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07PORTOFSPAIN554 2007-06-06 18:06:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Port Of Spain
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1. SUMMARY: (SBU) In the latest skirmish in the long-standing
Trinidad and Tobago cable TV piracy wars, HBO-Latin America launched
a media blitz May 9 accusing Trinidad's cable provider Flow of
ongoing cable piracy and failing to negotiate in good faith to
purchase cable feeds legally. Flow responded by insisting that
active negotiations are underway and calling HBO's accusations a
bargaining ploy. Officials from the Telecommunications Authority of
Trinidad and Tobago (TATT) charged with managing the negotiations
claim that the dispute should be resolved to the satisfaction of
both parties by July 1. TATT contacts also reported that the GOTT
Cabinet has rejected the idea of compulsory licensing. However,
Ministry of Legal Affairs contacts expressed skepticism whether the
TATT can effect change in the current situation. Signs are mixed
whether cable piracy in Trinidad will end any time soon. END


The Same TV Piracy Story


2. (U) Although cable piracy has been an issue in T&T since the
1990s, U.S. company HBO-Latin America did not start negotiations
with then cable provider Cable Company of Trinidad and Tobago (CCTT)
until 2004 (ref A). HBO-LA, a joint venture among Time Warner, Sony
Columbia Pictures and Disney, holds the exclusive rights in Latin
America, the Caribbean and Brazil to show the premium channels HBO
and Cinemax and the basic channels E!, A&E, the History Channel,
Biography, Warner TV and Sony TV. Since 2004, Barbados-based
Columbus Communications, the regional media company created by AIC
Chairman Michael Lee-Chin, acquired CCTT, but negotiations between
the new cable TV entity Flow and HBO-LA about ending cable piracy
continued to stall (ref B).


Battle in the Press 2007: HBO-LA vs. Flow


3. (SBU) In the current round of negotiations, which kicked off in
December 2006 in Miami with TATT attending on the sidelines, HBO-LA
presented Flow with a proposal in February to carry HBO Caribe, a
new product for the English-speaking Caribbean. At the end of
April, Flow announced to its subscribers that premium movie channels
currently offered in the basic cable package, including HBO and
Cinemax, would soon be available only for an extra fee. Flow
spokespersons indicated in press interviews that Flow was
negotiating pricing for the premium channels but could not say when
negotiations would conclude.

4. (SBU) In response to these statements, HBO-LA Senior Director for
Legal Affairs Rainer Lorenzo and Vice President for Public Relations
Miguel Oliva traveled to Port of Spain May 9 for a press briefing,
in which they denounced Flow for broadcasting HBO and Cinemax
illegally and insisted that Flow is not negotiating in good faith
with HBO-LA. Meeting with Econoffs prior to their press briefing,
the HBO-LA reps said that while Flow had repeatedly listened to
their proposals, Flow had never yet responded. They also voiced
frustration with TATT and to a lesser extent the Ministry of Legal
Affairs. Lorenzo noted that in a 2006 meeting with Minister of
Legal Affairs Christine Kangaloo, she recommended taking the matter
to court, an option Lorenzo said he hopes to avoid. Nevertheless,
in addition to organizing the press briefing to tell their side of
the story, Lorenzo said HBO-LA also decided to hire respected
opposition Member of Parliament Gillian Lucky, who continues to
practice law, as additional legal counsel.

5. (SBU) HBO-LA's public accusations, which were widely carried in
local press, sparked public anger, infuriated Flow and dismayed
TATT. Local newspapers carried letters to the editor complaining
that Flow was charging them for a stolen service. Meanwhile, Flow
President John Reid sought to refute HBO's claims in a press
interview of his own, declaring that Flow was in active negotiations
with HBO-LA and saying "I think we will pay for that service when it
reflects the interest of our consumers." In media reports and to
Econoff, TATT officials expressed confusion as they believed
negotiations between Flow and HBO-LA were progressing smoothly and
that changes were to be in place by July 1. Acting Executive
Director Chris Seecheran explained that TATT was meeting regularly
with Flow to "regularize" all content in accordance with T&T's
Broadcast Code so that standard programming did not include explicit


What Happens Next?


6. (SBU) Steven Bereaux, the TATT lawyer responsible for monitoring
HBO-LA's negotiations with Flow, suggested to Econoff on May 22 that
HBO-LA's offensive was ill-timed, relaying "in confidence" that Flow
had been "prepared to accept the proposal," but questioning whether
this was still the case following HBO-LA's May 9 press conference.
He also offered no comment on what TATT would do if Flow and HBO-LA
did not come to an agreement. Even though a 2007 Cabinet directive
instructed TATT to manage negotiations between Flow and HBO-LA,
Bereaux told Econoff he did not believe that TATT was responsible
for protecting intellectual property and even questioned whether
protecting IP was consistent with TATT's mandate to give customers
the best possible service. On a positive note, Bereaux and
Seecheran reported that the same 2007 Cabinet directive had rejected
compulsory licensing of cable TV signals. Flow is scheduled to
present their plans, including the state of negotiations with
HBO-LA, to TATT on June 5.

7. (SBU) Mazina Kadir, head of the Intellectual Property Office in
the Ministry of Legal Affairs, told Econoff she was skeptical that
TATT had the ability or political will to prevail upon Flow to
conclude negotiations. While her colleagues recommended that HBO-LA
take the matter to court, Kadir questioned whether local courts
would rule strictly on the legal issues, without regard to political
implications, especially in this election year.

8. (SBU) COMMENT: For the first time, HBO-LA is entering the media
fray to stop Flow from pirating their signals instead of relying on
DirecTV, Flow's main rival, to press its case on the ground in
Trinidad. HBO-LA's new activism may finally elicit a response from
Flow or TATT. However, TATT has done little to manage the situation
to date and may be even less willing to risk incurring the wrath of
cable TV viewers and politically influential Flow shareholders
during this election year. Post will continue to monitor the
dispute. END COMMENT.