnick, CEO of Naive
Records and co-President of Impala, the only pan-European
association dedicated to cultural small and medium
enterprises (SMEs), to lead a mission to develop
proposals in France based on consultations with industry
and users.

Hadopi 1: Establishing a Legal Framework to
Control Online Piracy
---------------------

2. (U) The policy of "graduated response" stems from an
agreement unveiled on November 23, 2007, by President
Sarkozy and Denis Olivennes, then-CEO of FNAC, France's
largest consumer electronics and media retailer.
Olivennes' three months of consultations with Internet
Service Providers (ISPs) and content industries on means
to prevent "the hemorrhQing of cultural works on the
Internet" led to the establishment of the High Authority
for the Distribution of Works and the Protection of
Rights on the Internet (Hadopi), charged with issuing
escalating warnings to illegal downloaders and, if
warnings go unheeded, cutting off their Internet access.
The Creation and Internet Law is known as Hadopi 1, the
first step in a process to control online piracy. Hadopi
1 established a new legal framework to protect digital
copyright.

Hadopi 2: Clarifying the Powers of the
High Authority
--------------

3. (U) Left-wing parliamentarians challenged the
sanctions provisions of Hadopi 1 before the
Constitutional Court in May 2009. The court approved
the creation of the Higher Authority and the graduated
response, but denied the High Authority the power to cut
off Internet service, which the court ruled could only be
ordered by judge. Parliament then passed a new law
covering sanctions, known as Hadopi 2, to comply with the
court's ruling. Hadopi 2's sanction system stipulates
that only a judge can cut off Internet service to illegal
downloaders, and allows defendants to plead before the
court before access is terminated.

4. (U) Hadopi 1 and 2 provisions address web users,
ISPs, content providers, and government institutions.
Web users are responsible for the fraudulent use of their
subscription; ISPs send warning messages on behalf of the
Hadopi authority and implement court-ordered sanctions;
and the content industries promote common government-
approved "security devices" such as fingerprinting and
watermarking technologies. Implementation should be set
in motion in January 2010, and will be capable of warning
10,000 illegal downloaders per day.

Hadopi 3: Developing an Alternative to
Illegal Downloading: The Zelnick Mission
----------------------------------------
5. (U) Inspired by Olivennes' consensus-building
approach, French Culture Ministry Frederic Mitterrand
called for a deal between ISPs and content producers to
ensure that web users are given legal downloading
options. By January, he wants users to have diverse,
inexpensive, and easy to access options. Creators and
producers of cultural content are promised remuneration
through "resources stemming from new economic models."
Mitterand stressed these two elements in his August 11
letter to Patrick Zelnick and his two co-members of the
mission, former Culture Minister Jacques Toubon and
Guillaume Cerutti, CEO of Sotheby's France.

6. (U) How to finance and remunerate content creators
remains the key question. The Zelnick Committee is
looking at a variety of options, including government
subsidies for creative industries, and taxes on Internet

PARIS 00001560 002.2 OF 002


access, Internet advertising, or both. In his letter to
Zelnick, Mitterrand encourages him to draw some of his
proposals from two cultural events that took place during
last year's French EU Presidency: The European
Independence Arena; and the first Avignon Forum for
Culture, touted as a "cultural Davos." During the
European Independence Arena, Impala called for a Europe-
wide action plan for music SMEs through a system of tax
benefits, lower VAT, public-private loan guarantee
schemes, and greater market access. Impala is also
pushing for new European Investment Bank schemes, the
establishment of a European Creative Industries Bank, an
increase in the EU's cultural budget from its current
0.05 percent of the total EU budget to 2.6 percent, or a
yearly 1.5 billion euros, as well as new national
investment programs. According to unconfirmed French
press reports, other proposals may also include the
financial participation of ISPs through a tax on their
turnover. ISPs are already contributing to the financing
of audiovisual creation in proportion to their turnover
via the Cosip GOF support fund for the audiovisual
program industry, a result of the March 2007 law on the
television of the future.

7. (U) Some of Zelnick's interlocutors (although not
Mitterrand's letter) also tabled the idea of a flat tax
on packages offered by ISPs, the income from which would
go to French content producers to compensate them for
losses due to internet piracy (even though much of the
illegally downloaded material is likely to be American).
Zelnick's commission will make its proposals by the end
of November, 2009, and finalize their report to the
President by January, 2010.

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