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Viewing cable 08BUENOSAIRES715, ARGENTINA: EMBASSY ADVOCATES FOR U.S. INTERESTS ON NEW

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Reference ID Created Released Classification Origin
08BUENOSAIRES715 2008-05-23 21:03 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Buenos Aires
VZCZCXYZ0000
RR RUEHWEB

DE RUEHBU #0715/01 1442103
ZNR UUUUU ZZH
R 232103Z MAY 08
FM AMEMBASSY BUENOS AIRES
TO RUCPDOC/USDOC WASHDC
RUEHC/SECSTATE WASHDC 1160
UNCLAS BUENOS AIRES 000715 
 
SENSITIVE 
SIPDIS 
 
USDOC FOR 4332/ITA/MAC/OLAC/APEACHER 
USDOC FOR 3134/USFCS/OIO/WH/JLEBLANC 
INFO AMEMBASSY SANTIAGO 
AMEMBASSY MONTEVIDEO 
AMEMBASSY BRASILIA 
AMCONSUL SAO PAULO 
AMCONSUL RIO DE JANEIRO 
 
E.O. 12958: N/A 
TAGS: ECON OVIP PREL BEXP AR
SUBJECT: ARGENTINA: EMBASSY ADVOCATES FOR U.S. INTERESTS ON NEW 
BROADCASTING LAW 
 
REF: BUENOS AIRES 587 
 
(U) Sensitive but unclassified.  Not for Internet distribution. 
 
1.  Summary:  In recognition of the important U.S. commercial 
interests that could potentially be affected by the new broadcast 
bill that the GOA is drafting for submission to Congress in the near 
future, the Embassy arranged a meeting for the major U.S. 
broadcasters and content producers operating in Argentina to meet 
with the lead advisor to the broadcasting agency (COMFER) to discuss 
important issues related to their operations.  Buenos Aires has 
become the broadcasting and production regional hub for many of the 
most important Pay TV companies in the United States, including 
Turner, Fox, Discovery, MTV, Disney, and HBO.  The meeting was 
organized at the initiative of the Embassy in response to 
expressions of concern from industry contacts whose entire regional 
operations will be affected by the new law.  The meeting served to 
enhance GOA understanding of the broadcasting industry and the 
contributions it makes to the country's economy.  The GOA 
appreciated the Embassy's efforts and has continued to consult with 
the U.S. companies and the Commercial Office as the bill is drafted. 
 The draft that will be sent forward appears to take into account 
all of the issues and concerns that were tabled by the U.S. firms. 
Ambassador and Embassy plan to follow up.  End Summary. 
 
2.  Shortly after a sudden change in the head of COMFER (Argentina's 
FCC equivalent) and the Argentine Government's announcement of plans 
to draft a new Bill of Law for the broadcasting industry, CSBA 
organized a meeting for leading U.S. companies in the sector with 
Omar Szulak, the main advisor to the new head of the COMFER, 
Mariotto.  The U.S. companies were all members of TAP (Television 
Association of Programmers - Latin America, which represents the 
industry's interests throughout the region.  The U.S. companies that 
participated, included Fox Latin America, Turner Broadcasting (a 
Time Warner Company), MTV (a Viacom company), Disney, HBO and 
Discovery.  These companies have collectively invested over USD 800 
million in Argentina in the last two years and have created 
approximately 2,700 direct jobs and over 6,000 indirect jobs through 
their extensive contracting arrangements with local equipment and 
service providers.  Buenos Aires is now the regional hub for most of 
the major U.S. broadcasters and producers of Pay TV programming in 
Latin America.  Turner, Fox, Disney, Discovery and MTV have all 
located their Latin American headquarters in Buenos Aires attracted 
by the highly skilled, creative, multi-cultural and multilingual 
talent pool, as well as the large number of qualified local firms 
capable of providing equipment and services to this industry which 
is highly dependent on contractors. 
 
3. During the meeting, which lasted four hours, the companies made a 
brief presentation about their recent investments and operations in 
the country followed by a rich and intense discussion of key aspects 
of the new regulatory framework that could be critical for the 
success of their operations throughout Latin America.  The insights 
shared by the companies were very much appreciated by Mr. Szulak who 
said he learned a lot about the industry and the importance of 
Buenos Aires in Latin America.  (In 2007, over 700 audiovisual 
works, including movies, TV programs, documentaries and commercials 
were produced in Buenos Aires). 
 
 
4.  The U.S. companies had been trying to get an appointment with 
Mariotto, the new head of the COMFER, and his main advisors since he 
took office on April 4 with no success, and were grateful to the 
Embassy for having taken the initiative to set up this productive 
meeting with Mr. Szulak.  Omar Szulak has a B.A. Degree in 
Communications from the University of Lomas de Zamora in Buenos 
Aires and a Masters Degree in Marketing and Communications from 
University in Maryland.  He currently is the President of the Media 
Lab at the University of Lomas de Zamora. 
 
5.  Early drafts of the bill had the potential to be detrimental to 
U.S. company interests and were strongly protectionist of Argentine 
industry.  The issues of greatest concern were a requirement that 60 
percent of the signals available through pay TV be Argentine; and a 
requirement that all pay TV (signals transmitted by a cable operator 
through subscription) not contain any advertising.  The U.S. 
companies explained how the industry is structured and demonstrated 
why advertising is now the main source of income for pay TV today, 
because the fees paid by cable operators for broadcast rights are 
trending effectively toward zero due to the concentration of pay TV 
ownership that has resulted in recent years from 
mergers and acquisitions by the market leaders. They also pointed 
out to Mr. Szulak that there are not enough local signals in 
 
existence to comply with the proposed 60 percent transmission quota. 
 Furthermore, they explained that since their firms and many 
Argentine contractors are actually producing content for the entire 
region, many of the apparently "foreign" signals are actually 
transmitting content "made in Argentina." 
 
6.  As a result of this meeting and several smaller follow-on 
meetings at the request of the advisor to the drafting committee and 
representatives of TAP, the GOA drafters now have a much more 
complete and accurate understanding of these important aspects of 
broadcasting and Argentina's high stakes in successfully supporting 
the indsutry's regional growth and competitiveness.  The original 
draft was imprecise, full of old statist concepts, and 
protectionist.  The paragraphs of the draft that the Embassy was 
shown are the same as the drafts written five years ago during a 
previous aborted GOA attempt at promulgating a new broadcast law. 
TAP members and their lawyers will keep close tabs as the draft 
moves forward to ensure that no modifications are made that will be 
prejudicial to their industry or violate any of the provisions of 
the U.S.-Argentina Bilateral Investment Treaty. Initial feedback 
indicates that the GOA has understood and has taken the points made 
by the U.S. companies under consideration.  According to industry 
sources, a final draft will be presented to the President and to the 
Secretary for Legal and Technical Affairs Zanini in late May for 
review and submission to the Senate.   Ambassador is seeking a 
meeting with Zanini.  For those interested in history and political 
context related to the broadcast law, post recommends reftel. 
 
WAYNE