GRP DISCUSSES PLANS TO CURB CABLE TV PIRACY

UNCLAS SECTION 01 OF 03 MANILA 002167

SIPDIS

SIPDIS

STATE FOR EAP/EP, EB/TPP/IPE, EB/IFD, EB/TPP/BTA/ANA
STATE PASS TO USTR FOR BWEISEL AND DKATZ
STATE PASS USAID FOR CDOWNEY
USDOC FOR 4430/ITA/MAC/SBERLINGUETTE
USDOC PASS USPTO FOR PFOWLER, KHAUDA
BANGKOK FOR DOJ CHRIS SONDERBY

E.O. 12958: N/A
TAGS: ECON ETRD KIPR BEXP RP
SUBJECT: GRP DISCUSSES PLANS TO CURB CABLE TV PIRACY

SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET
DISTRIBUTION - PROTECT ACCORDINGLY

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SUMMARY
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1. (SBU) In an Embassy roundtable discussion on cable
piracy issues, Commissioner Solis of the National
Telecommunications Commission (NTC) told private sector
participants that he expects to sign a Memorandum of
Agreement (MOA) in June with the Intellectual Property
Office (IPO) that would clarify jurisdictional issues
that have impeded effective enforcement of IP rights.
Effective implementation of the MOA would be a
significant achievement in combating piracy in the
cable and satellite broadcasting industries. Industry
representatives welcomed the news on the MOA and were
eager to explore ways to work with the GRP to improve
the IP regime. Although the relationship between the
industry and NTC has been contentious in the past, the
meeting was forward-looking and set the stage for
collaboration in the months ahead. END SUMMARY.

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EMBASSY ORGANIZES DISCUSSION ON CABLE PIRACY
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2. (U) The Embassy organized a roundtable discussion
on cable piracy on May 12 for U.S. stakeholders to
raise concerns constructively and to provide an
opportunity for GRP officials to discuss initiatives
aimed at improving the intellectual property
environment for cable and satellite television
broadcasters. Ronald Solis, Commissioner of the
National Telecommunications Commission, led the GRP
team which was composed of Deputy Commissioner Jaime
Fortes and several lawyers from both the NTC and the
Intellectual Property Office (IPO). Private sector
stakeholders were represented by the Cable and
Satellite Broadcast Association of Asia (CASBAA) and
representatives from Star TV, Time Warner, and Walt
Disney. Econ and Commercial Officers kept the focus on
enforcement issues and served as moderators.

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BACKGROUND
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3. (U) CASBAA estimated that its constituents lose
over $80 million annually to cable signal theft in the
Philippines. In its most recent Special 301
submission, CASBAA argued to keep the Philippines on
the Priority Watch List, citing the GRP's lack of
action or assistance in defending intellectual property
rights within that sector. CASBAA is actively engaged
in promoting better IPR protection in the Philippines
through targeted raids, collaboration with the GRP on
enforcement, and public education campaigns. However,
CASBAA representatives have expressed frustration in
dealing with the GRP, and specifically the NTC, on
cable piracy issues.


4. (SBU) CASBAA released a study entitled "Regulating
for Growth" in March 2006, which claimed that "the most
problematic aspect of the situation in the Philippines
is the tacit toleration of rampant intellectual
property piracy." Furthermore, "the NTC, which is the
prime regulatory body, lacks a clear mandate and
resources to enforce the laws on intellectual
property." While CASBAA contends that the study was
meant to be constructive, local press coverage put a
negative spin on CASBAA's comments and described it as
"rebuking" the NTC. Senior NTC officials, including
Commissioner Solis, were publicly offended and
embarrassed, leaving CASBAA with minimal access to GRP
officials. Subsequently, Emboffs offered to organize a
three-way discussion with Emboffs, CASBAA and GRP
officials to discuss next steps and identify actions to
which the GRP would be willing to commit.

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GRP NEARS AGREEMENT ON JURISDICTION OVER CABLE PIRACY
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5. (SBU) Commissioner Solis said that his main purpose

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in attending the Roundtable was to listen to concerned
stakeholders. He noted that his biggest challenge with
respect to cable piracy is the NTC's lack of mandate
and unclear jurisdiction. While NTC has the ability to
revoke or deny licenses to cable operators, it does not
have the expertise or authority necessary to rule on
whether there is infringement. As a result, Solis has
been working closely with the IPO for several months on
a Memorandum of Agreement (MOA) intended to clarify
these jurisdictional issues and outline procedures for
alleged cable broadcast piracy cases. Solis expects to
sign the MOA in June.


6. (SBU) Under the MOA, NTC would be responsible for
denying or revoking licenses while the IPO would handle
infringement cases. Procedurally, a complainant would
file an initial complaint of alleged infringement with
the NTC. After registering the case, the NTC would
forward it to the IPO for an infringement
determination. The IPO would review the case and issue
a recommendation to NTC advising on whether
infringement exists and recommending any necessary
sanctions to NTC. Solis assured stakeholders that NTC
would abide by whatever recommendation IPO deemed
appropriate.

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CABLE INDUSTRY EAGER TO WORK TOGETHER
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7. (SBU) CASBAA told Solis that the cable industry had
been "very heartened" to hear positive news from the
Philippines in recent weeks on cable and satellite
broadcast issues. CASBAA noted that the judiciary is
considering a major piracy case that could set the
precedent for such cases. In addition, CASBAA has been
encouraged by the fact that a local cable broadcaster,
Destiny Cable, stopped broadcasting illegal programming
after receiving a "Cease and Desist" order from the
NTC. CASBAA also said that the new MOA is very
encouraging to the industry and "fantastic news."
CASBAA emphasized that it is seeking opportunities to
dialogue with the GRP as well as new ways to work
together, both formally and informally, noting that the
a strong communications industry is at the heart of
strong economic development.


8. (SBU) Other cable broadcast representatives
expressed similar sentiment with respect to the MOA,
but voiced concern over implementation, particularly
the potentially lengthy processing requirements. NTC
and IPO estimated that a case could take one to two
years for processing. Solis added that "in the
interest of transparency and collaboration," he would
be willing to sit down with stakeholders and review the
MOA before it is signed in order to identify potential
issues. He could not offer any assurances that all
suggestions would be incorporated, but said that it
could be useful to discuss some of these issues before
the MOA is signed into force.


9. (SBU) Solis assured stakeholders that he wants to
see "pay-tv flourish in the Philippines in the same way
it is flourishing in the rest of Asia, but that (the
GRP) will have to do it within its means." CASBAA
offered assistance in publishing data and statistics to
visibly demonstrate the impact a growing pay-tv
industry could have on the economy, as reflected in
increased sales, tax revenues, and jobs. Solis said
that any assistance is welcome and suggested that
CASBAA might also want to lobby Congress on a draft
bill (already submitted in the House) that would
reorganize the NTC, expand its powers, and allocate
additional resources. In view of these developments,
CASBAA offered to provide training and technical
assistance to GRP officials.

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COMMENT
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10. (SBU) While the GRP has made progress on improving
protection of intellectual property rights over the
last year, which resulted in moving the RP from the
Special 301 Priority Watch List to the Watch List in
February 2006, it has yet to focus on improving the

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regulatory environment for cable and satellite
broadcasters. This roundtable discussion brought
stakeholders together with key policymakers in a forum
where issues could be aired and discussion could turn
to constructive ways to work together to solve
problems. In particular, the dialogue reduced
lingering tension and mistrust between the two sides,
and all parties agreed to work together in concrete
ways to improve the IP system.


11. (SBU) The MOA has been under discussion for more
than a year, including with the USG. The cable and
satellite broadcast industry was encouraged by NTC's
assurances that it would be signed in the near future
since taking concrete action against cable theft has
been severely constrained due to jurisdictional
ambiguities. The Embassy has frequently urged GRP
officials to address cable signal piracy as part of its
broader program to improve its IP regime. One of the
items included in the USG's IPR Action Plan for the
Philippines, under the Special 301 process, is an
improved regulatory environment for cable and satellite
TV broadcasters. Implementation of the MOA would be a
significant step forward.