VZCZCXRO8351
PP RUEHNZ
DE RUEHWL #0088/01 0930331
ZNR UUUUU ZZH
P 030331Z APR 09
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC PRIORITY 5818
INFO RUEHBY/AMEMBASSY CANBERRA PRIORITY 5483
RUEHNZ/AMCONSUL AUCKLAND PRIORITY 1943
RUEHDN/AMCONSUL SYDNEY PRIORITY 0822
RUCPDOC/USDOC WASHDC PRIORITY 0294
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY

UNCLAS SECTION 01 OF 03 WELLINGTON 000088 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USPTO, U.S COPYRIGHT OFFICE, USTR JARED 
RAGLAND, COMMERCE FOR ITA/MAC/OIPR, STATE FOR EAP/ANP, 
EEB/TPP/IPE 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR NZ
SUBJECT: NEW ZEALAND TO REDRAFT SECTION 92A OF NEW 
COPYRIGHT LAW 
 
¶1. (SBU) SUMMARY:  On March 23, New Zealand's Minister of 
Commerce Simon Power announced that the GNZ would suspend 
section 92A of the new copyright law, which would have 
created new regulations for terminating internet accounts of 
repeat copyright infringers.  Negotiators for both the 
intellectual property rights (IPR) industry and the 
Telecommunications Carrier Forum (TCF - the association of 
internet service providers (ISPs)) were surprised; they had 
felt they were close to finalizing a voluntary code of 
practice which would have served as the regulatory foundation 
for enforcing this section of the law.  Minister Power 
decided that the proposed code might not be workable on a 
voluntary basis, and therefore reasserted the government's 
authority to redraft section 92A. In doing so he reaffirmed 
the GNZ's commitment to the importance of IPR protection to 
NZ's creative industries.  It now will be crucial to monitor 
the progress of GNZ redrafting to ensure it succeeds in a 
timely manner.  End Summary. 
 
Background 
---------- 
 
¶2. (SBU)  The Copyright (New Technologies) Amendment Act 2008 
was originally scheduled to go into full force on February 
28, 2009 but in the weeks leading up to the deadline, public 
interest groups raised a chorus of concerns claiming that the 
law's requirement to terminate internet subscribers who 
allegedly "pirated" digital copyrighted materials over the 
internet would infringe on due process, freedom of speech and 
the public's right to access information.  The negative 
publicity led to demonstrations staged in front of 
Parliament, organized by a group called the Creative Freedom 
Foundation. 
 
¶3. (SBU)  The publicity drew the attention of some minority 
party politicians who hoped to ride a new populist wave.  The 
United Future Party's leader Peter Dunne wanted Parliament to 
strike section 92A entirely from the new copyright bill 
through an arcane legal maneuver which would have required 
the Governor General to quash the provision.  ACT Party 
leader Rodney Hyde also joined in the chorus calling for 
repeal of the section while he castigated the previous Labour 
government for its "poor" drafting of the Bill.  Both United 
and ACT are current members of the National led coalition 
government. 
 
¶4. (SBU)  In reaction, a core panel was formed within the 
Cabinet consisting of the Commerce Minister Simon Power, 
Communications/IT Minister Steven Joyce, Broadcasting 
Minister Jonathan Coleman and Attorney General Chris 
Finlayson to develop a game plan and dampen the negative 
publicity.  Meanwhile, Dunne had been asked by Simon Power to 
consider reformulating the provision in language more 
acceptable to the ISPs instead of stripping the law entirely 
of its content. 
 
¶5. (SBU)  The response developed by the four ministers and 
announced by Simon Power as lead was to suspend section 92A 
for 30 days during which time the IP rights holders would 
hammer out a code of practice with the Telecommunication 
Carriers Forum (TCF - industry association representing NZ's 
major ISPs - Telecom, Telstra, Vodafone, Kordia and Callplus) 
which would serve as the regulatory foundation for section 
92A.  The law would then go into force at the end of March 
and after 90 days it would be reviewed as to its appropriate 
application. 
 
Original Text of Section 92A 
---------------------------- 
 
¶6. (U)  Section 92A reads as follows: 
Internet service providers (ISP) must have policy for 
terminating accounts of repeat infringers 
 
1) An ISP must adopt and reasonably implement a policy that 
provides for termination, in appropriate circumstances, of 
the account with that ISP of a repeat infringer. 
2) In subsection (1), repeat infringer means a person who 
repeatedly infringes the copyright in a work by using one (1) 
or more of the Internet services of the ISP to do a 
restricted act without the consent of the copyright owner. 
 
WELLINGTON 00000088  002 OF 003 
 
 
 
Telstra Pulls Out of Negotiations 
--------------------------------- 
 
¶7. (SBU)  Telstra, one of the major New Zealand ISPs, 
signaled during the week of March 9 that it was no longer 
willing to participate in the negotiations between the 
copyright industry and the TCF on development of the code of 
practice that would have served as the regulatory foundation 
for enforcing section 92A.  Press reported rumors that 
Telstra's decision to cease cooperation may have originated 
from the company's CEO Sol Trujillo who has been reported as 
an opponent of similar legislation in Australia.  The TCF 
tried to continue working on the draft code with the 
remaining NZ ISPs (Telecom, Vodafone, Kordia and Callplus). 
However, in accordance with the TCF's by laws, unless there 
is unanimous agreement among all members of the 
telecommunications forum then the code of practice would not 
be binding but merely voluntary.  After Telstra's opting-out, 
the remaining stakeholders were unable to come to full 
agreement on a useable code of practice.  They remained 
deadlocked on two "minor" items: how to deal with fees (costs 
imposed on rights holder for submitting termination requests) 
and the length of time before termination (time between 
notice of infraction and cancellation of internet service - 
one versus two month lead-time). 
 
GNZ Decides to Rewrite Section 92A 
---------------------------------- 
 
¶8. (SBU)  Minister Power, realizing that the proposed code of 
practice could only be voluntary and not applicable to the 
second largest ISP in NZ (Telstra) along with the end of 
March deadline rapidly approaching, suspended the 
negotiations and reasserted the government's authority to 
redraft section 92A.  In his announcement, Power stressed 
that section 92A traverses an important issue in copyright 
law reform and reaffirmed the GNZ's stance that internet 
piracy is very costly to NZ's creative industries and needs 
to be addressed. 
 
¶9. (SBU)  On March 23, Minister Power, issued a press release 
after the weekly Cabinet meeting announcing that the GNZ 
would suspend section 92A as of March 31.  (Note: all other 
provisions of the new copyright law are in force as of March 
31 except but for section 92A.  End note).  The Government's 
action came as a surprise because up to the time of the 
Minister's announcement negotiators for both the IPR industry 
and the Telecommunications Carrier Forum had said they were 
close to finalizing a "voluntary" code of practice. 
 
IPR Industry Expresses Disappointment 
------------------------------------- 
 
¶10. (SBU)  On March 26, Charge' met with Frank Rittman, Vice 
President and General Counsel for Asia Pacific Division of 
the Motion Picture Association (MPA) and Tony Eaton, Director 
of New Zealand Federation Against Copyright Theft (NZFACT) to 
ascertain the IPR industry's reaction to suspension of 
section 92A of the NZ Copyright (New Technologies) Amendment 
Act 2008 and possible next steps by government, copyright 
holders and internet service 
providers. 
 
¶11. (SBU)  Rittman and Eaton had met earlier with the IP 
division of Ministry of Economic Development (MED) charged 
with the redraft of Section 92A.  MED officials' chief 
concern was that MED did not yet have clear instructions from 
its political leadership, primarily from the Minister of 
Commerce, as to timeline and process.  Rittman felt that the 
sense of urgency among the IP lawyers in MED was relatively 
low and believed that a redraft was unlikely any time sooner 
than late December 2009.  As to the redrafting process, he 
felt that the public's input would be sought - most likely to 
diffuse the earlier criticism of lack of transparency in the 
original formulation of 92A.  Rittman said that the drafters 
would need to satisfactorily address four main points: 
 
- Resolve satisfactorily the question of indemnification 
(i.e., who bears costs of improper termination). 
- Agree to definition of what constitutes an ISP. 
 
WELLINGTON 00000088  003 OF 003 
 
 
- Ensure that process for notification and termination be 
"timely" (IP industry asking for one month between final 
warning and termination of internet service while ISPs 
seeking two month lead-time). 
- Determine who bears processing costs (there is the cost of 
processing the notifications to customers for alleged misuse 
estimated at approx NZ$100 per notification - will it be 
shared or carried by ISPs). 
 
Next Steps 
---------- 
 
¶12. (SBU)  Throughout the final stages of the law's (near) 
implementation, the Embassy continued to met with IPR 
stakeholders and GNZ officials to ascertain progress and 
encourage resolution.  To determine how a "workable" section 
92A provision can be secured, Econoff met with Rory McLeod, 
Director at Ministry of Economic Development (MED) with 
responsibility for IPR within GNZ along with Paula Wilson, 
Deputy Director for Trade Negotiations at MFAT, and was given 
assurance that the government remains committed to redrafting 
Section 92A. 
 
¶13. (SBU)  Embassy will continue to stress with GNZ officials 
the need for a shorter rather than protracted timeline for 
the redraft and will ascertain the details of a notice and 
comment period for public submissions once released by GNZ. 
During this hiatus we've proposed holding DVC(s) between NZ 
and U.S. interlocutors to possibly help with drafting and as 
a public diplomacy tool to dispel public misperceptions about 
proper role of IPR protection.  U.S. agencies have the 
benefit of 10 years worth of experience in enforcing the U.S. 
Digital Millennium Copyright Act that may serve useful to New 
Zealand officials in their effort to implement section 92A. 
KEEGAN