VZCZCXRO5175
RR RUEHCHI RUEHDT RUEHHM
DE RUEHML #2167/01 1440303
ZNR UUUUU ZZH
R 240303Z MAY 06
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC 1118
INFO RUEHZS/ASEAN COLLECTIVE

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 
-------------------------------------------- 
 
¶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. 
 
--------------------------------------------- -------- 
GRP NEARS AGREEMENT ON JURISDICTION OVER CABLE PIRACY 
--------------------------------------------- -------- 
 
¶5.  (SBU) Commissioner Solis said that his main purpose 
 
MANILA 00002167  002 OF 003 
 
 
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. 
 
------------------------------------- 
CABLE INDUSTRY EAGER TO WORK TOGETHER 
------------------------------------- 
 
¶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 
------- 
 
¶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 
 
MANILA 00002167  003 OF 003 
 
 
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.