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RUEHCV/AMEMBASSY CARACAS 3731

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. 
 
-------------------------------------- 
The Long Road to Reaching an Agreement 
-------------------------------------- 
 
¶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. 
 
-------------------------- 
The Terms of the Agreement 
-------------------------- 
 
¶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. 
 
--------------------- 
Reactions from HBO-LA 
--------------------- 
 
¶6. (SBU) Oliva attributed success in Trinidad to HBO-LA's 
multi-pronged approach that included enlisting Embassy advice and 
 
PORT OF SP 00001154  002 OF 002 
 
 
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