The European Association for the Protection of Encrypted Works and Services (AEPOC) has given a cautious seal of approval to the latest European Commission (EC) review of its 1998 conditional access directive, which was intended to provide a minimum level of legal protection for pay-TV services.

But despite giving the report its approval, AEPOC believes the EC has not gone far enough in terms of its recommendations in clamping down on piracy. Punishing the users of pirated TV signals, as well as the people behind the billion dollar a year “business,” is equally important, according to Jean Grenier, president of AEPOC. While agreeing with most of the findings of the EC’s latest report, there was still room for improvement. Grenier told Interspace: “What is important for us is punishment for personal use and possession of illicit devices. This is very important for the members of AEPOC. We propose the introduction of minimum sanctions across Europe for pirates. We have not found strong analysis in the report on this.”

Smart card piracy is still a billion dollar industry in Europe, meaning satellite pay-TV operators continue to lose revenue because of people use illegal smart cards to access pay-TV content for free. In Italy, for example, there are estimated to be over a million users who access pay-TV illegally and are not paying fees to their pay-TV service provider.

It is difficult enough for pay-TV operators to build profitable businesses, so a strong legal framework to deal with pirates is essential so they can get back some of these lost revenues. The impact is across the value chain. According to the EC report: “Pirates do not pay taxes on their services, and legitimate providers pay less VAT and company taxes due to lower turnover and lesser profits.”

The EC admits that so far its directive has not done the job. According to the EC’s latest report, the implementation of the 1998 directive “is still insufficient.” Spain and Belgium have not fully implemented the directive. With pirates becoming ever more sophisticated, laws across Europe need to become much tighter and tougher to stop the pirates in their tracks. Despite this, the EC at this stage has no plans for a wholesale revision of the directive, although it does not rule this out in the future.

Organised Crime

The key is to realise that piracy is not about individual users, it is about organised crime, and must be tackled in this way. One of the keys for success is to have more harmonisation in law across borders in terms of dealing with illegal smart card makers. One of the main issues is the seeming reluctance of some European countries to use the full weight of the law against the pirates. According to the EC report, “While the directive does not oblige member states to impose criminal sanctions, all member states but two (Italy and Portugal) do impose sanctions for what they consider the main infringing activities (manufacture or sale), with imprisonment and/or fines.”

New Countries: New Problems

The situation is further complicated by a number of countries joining the European Union in the next few years. Grenier believes it is important that rules are toughened in these countries right away. It is vital that there is nowhere to hide in Europe for privates, he said. “It is essential that new entrants into the EU implement the directive. If they do not do that, the hackers will find safe havens in Europe. This is very important.”

While technology advances are helping conditional access vendors locate the pirates, the pirates are finding ways to make tracking them more difficult. Grenier said: “There are surprising characteristics in some countries. Some households can be good users in the sense they have a card for basic programmes, but at the same time, they use pirate cards for other programmes.”

But, while the threat of piracy is still very real to satellite pay-TV operators, Grenier is also optimistic that progress is being made, despite some of the problems in the legal framework. “The situation in terms of piracy has improved significantly in Italy, Spain and France, and probably in Poland. It is clear the situation is much better these days. It is necessary for our members to use the best technical terms, but at the same time it is very important to have strong legal protection,” he said. –Mark Holmes

Contact: Davide Rossi, secretary general, AEPOC, e-mail: [email protected]