SPAIN: INTERNET PIRACY UPDATE

UNCLAS SECTION 01 OF 02 MADRID 000982

SENSITIVE
SIPDIS

STATE FOR EUR/WE, EEB/TPP/IPE, AND EEB/CIP
STATE PASS USTR FOR D.WEINER AND J.GROVES
COMMERCE FOR 4212/DON CALVERT

E.O. 12958: N/A
TAGS: KIPR ETRD ECPS KCRM SP
SUBJECT: SPAIN: INTERNET PIRACY UPDATE

REF: MADRID 417 AND PREVIOUS

MADRID 00000982 001.3 OF 002


SUMMARY


1. (SBU) Secretary of State for Telecommunications and the
Information Society Francisco Ros told Econoffs at an October
6 AmCham breakfast that "within a matter of days," the GOS
will announce a series of measures designed to tackle
Internet piracy. The President of the Coalition of Creators
and Content Industries reported separately that the Coalition
may reach a "de minimis" agreement with the association of
Internet Service Providers (Redtel) in the next week or two,
leading to a government initiative. In his formal remarks at
the breakfast, Ros briefly addressed IPR issues,
characterizing the assertion by copyright-dependent
industries that Spain has one of the highest Internet piracy
rates in the world as an "urban legend." USG officials and
U.S.-based industry representatives will have an opportunity
during Ros's October 19-22 visit to Washington to challenge
this view. End Summary.


2. (U) On October 6, State Secretary (Under Secretary
equivalent) Francisco Ros addressed an audience of about 80
at an AmCham-hosted breakfast, speaking on "The Development
of the Information Society in Boosting U.S.-Spain relations."
Following that event, he met with the AmCham's Intellectual
Property Committee, composed of representatives of the
software, film, music, and video games industries.

A DEAL IMMINENT?


3. (SBU) In a conversation with Econoffs before the event
began, State Secretary Ros, who is scheduled to visit
Washington November 19-22, said that the government will
announce a new initiative related to IPR protection and
Internet piracy "in a matter of days." Econoffs later spoke
to Aldo Olcese, President of the Coalition of Creators and
Content Providers, who confirmed that the government was
putting considerable pressure on Redtel, the ISP association,
to agree to what Olcese characterized as a "de minimis"
anti-piracy agreement. The Coalition is not enthusiastic
about the proposed agreement but intends to accept it as a
way to get the government more actively engaged in finding
and implementing solutions. Olcese estimated that the first
part of the agreement, establishing a government authority
that would take action against a number of high-profile
websites known to make pirated content available, could be
ready by the end of this week. The second part, on making
legal content available online, could, if accepted by Redtel,
be ready by October 16, he said.

REMARKS


4. (U) In his formal remarks, State Secretary Ros provided
statistics on the impressive growth in Internet penetration
in Spain and as well as the strong performance of the IT
sector in the face of the economic downturn. A major focus
of his remarks was promotion of the 3rd International Frum on
Digital Content (FICOD 2009) to be held in Madrid, November
17-19. The GOS has invited the U.S. to participate in FICOD
as the featured country ("invitado de honor") and is seeking
USG and private-sector participation.


5. (U) Towards the end of his speech, Ros turned briefly to
IPR issues, commenting that "there are no objective data
provided by any entity that shows that Spain has more
Internet piracy than its neighboring countries." He
characterized assertions by industry that Spain has one of
the highest Internet piracy rates in the world as an "urban
legend." He referred to Eurostat figures that he said show
that Spanish youth share files at about the same volume as
their peers in the UK, France, and Germany. Nevertheless, he
said, Spain takes IPR protection seriously and is among the
first countries to promote collaborative international
actions to combat the phenomenon. Ros argued that no country
can solve the piracy problem on its own and that a global
approach is needed. Spain hopes to develop such an approach
during its January-June 2010 Presidency of the European
Union. Meanwhile, he stressed that "putting into place
measures that don't work" only serves to create false
expectations that lead to disappointment and frustration.

METING WITH AMCHAM IP COMMITTEE


6. (U) In his subsequent meeting with the AmCham's
Intellectual Property committee, Ros returned to these

MADRID 00000982 002.3 OF 002


themes, averring that Spain's "bad reputation" for piracy
predates the era of illicit downloads and file-sharing, and
derives from the street piracy practice known as "top manta,"
in which infringing goods are sold at informal street
markets, and hidden under blankets when police appear.
(Note: "Top manta" is still widespread in Spain, but police
have been increasingly effective in combating it in recent
years, though there have been calls to decriminalize the
practice since it is allegedly practiced by impoverished
immigrants. End Note.) He insisted that the practices and
habits of Spanish Internet users are no different than those
of people in other, similar countries. In this context, he
insinuated that Spain's placement on the Special 301 Watch
List in 2008 and 2009 was arbitrary and unfair.


7. (U) Ros said any attempt to reduce online piracy should
have three components: repression, education, and the
exploitation of new models to make content legally available
online. He added that the Spanish government is seeking
ways, under existing authority, to pursue and take out of
commission some 100 websites that are responsible for perhaps
as much as 80 percent of infringing content. Defending the
Spanish government's IPR performance, he cited figures
showing the number of cases of Internet piracy pursued by
police and prosecutors over the past four years, even while
recognizing that many judges in Spain are not well equipped
to understand or dispose correctly of intellectual property
cases. Ros also mentioned public education campaigns Spain
has undertaking, while noting that content providers needed
to offer an alternative to illegal downloading and
file-sharing, using new forms of distribution to make quality
products available on the Internet at attractive prices.


8. (U) Ros told the rights-holders' representatives that
"very soon," Spain's Council of Ministers will receive for
its approval a proposal for regulatory reform to address
digital piracy. While not ruling out new legislation to
strengthen the government's authority, Ros lamented that
getting a law through Congress could take years and would
likely arouse bitter opposition.


9. (U) AmCham President Jaime Malet and various of those
present told State Secretary Ros that the important point was
not whether piracy in Spain was worse than in other
countries, but rather that it was clearly bad enough to merit
and require forceful government action. In order for content
providers to invest more in the Spanish market, there needs
to be an adequate legal and regulatory framework to support
quality content and make possible a decent return on
investment. The film and music industries have seen marked
declines in sales over the past several years, attributable
to the growth of Internet piracy. Ros claimed that Spain's
legal and regulatory framework was on a par with those of
France, Germany, and the UK.

COMMENT


10. (SBU) While not challenging to his face Ros's assertions
that industry has wrongly stigmatized Spain, a number of
industry representatives present were clearly incensed with
his "urban legend" remark and the argument behind it. A
representative of a local Disney affiliate told Econoff
afterwards that his company take serious issue with Ros's
claim that there are no objective data showing Spain's piracy
problem to be worse than other countries'. Aldo Olcese cited
the attitude behind Ros's assertions as illustrative of the
difficulties the Coalition has encountered in trying to get
the government to act more vigorously against Internet
piracy. During his visit to Washington, Ros will meet with
the International Intellectual Proerty Alliance (IIPA) and
the Motion Picture Association of America (MPAA),among
others. These groups will no doubt challenge his denigration
of their data and his complacent assessment of Spain's
Internet piracy situation and legal regime. USTR will also
have the opportunity to help him understand why Spain is on
the Watch List and what it must do to get off it. The news
from both Olcese and Ros that an agreement and a government
initiative are close to fruition is certainly welcome, and
such an agreement, however modest, would be an important step
in the right direction.. End Comment.
CHACON