CABLE TV PIRACY ENDS (ALMOST) IN TRINIDAD

UNCLAS SECTION 01 OF 02 PORT OF SPAIN 001154

SIPDIS

SENSITIVE

SIPDIS

STATE FOR EB/TPP/IPE AND WHA/CAR
STATE PASS USTR FOR TANUJA GARDE, KENT SHIGETOMI

E.O. 12958: N/A
TAGS: ETRD KIPR TD XL
SUBJECT: CABLE TV PIRACY ENDS (ALMOST) IN TRINIDAD

REF: A) 04 POS 1895 B) POS 554 (C) WALLACE-WONG E-MAIL 9/20/2007

SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY


1. SUMMARY: (SBU) With the signing of a content agreement October
30, Trinidad's main cable company Flow and HBO-Latin America ended
years of controversy about cable TV piracy in Trinidad. Starting
December 1, Flow will pay for HBO-LA programming and discontinue
unlicensed premium movie broadcasts. While HBO-LA ascribes success
to their forceful outreach to U.S. officials and the local media,
the Government of Trinidad and Tobago's (GOTT) decision against
compulsory licensing and its efforts to mediate negotiations, albeit
lukewarm, arguably played a role. END SUMMARY.

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The Long Road to Reaching an Agreement
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2. (U) When Columbus Communications (operating as Flow in T&T)
acquired the Cable Company of Trinidad and Tobago (CCTT) in 2006,
they continued to illegally broadcast channels belonging to 30 (out
of a total of 68) content providers with whom they did not yet have
content contracts, including HBO-LA (ref. A). Many of the content
providers were unconcerned about the Caribbean signal piracy as they
do not rely on licensing revenue, but HBO-LA had purchased exclusive
rights to distribute in the Caribbean and actively pursued an end to
HBO signal theft in the region. Negotiations for rights to
broadcast HBO-LA programming in Trinidad started as early as 2004.
However, it was not until early 2007, with developments like the
GOTT decision against compulsory licensing, HBO-LA's offensive
against Flow in the Trinidadian media and HBO-LA's launch of
programming for the English-speaking Caribbean, that an agreement
between HBO-LA and Flow seemed a real possibility (ref B).


3. (SBU) HBO-LA and Flow were reportedly close to signing an
agreement the first week in September. Miguel Oliva, Vice President
for Public Relations and Corporate Affairs for HBO-LA, reported that
Flow unexpectedly contacted HBO-LA to finalize and publicly sign an
agreement that same week. When no signing occurred, Oliva told
Econoff that Flow was still reviewing the agreement. [NOTE: Per
ref (C) e-mail, Post understands Oliva and the Television
Association of Programmers (TAP),an industry trade group of which
HBO-LA is a member, offered Washington agencies a different
interpretation, i.e. that Flow could not afford HBO-LA. END NOTE.]
Meanwhile, Steven Bereaux, the TATT lawyer responsible for
monitoring HBO-LA's negotiations with Flow, told Econoffs in October
that negotiations were stalled on an indemnity issue relating to
Flow's liability for their past piracy of HBO programming. Bereaux
added that Flow had announced and was ready to implement new
customer pricing structures to reflect HBO-LA fees once they
finalized an agreement, suggesting that Flow was serious about
negotiations.

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The Terms of the Agreement
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4. (U) On October 30, less than one week prior to T&T national
elections, Flow and HBO-LA signed a licensing agreement allowing
Flow to legally distribute around 25 channels owned by HBO-LA
starting December 1. While customers may preview the HBO channels
free of charge in December, as of January 2008, customers will have
to pay between TT$43.99 to TT$79.99 (roughly US$7 to US$13) for
movie packages containing HBO-LA programming. The agreement is not
retroactive; according to Bereaux and Oliva, this means Flow will
not be liable for past signal piracy. Other premium movie channels,
for which Flow does not have licensing agreements, such as Showtime
and Starz, will be dropped from Flow's roster in December. Flow
will continue to show eight unlicensed cable channels pending
licensing agreements they are currently pursuing.


5. (U) According to Oliva, the agreement with Flow is similar to
contracts concluded in other Latin American and Caribbean countries,
including Curacao and Aruba. However, Oliva said Flow was very
"aggressive" in their negotiations, asking not only for more
marketing support from HBO-LA than is normally offered to Latin
American providers, but also a launch event. HBO-LA agreed to these
demands, recognizing that paying for premium movie channels is a new
concept in Trinidad which may require more marketing.

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Reactions from HBO-LA
--------------


6. (SBU) Oliva attributed success in Trinidad to HBO-LA's
multi-pronged approach that included enlisting Embassy advice and

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support, raising the issue in the local media, and meeting in
Washington with the Special 301 committee, Congressional staff and
Executive branch officials dealing with IP issues. He dismissed any
GOTT contribution, relating again his experience with one GOTT
minister who said he liked watching free movies, and added the TATT
"did nothing."


7. (SBU) COMMENT: Oliva's comments reflect his frustration with the
long process needed to reach an agreement with Trinidad's main cable
provider, and admittedly the GOTT and TATT were not the most active
advocates for ending cable piracy. However, the GOTT's decision
against compulsory licensing in 2007 likely was a factor pushing
Flow towards negotiations, as were TATT's desultory efforts to bring
Flow in compliance with the terms of Flow's concession, which
forbids intellectual property violations. It is also a sign of the
GOTT's tacit support for ending cable piracy that such an agreement,
under which voters lose access to free premium movies, could be
finalized one week before national elections. As HBO-LA starts
negotiations with Columbus Communications in Jamaica and Bahamas,
where compulsory licensing is not yet off the table, the impact of
each government's attitude on the outcome of cable licensing
negotiations should become clear.


8. (SBU) COMMENT CONTINUED: Governments and cable providers in the
English-speaking Caribbean have long used the lack of English
language programming for the Caribbean to justify their TV signal
theft. HBO-LA created English-language programming for the
Caribbean and agreed to sit at the negotiating table with the
Caribbean cable providers, which has garnered them a new customer
base and a precedent-setting agreement for the English-speaking
Caribbean. This lesson is one from which other U.S. content
providers may be able to learn and benefit. END COMMENT.

AUSTIN