VZCZCXRO2317
RR RUEHLA
DE RUEHMD #1150/01 3090725
ZNR UUUUU ZZH
R 040725Z NOV 08
FM AMEMBASSY MADRID
TO RUEHC/SECSTATE WASHDC 5516
INFO RUEHLI/AMEMBASSY LISBON 1722
RUEHLO/AMEMBASSY LONDON 1059
RUEHFR/AMEMBASSY PARIS 1510
RUEHRO/AMEMBASSY ROME 2412
RUEHLA/AMCONSUL BARCELONA 3636
RUEHBS/USEU BRUSSELS
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 03 MADRID 001150 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB/TPP/IPE AND EUR/WE 
STATE PASS USTR D.WEINER 
STATE PASS COPYRIGHT OFFICE 
USDOC FOR 4250/DON CALVERT 
USDOC ALSO FOR PTO 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD ECPS KCRM SP
SUBJECT: SPAIN: UPDATE ON INTERNET PIRACY ISSUES 
 
REF: A. MADRID 520 
     ¶B. MADRID 477 
     ¶C. STATE 45107 
 
SUMMARY 
 
¶1.  (SBU) Since being placed on the Special 301 Watch List 
six months ago, the GOS has focused on encouraging 
negotiations between the Internet Service Provider (ISP) 
association and the Anti-Piracy Coalition of copyright 
holders and their representatives.  The parties are trying to 
agree on a formula to curb illegal and infringing activity on 
the Internet, especially peer-to-peer (P2P) downloads.  After 
several months of work, the ISPs' association, Redtel, has 
put forward a proposal for a limited graduated response 
regime.  Coalition members have shown little enthusiasm for 
Redtel's offer but have characterized it as better than no 
offer and agree that it can serve as a basis for further 
discussion. 
The government continues to urge the parties to reach 
agreement, stating that it is prepared to make the 
legislative and regulatory reforms needed to implement a 
graduated response system if and when the parties jointly 
present a framework. 
 
¶2.  (SBU) At the same time, the government believes that any 
legislative initiative will fail unless it has the full 
support of both ISPs and rights-holders, and is thus waiting 
for the parties to agree on what they can support and what 
they need the government to do.  Members of the Anti-Piracy 
Coalition disagree among themselves on some aspects of the 
ongoing negotiations but are united in their desire to see 
the government take a stronger, more proactive stance. 
Meanwhile, the Ministry of Culture is preparing to unveil a 
2-million euro anti-piracy public awareness campaign 
develnpgd in coordination with copyright-dependent 
industries, and the Ministry of Industry is hosting in late 
November an international conference on Intellectual 
Property in the Digital Environment that will include USG 
participation.  End Summary. 
 
PRIVATE SECTOR TRIES TO NEGOTIATE AN ANTI-PIRACY FRAMEWORK 
 
¶3. (SBU) Econcouns, Econoff, and FSN Stecialist met October 
28 with Ministry of Clture and Ministry of Industry, 
Tourism, and Commerce officials in a me%ting of our bilateral 
working group to discuss progress on IPR and especially the 
fight against Internet piracy.  Tie GOS/s failure to take 
effective action against this problem was a key factor in the 
USG decision to place Spain on t(e Special 301 Watch List in 
April 2008. $Since before the decision was taken, the 
government has encouraged negotationw between the 
association of InterNe4 Service Providers (Redtel, comprisingQ 
Telefonica and three other major te|ecommunications companies 
that together provide 90% of the country,s interne| cerv)ce) 
and the Anti-Piracy Coalition of rights-holders, which 
includes representatives of the music and film industries and 
copyright management entitme{.  in September, Redtel put 
forward a proposcl for a limited graduated response regime, 
in which a newly creqted governent commission would accept 
complaints about infringements on the IntEr.et and send out 
notices.  Individuls and entities failing to cease their 
infringing activities after two notices wound be subject to 
sanctions inclulingfines an blocking or removal of 
offending situs.  However, the remedy coudd0uNder no 
crcuospances include denial of Internet acCess to offenders, 
a stipulation that severel members of the Coalition find 
una#ceptable.  Other members, including the Ootion Picture 
Association (MPA), are 7illing in principle to accept this 
resvriction if the other sanctions are severe enough.  At the 
same dime, MPA has!characterized Redtel's proposal aw 
inSu&ficient and probably unworkable, arging"that the kind 
of government"mec`anism envisioned would be extremelyM 
cumbrsome and thus unable to cope with thm |arge amount of 
complaints a~d send the requisite notificatiOn3.  However.Q 
Coalit)on members decided to akcept Redtel's proposal as a 
basis for futher jegodiAtions, though most celiavm that it 
will require a great deal of work to turn0iT into a mutually 
`ccettib|e a'reement. 
 
MADRID 00001150  002 OF 003 
 
 
 
¶4.  (SBU) Both Redtel and the government also stress that any 
agreement on anti-piracy measures must include a commitment 
by rights-holders to make more of their products legally 
available on the Internet to reduce users' incentive to 
download illegally.  There is currently some music legally 
available on the Internet in Spain, but an acute shortage of 
legal American films.  The local MPA representative says his 
association is willing to negotiate a statement of general 
support for making more films available online, but that any 
commercial agreement must be negotiated between individual 
distribution companies and individual ISPs. 
 
GOVERNMENT WAITS FOR PRIVATE SECTOR RESULTS 
 
¶5.  (SBU) Salvador Soriano Maldonado, Deputy Director General 
for Information Society Services in the Ministry of Industry, 
Tourism, and Trade, has told post on several occasions that 
the Ministry has been pressing Redtel and the  Coalition to 
reach agreement.  Other ministry officials have echoed this 
point.  The government, he said on October 28, is aware that 
legislative and regulatory reforms are needed to improve the 
climate for anti-piracy enforcement, but any such measures 
are likely to be unpopular and will only succeed if they have 
the full support of the ISPs and rights-holders. 
Accordingly, the government is waiting to see what kind of 
framework agreement the parties reach, and then plans to 
introduce legislation needed to implement it.  Spain, he 
added, is also following with great interest efforts under 
way in France and the UK to institute graduated response 
regimes, and hopes to learn from their example and adapt some 
of the measures those countries adopt to Spanish conditions. 
Guillermo Corral van Damme, Director General for Policy and 
Cultural Industries at the Ministry of Culture, said the 
government is aware of the seriousness of the piracy problem 
and the need for strong action but that the private sector 
parties must first at least identify some points of 
agreement.  Based on his conversations with several of the 
players, he believes they may reach an agreement by the end 
of the year. 
 
PUBLIC AWARENESS -  A STEP IN THE RIGHT DIRECTION 
 
¶6.  (U) According to Corral and Deputy Director for 
Intellectual Property Clara Mapelli Marchena, the Ministry of 
Culture is poised to launch a comprehensive anti-piracy 
public awareness campaign.  There is general agreement that 
part of Spain's problem is an attitude prevailing among the 
public that the Internet is a free domain where anything 
goes, and that such activities as P2P downloads are a natural 
right that harm no one.  The government-funded media 
campaign, developed in coordination with copyright management 
entities and other stakeholders at a budget of 1.95 million 
euros, will be especially oriented towards families, 
students, and schools and will make available teaching 
materials.  Culture Minister Cesar Antonio Molina will launch 
the campaign on November 25 to coincide with the Ministry of 
Industry-sponsored International Conference on Intellectual 
Property in the Digital Environment, which 
will bring together government officials and private sector 
representatives from Europe and the U.S. to discuss digital 
technology and protection of IPR. Several USG IPR experts are 
expected to attend. 
 
COMMENT 
 
¶7.  (SBU) Because the GOS says the ISPs and content providers 
must agree on what measures it should take, it has not yet 
undertaken any of the legislative or regulatory actions we 
called for in the Special 301 demarche.  Ministry of Industry 
officials remain skeptical concerning the prospects of 
amending the 
Prosecutor General's (Fiscalia) 2006 Circular that stated 
that P2P downloads constitute a criminal offense only when a 
commercial profit motive can be established.  They do, 
however, acknowledge that perhaps more can be done in a 
public education context to correct the widespread public 
misimpression that the Fiscalia said P2P downloads were legal 
and permissible.  Likewise, any attempt to amend the Law on 
 
MADRID 00001150  003 OF 003 
 
 
Information Society Services (LSSI)'s standard - requiring 
ISPs to have "actual knowledge" that material on their sites 
is illegal for them to be held liable - is on hold pending 
the outcome of the negotiations.  It may be included in the 
package the government develops to implement the 
private-sector agreement, assuming the ISPs agree.  The same 
is the case with the recommendation to make it legal for ISPs 
to identify clients and internet protocol addresses in the 
context of civil suits brought by rights-holders.  Thus, 
content providers continue to find both the criminal and 
civil routes blocked or at least severely limited when they 
seek judicial relief against piracy. 
 
¶8.  (SBU) It is unclear when Redtel and the Coalition will 
reach an agreement.  The government seems to be more 
optimistic than we think may be warranted based on our 
conversations with Coalition members.  We have consistently 
told our government interlocutors at various levels that we 
will need to see concrete measures and results soon to 
consider removing Spain from the Watch List.  We were 
encouraged to hear that during President Zapatero,s New York 
visit in September, he met with U.S. private sector leaders 
and was asked about combating piracy.  (Note: Post had 
encouraged AmCham to invite MPAA to the meeting.  End Note.) 
He was reportedly concerned enough that he instructed the 
Minister of Industry, Tourism, and Trade to find a solution 
to the problem by year's end.  The November 12-13 visit to 
Spain of MPAA Chairman and CEO Dan Glickman may also serve to 
encourage the GOS.  End Comment. 
AGUIRRE