VZCZCXRO7123
RR RUEHIK
DE RUEHFR #1560/01 3281408
ZNR UUUUU ZZH
R 241408Z NOV 09
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 7595
INFO RUCPDOC/USDOC WASHINGTON DC
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHGV/USMISSION GENEVA 3058
RHEHAAA/WHITE HOUSE WASHDC

UNCLAS SECTION 01 OF 02 PARIS 001560 
 
SIPDIS 
 
STATE PASS USTR 
 
E.O. 12958: N/A 
TAGS: ECON ETTC ETRD BEXP KIPR PREL FR
SUBJECT: FRANCE'S DIGITAL COPYRIGHT PROTECTION LAW AND 
APPROACH TO ILLEGAL DOWNLOADS 
 
PARIS 00001560  001.2 OF 002 
 
 
¶1.  (U) Summary: France seeks to tackle the problem of 
online piracy through the "Creation and Internet Law," 
which will take effect in early 2010.  The bill 
introduces a new legal framework to deter and sanction 
online piracy, and represents the first stage in France's 
on-going effort to stop illegal downloading, which a 
recent British study found to be higher in France than in 
the UK, Germany, or United States.  The next step will be 
to promote legitimate online content and find new ways to 
remunerate artists and those who support them, perhaps 
via new taxes or fees on Internet advertising.  President 
Sarkozy has empowered Patrick Zelnick, CEO of Naive 
Records and co-President of Impala, the only pan-European 
association dedicated to cultural small and medium 
enterprises (SMEs), to lead a mission to develop 
proposals in France based on consultations with industry 
and users. 
 
Hadopi 1: Establishing a Legal Framework to 
Control Online Piracy 
--------------------- 
 
¶2.  (U) The policy of "graduated response" stems from an 
agreement unveiled on November 23, 2007, by President 
Sarkozy and Denis Olivennes, then-CEO of FNAC, France's 
largest consumer electronics and media retailer. 
Olivennes' three months of consultations with Internet 
Service Providers (ISPs) and content industries on means 
to prevent "the hemorrhQing of cultural works on the 
Internet" led to the establishment of the High Authority 
for the Distribution of Works and the Protection of 
Rights on the Internet (Hadopi), charged with issuing 
escalating warnings to illegal downloaders and, if 
warnings go unheeded, cutting off their Internet access. 
The Creation and Internet Law is known as Hadopi 1, the 
first step in a process to control online piracy.  Hadopi 
1 established a new legal framework to protect digital 
copyright. 
 
Hadopi 2: Clarifying the Powers of the 
High Authority 
-------------- 
 
¶3.  (U) Left-wing parliamentarians challenged the 
sanctions provisions of Hadopi 1 before the 
Constitutional Court in May 2009.   The court approved 
the creation of the Higher Authority and the graduated 
response, but denied the High Authority the power to cut 
off Internet service, which the court ruled could only be 
ordered by judge.  Parliament then passed a new law 
covering sanctions, known as Hadopi 2, to comply with the 
court's ruling.  Hadopi 2's sanction system stipulates 
that only a judge can cut off Internet service to illegal 
downloaders, and allows defendants to plead before the 
court before access is terminated. 
 
¶4.  (U) Hadopi 1 and 2 provisions address web users, 
ISPs, content providers, and government institutions. 
Web users are responsible for the fraudulent use of their 
subscription; ISPs send warning messages on behalf of the 
Hadopi authority and implement court-ordered sanctions; 
and the content industries promote common government- 
approved "security devices" such as fingerprinting and 
watermarking technologies.  Implementation should be set 
in motion in January 2010, and will be capable of warning 
10,000 illegal downloaders per day. 
 
Hadopi 3: Developing an Alternative to 
Illegal Downloading: The Zelnick Mission 
---------------------------------------- 
¶5.  (U) Inspired by Olivennes' consensus-building 
approach, French Culture Ministry Frederic Mitterrand 
called for a deal between ISPs and content producers to 
ensure that web users are given legal downloading 
options.  By January, he wants users to have diverse, 
inexpensive, and easy to access options.  Creators and 
producers of cultural content are promised remuneration 
through "resources stemming from new economic models." 
Mitterand stressed these two elements in his August 11 
letter to Patrick Zelnick and his two co-members of the 
mission, former Culture Minister Jacques Toubon and 
Guillaume Cerutti, CEO of Sotheby's France. 
 
¶6.  (U) How to finance and remunerate content creators 
remains the key question.  The Zelnick Committee is 
looking at a variety of options, including government 
subsidies for creative industries, and taxes on Internet 
 
PARIS 00001560  002.2 OF 002 
 
 
access, Internet advertising, or both.  In his letter to 
Zelnick, Mitterrand encourages him to draw some of his 
proposals from two cultural events that took place during 
last year's French EU Presidency: The European 
Independence Arena; and the first Avignon Forum for 
Culture, touted as a "cultural Davos."  During the 
European Independence Arena, Impala called for a Europe- 
wide action plan for music SMEs through a system of tax 
benefits, lower VAT, public-private loan guarantee 
schemes, and greater market access.  Impala is also 
pushing for new European Investment Bank schemes, the 
establishment of a European Creative Industries Bank, an 
increase in the EU's cultural budget from its current 
0.05 percent of the total EU budget to 2.6 percent, or a 
yearly 1.5 billion euros, as well as new national 
investment programs.  According to unconfirmed French 
press reports, other proposals may also include the 
financial participation of ISPs through a tax on their 
turnover.  ISPs are already contributing to the financing 
of audiovisual creation in proportion to their turnover 
via the Cosip GOF support fund for the audiovisual 
program industry, a result of the March 2007 law on the 
television of the future. 
 
¶7.  (U) Some of Zelnick's interlocutors (although not 
Mitterrand's letter) also tabled the idea of a flat tax 
on packages offered by ISPs, the income from which would 
go to French content producers to compensate them for 
losses due to internet piracy (even though much of the 
illegally downloaded material is likely to be American). 
Zelnick's commission will make its proposals by the end 
of November, 2009, and finalize their report to the 
President by January, 2010.