BATTLING CORRUPTION AND IPR VIOLATIONS: KOSOVO

C O N F I D E N T I A L SECTION 01 OF 02 PRISTINA 000517 SIPDIS DEPT FOR EUR, EUR/SCE, DRL, INL, AND S/WCI, NSC FOR HELGERSON, USUN FOR SGEE, USOSCE FOR AHYDE, USDOC FOR 4232/ITA/MAC/EUR/OEERIS/SSAVICH E.O. 12958: DECL: 09/25/2018 TAGS: PREL ETRD ECON EAID EAIR ETTC PTER KTFN UNMIK KV, YI SUBJECT: BATTLING CORRUPTION AND IPR VIOLATIONS: KOSOVO INDEPENDENT MEDIA COMMISSION PROACTIVE AGAINST UNLICENSED CABLE TV CONTENT Classified By: AMBASSADOR TINA S. KAIDANOW FOR REASONS 1.4 (B) AND (D) ¶1. (C) SUMMARY: In the endemic battle to prevent corruption in Kosovo, one notable effort stands out. Kosovo,s Independent Media Commission (IMC) recently took an unusually pro-active initiative to stop cable providers from broadcasting unlicensed television content. The IMC has struggled to implement existing legislation and establish standard operating procedures, largely due to lack of resources and political will. As a case in point, the IMC only just issued full licenses to half of Kosovo's cable providers this past August. Shortly afterwards, the IMC discovered that none of the newly licensed companies was abiding by the licensing terms, and the IMC threatened punitive action. A compromise was eventually reached, allowing the cable operators to remain "live" and avoid hefty fines, but only if they suspended broadcasting unlicensed material. By the end of August, all companies had ceased broadcasting unlicensed content, which had included popular American movies, documentary and nature channels. In a move to evenly apply cable licensing standards across the whole of Kosovo, the IMC has also made overtures to eight Kosovo Serb cable providers operating in northern Kosovo to obtain proper IMC licensing. Initial meetings with the northern Kosovo providers have been positive, and the IMC is encouraged that soon all cable television in Kosovo will be properly licensed. Both initiatives represent a rare victory for the protection of intellectual property rights in Kosovo. END SUMMARY. ¶2. (SBU) On August 29, Kosovo cable customers turned on their televisions to discover many of their favorite channels -- including those which ran popular American movies and documentaries -- were no longer being broadcast due to improperly licensed content. Behind this rare, pro-active initiative to protect intellectual property rights was the Independent Media Commission (IMC),Kosovo's independent broadcast regulator. The IMC has struggled to fully implement broadcast and licensing legislation, draft standard licensing procedures, and recruit and retain staff. Despite these obstacles, the agency has worked steadily to constitute itself as a full regulatory authority. In August 2008, the IMC was finally able to fully license cable operators in Kosovo. Previously, cable companies were basically free to show whatever programming could be acquired, without facing local consequences; only their business ethics guided decisions on whether or not to show unlicensed material. As the IMC licensing terms were being drafted, the eight companies eventually licensed were given the opportunity to provide comments. According to Argjentina Grazhdani, the IMC Council Chairperson, all comments received were uniformly positive and the companies were subsequently licensed. ¶3. (SBU) Shortly after issuing full licenses, the IMC began monitoring the cable operators for compliance with the licensing terms. Two companies, Kutejsa and Ipko, by far the market leaders in cable services, have U.S. capital investment from Bedminster Capital and the Albright Group, respectively. All eight newly licensed companies were broadcasting unlicensed programming, ranging from entire television channels to one-time sporting events. Grazhdani told EconOff that monitoring cable operators for compliance was in the IMC,s workplan, in response to increasing complaints from Kosovo,s three national television stations - all showing properly licensed programming - which were losing viewers to the illegal content of the private cable operators, particularly for sporting events and movies. The IMC did not take action previously because the agency had not yet established permanent licensing procedures. Each company received a letter from the IMC, notifying it of the violations and ordering them to cease broadcasting unlicensed material, or risk being fined. The first letter was ignored. A second notification letter was issued, and also ignored. PRISTINA 00000517 002 OF 002 Noting that none of the cable operators had voluntarily chosen to stop broadcasting unlicensed material, the IMC monitoring department brought the violations to the attention of the IMC Council, with the recommendation to impose fines on the cable operators. Only the Council has the authority to review violations cases and impose fines. After reviewing the case files, the recommendation of the monitoring department was accepted, and the Council decided to impose fines of up to 50,000 euro per illegally broadcasted channel. ¶4. (SBU) Grazhdani told EconOff she was able to quietly approach all the cable operators in advance to apprise them of the Council's decision. However, she also made a proposal: if all cable operators agreed to stop broadcasting illegal material at the same time, the IMC Council would suspend the decision to impose fines for three months while the companies' negotiated proper broadcast licensing agreements. Grazhdani stated that agreement from all companies was critical, in order to prevent customers form jumping from one service to another. Kutejsa was the first company to obey the IMC's order and cease broadcasting unlicensed content; Ipko followed 12 hours later, as did the remaining companies. All cable providers agreed to secure proper copyright agreements prior to applying for new channel licensing from the IMC. A press release notified the public of these actions. ¶5. (C) The goal of the IMC is not to damage the industry, Grazhdani emphasized, but to actively encourage all broadcasters, regardless of media format, to respect intellectual property rights. This effort to license all cable operators in Kosovo has led the IMC to approach the remaining eight Kosovo Serb cable providers servicing northern Kosovo. An informal meeting between the IMC and four Kosovo Serb operators was extremely positive, says Grazhdani. The companies are interested in being licensed, in order to protect their own businesses, but are uncertain about how to proceed without drawing undue attention to their actions. Grazhdani assured the group that the IMC would travel to northern Kosovo to complete all the necessary paperwork, and the four companies said they would meet with the remaining four operators to discuss a way to move forward. While this would be a major accomplishment for the IMC, there is precedent; according to Grazhdani, 30 percent of licensed frequencies in Kosovo are Serb minority media. ¶6. (SBU) COMMENT: Such positive initiatives are refreshing to witness. In the meantime, all cable operators are working hard to secure broadcasting rights for the content they previously offered -- in particular, the DigitAlb series of channels from neighboring Albania, which shows popular American movies and television programming. Ideally, says Grazhdani, the industry will become self-regulating, with each cable company reporting on the other,s illegal content. KAIDANOW