Internet as a platform for innovation and development of new business models – WS 03 2010

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29 April 2010 | 14:30-16:15
Programme overview 2010

Session teaser

Key issues that could be discussed: Digitization of content, ebooks, user generated content, use and re-use of existing content. What are the business models for delivering content online? What regulatory environments do businesses need?

People

Key Participants

  • Martin Perez, ASIMELEC
  • Elfa Ýr Gylfadottir, Ministry of Education, Science and Culture in Iceland
  • Sergio Mejías Sánchez, Bubok S.L.
  • Miguel Perez Subias, Internet Users Association
  • Rafael Sánchez, EGEDA
  • Oleguer Sarsanedas, TV3 Catalunya
  • Juan Zafra, ASIMELEC, Digital Content Commission

Moderator

  • Martin Perez, ASIMELEC

Rapporteur

  • Lourdes Muñoz Santamaría, Member of the Spanish Parliament from the province of Barcelona, and Alberto Abella

Remote participation moderator

  • Alexandra Maria Vasile, DiploFoundation

Key messages

The sharing of (cultural) content and its digitalization is important. Enabling access to digital content on the Internet from any and all countries/territories, ‘mash-up’, digital derivative works, and agreements between content creators, telco operators and content aggregators (in order to share revenue), were highlighted as different ways forward.

Messages (extended)

Internet has brought social and economic change which also affects the digital content sector. This is a stage of transition. We should support content digitalization and specifically cultural content and cultural heritage. The challenge ahead is how to provide for an environment that allows the development of a sustainable model which allows and facilitates business models for digital content to flourish and make a return on investment. A new business model must enable creators to be remunerated.

Different options and views that came up during the debate:

  • Users/civil society support sharing. It is necessary to tackle a restructuring of the digital content industry.
  • The need for harmonized European legislation, suppressing territorial boundaries/obstacles. An example of these obstacles is the licensed rights depending on the territory which thereby obstruct the development of the sector due to the elevated costs (in terms of time, money and uncertainty) of making content available on the Internet.
  • Allow for negotiation. Stop the “old” Europe from being “old” – if we want to create opportunities for European companies it must be possible to promote projects that are worldwide.
  • There is a demand to enable access to digital content on the Internet from any and all countries/territories, thereby suppressing national IP-based access restrictions.

In contrast, there are two different perspectives on digital content, cultural content, and copyright:

  • Copyright collecting societies have shown that there is fear (in Spain) to include content on the Internet because they consider there is not enough legal security.
  • Different stakeholders demand to include content on the Internet, stating that there is not enough supply (e.g. books in non-majority languages – a few months delay will be too late for such products).

In this connection, there is a demand from all stakeholders (i.e. including users, Internet Services Providers, copyright holders) for efforts to be made by governments, regulators and institutions to increase certainty in this field. Equally, there should be a space/platform created to promote dialogue between these different stakeholders in order to reach some critical agreements.

New promising business models could:

  • explore and develop mash-up, digital derivative works (contrary to a direct translation of the offline contents to the digital world),
  • launch agreements between content creators, telco operators and content aggregators in order to share revenue.

As regards ‘network neutrality’ this is a debate brought out by the exponential increase in digital content available. Operators increase their costs to deploy networks capable to deal with increasing traffic. However, it was suggested that there is a need for a sustainable model which is able to act as an incentive for such deployment by providing a suitable return of investment. Otherwise, services to citizens and society could suffer in quality and availability.

Transcript

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This text is being provided in a rough draft format. Communication Access Realtime Translation (CART) is provided in order to facilitate communication accessibility and may not be a totally verbatim record of the proceedings.


(No English Audio.)

– anybody else’s website, you try and download a book in French? There’s hardly anything. You try and download a book in Spanish – and this is serious stuff because three of my daughters are studying French and Spanish at a high level. I want to be able to spend them books that they should read in French and Spanish. You can’t.

So in short, this issue is much, much simpler than most of you have described so far today. Please get on with it. You’ve got a few months left.

>> Thank you very much. I think that you’ve touched upon critical issues. Unfortunately, we don’t have any major distribution group at this forum, no major publishing group. We do have a company, an entrepreneur in publishing who did request the floor to address this. Well, I would say that we’re online publishers, so we are also battling away with publishing houses.

About what you were saying, digitizing is not just taking a photograph of something and putting it out as a book. It’s costly because format for an e-reader is not simply what the author wrote in Word format, let’s say. No, no. It needs to be laid out specially so that it can be read properly on these apparatuses.

It is somewhat complicated, but it’s primarily costly. Now, people will be surprised until they actually get to know it that thus far, an author could have certain rights here in Spain and other different rights in Latin America. Now, with Internet, which is everywhere, that’s very complicated because if I put a book out for sale, I may have Latin American purchasing my book, and I can say, well, wait a minute, I don’t have – I’m not a rights holder for that country. Santiana, the publisher, might have it, but I’m working with another publisher, or vice versa.

So it’s a bit more complex, and on legislation and what can be done to – to be able to help things along. A few weeks ago we saw how 16% value-added tax was charged on the books on the Internet as opposed to 4% in a book shop, and that’s Pan-European policy. So this is pretty absurd. The Americans don’t have all of this, and they set up iTunes and the Apple store and they just sell, and they’ll have an iBook store, they’ll sell, and they’ll wipe everybody else off the map before they even get there. So we really do have to get our skates on, we have to hurry up.

And in terms of the question whether things are cheaper a digital version than they are in paper, well, let’s imagine an author writing a book and then a proofer working for a week and then the translator working and then layout and all the rest. Where’s the cost of the book? Just because distribution costs are nil, there is a lot of other expense involved.

You can’t just say, okay, well, because it’s electronic, it’s ten times less expensive. Internet is putting an end to a lot of industry that have small business models, which in the short-term, a year or two years, are profitable, but in the long-term will not be, so we have to think about that as well.

>> Thank you for that detailed reply. Obviously, you know more about the internal workings of publishing than I do. But two remarks. First of all, every single industry, every single other industry that has embraced digitalization of its working methods and the Internet as its communications platform has found that this is much, much cheaper. There are enormous economies to be made. And I still think that you are thinking in terms of working backwards from the paper book to reconvert it into – back into something that could be distributed digitally.

Please look at the economics of most of the other industries, who are competing with you for people’s money, if not for your books.

Regarding the copyright issues and – if you had taken this issue to the WIPO ten years ago and said that we want a treaty which results in mutual recognition of copyright between the continents and the countries and which solves the problem of multiple rights, by now you would have it. It is so obvious, and it’s been obvious for more than a decade. It’s so obvious that the Internet requires a global resolution of the copyright issue. And if the industry just sits on its present aqui, all you will achieve is to narrow the size of your market.

>> Thank you. I would like to take up what you just said, and I want to add to the problem. I think I mentioned this a little bit just briefly this morning, but for those – all those people in the world who are not fortunate enough to have English, Spanish, or Chinese as their mother languages, they have their own languages, and obviously, they want access to content in other languages as well, depending on what language they know except for their own. And I think that when we are thinking about business models, we need to think outside countries and territories, which all the whole intellectual property model is based on.

Because for small countries – and small countries, I’m meaning not only Iceland but small countries of just a few million – they are facing the threat now that big companies or business models that are being developed elsewhere are simply not accessible in these countries. Why? Because, for example, you know, if I take Iceland for example, there is not a business model to have iTunes, iPad, iPhone in Iceland. There is absolutely nothing there. So if you want to access that information, you need to get a prepaid subscription from abroad. And this is the problem that a lot of people now everywhere in the world who are not in these big countries are facing.

So you have the globalization, you have access to everything, but still you don’t have it since the business model and intellectual property issues are from the – should I say – non-digital age.

>> Well, I would like to give you the point of view of a public corporation. We’re not a country, but we’re a region of Spain that coincides of a language size and population size of certain European countries.

However, the situation in the media industry right now is pretty catastrophic. In other words, the economic model that audiovisuals had is seeing its demise. It has been for a few years. Advertising is down between 35% and 40%, and yet, at the same time, we are transitioning as Alberto mentioned, and we are seeing a change in paradigm. In the media, this is very, very clear. We are moving from I don’t know if it’s illustrated despotism to broadcasters who take their decisions and channel their content to the public, and then there’s a Copernican type change. It’s like the martini effect.

So we, as a public corporation, in our subsidizing, in our financing, we have conditions. The Parliament of Catalunya has set them for digitization, and the request, as is the case with the BBC, rather – although there’s a big difference there – we are asked to contribute to building TDT and working for the public that has paid us, so to speak, pays our salaries. So we feel we are akin to the philosophy that most Internet users have. However, we are work with a mixed model. We also partially need to seek advertising income. Between 23% and 25% of our income has to be sought from the market. And as other media, what we’re doing is trying out business models, and what I’d like to do is offer you the latest trial we’ve developed of a business model.

I don’t know whether this is of use for you, but we are working on establishing alliances along the value change, the signal transporters and aggregators or social networks, and finally, we work with consumer electronics or PC manufacturers.

I’m going to tell you about a very recent experience we have had with Sony, which recently put out on the market hybrid screens; in other words, they receive TDT signals but also Internet signals, and there’s also video on demand, catch-up TV, and so forth.

So what did Sony want? It wanted to ask us whether or not we could place our content predetermined over the Internet on their screen. We sat down to negotiate, and what I’m telling you is absolutely true. When we sat down – and we confessed this afterwards – neither the Sony people nor the Catalunya television people – neither of us knew whether we had to pay or collect a fee. And finally, we reached an agreement. And this agreement meant that there would be advertising, microadvertising in our content, and this revenue would go for the content holders, and they would broaden out their quality content offer geared towards an audience that we, in our 25 years’ existence, have made quite loyal.

>> Miguel wanted to say something, I think, before I chip in with something.

>> MIGUEL PEREZ SUBIAS: Just quickly, we talked about legal security. On the other side, those of us want things to be free, we also want legal security. Just so that when we do share, we can do it securely, and this will be a good thing for everyone. We have to move forward in both scenarios sustainability.

It is understood that our given business model was not going anywhere. In the past, we’ve always looked to convert. We’ve always looked to make sure that we’re not defending things which are not sustainable. We’re now at the turning point looking at what we want to be for the new society and the new models. There will be sustainability, but what sustainability? Based on the old model or based on a new model?

If we approached all this like a great reconversion or change project which is going to be very hard, we would all need to chip in with something from our own side, and if we establish the necessary legal framework so that the new entrants are clear as to what the framework is and so that those who are promoting certain values, then we’d all have the guarantee of doing things securely.

So I don’t want sustainability to be confused with the idea of just driving forward models which have no sense in the future. For me, sustainability means doing things in the right way for future society, even though it means change.

>> Following this thread – and if I understood the last comment on development of new industries in small countries, I would ask myself – and I ask all of you – well, why there are not countries in the new digital context, iPod developers, Google-type developers, why are they not world reference companies in old Europe? Has it got something to do with the fact we’ve got to change our legal systems and our legislation?

But we need a new converging legislation that recognizes that we are converting our industry, that we are creating new standards for the audiovisual world, and further, other new developments, legislation, also related to telecoms, structures which are more and more convergent and which would also be linked to the protection of rights and to the – the regulators who regulate on said rights.

I throw out this idea, what would be, for example, three points that Europe needs to change on in order to establish a new type of legislation to fit in with this new digital world?

>> Thank you very much. Yes, I – maybe I’ll just start by mentioning a scenario. For example, at the moment, I’m living in Sweden, and I have had strong connections with Sweden. I was raised there. And I want to get the content that I’m used to from Sweden, but that is not possible in very many instances when I’m in Iceland.

Very much of the content, for example, that can be seen by Swedes in Sweden is only accessible with Swedish IP numbers, which means that not only me, as an Icelandic citizen, wanting to keep contact with my other country, but also if I would be a Swede – and I know that there are a lot of Swedes who have moved to Spain, and they want to be in contact with the content there. That is not possible.

So the whole kind of – this system is based on IP numbers that are from special nationalities. This is also posing a problem when I have my iPhone and I’m going somewhere and I’m crossing a border. Why can I not get my – this information, for example, if I’m from UK, why can’t I get BBC, for example, or some of the content when I’m going abroad?

Some of these issues have been solved, by most of them haven’t.

So we are moving, when there are not volcanos around, but in this instance, there is just nothing in the legislation that allows us to keep in touch and be moving. If you know what I mean. And I think these are some of the fundamental challenges that we have, both that if we want to keep in touch or we want to get access to other countries’ content, but also our own content when we are abroad.

>> I have to say I completely agree with you, but the response is that although technology has evolved at a certain rate, the legal manner we have of using the content has not developed at the same rate, so this division between countries, which is now completely anatural. Then there are two responses. Either we sort it out, or those who try will be those who have a big enough economic space to be able to allow for the companies to create sufficiently. And they will eat up the other markets.

I think Europe may suffer from this, having not developed a single digital space. Then this may mean that they will not be able to develop a strong industry, and we’re, indeed, facing certain problems related to this already. I don’t know if we’re going to be able to push forward such change to allow the transfer of rights online, the red tape and the agreement which could be an online transaction, for example. Quite often this can be done immediately. There are U.S. examples about this. If we can’t do that in Europe because we’re such a fragmented space, then we’re going to have very serious problems.

>> Responding to those questions you threw out there, Juan, I think there are three points on which we should move forward. This is basic for me, and I’ve said it in the past. We need to establish a legal framework with the judicial, legal security, which will allow us to develop the right types of business models, allowing for the rights holders or distributors to receive something so that people who don’t have any rights aren’t just sitting there consuming for free all the time.

Education is a field which is of great importance. It’s important that we take a serious debate in terms of education. We have to establish a sustainable model. We have to ensure that users can have access to content. And we also have to ensure that the rights holders receive appropriate compensation and reward for the content.

I think it’s going to be necessary to drive forward a process in which the content generators, when compared with the online generators, know the specifications and the business trends which can be linked in to both types of content and that the service promoters and rights holders and Internet content specialists know specifications which rights holders have to comply with.

We have to ensure that people who are disseminating things via the Internet, like films, have to be fully aware to the costs in terms of making a TV program or a film, for example, so that when we’re sitting around the table discussing things and we’re looking for a sustainable model, everyone really knows where the other players are coming from. And, thereby, we don’t stop people investing in content generation. I feel these will be the three key points for the efforts in the coming years.

>> I’m here representing the European Internet service providers, and I’m actually going to be moderating the next session with a colleague.

First point to make is I find it quite refreshing that usually I come to these sorts of meetings, and the rights holder community, whether it’s TV, music, film, blames the Internet sector for not stopping peer-to-peer traffic. And if the Internet sector would just do something, all our old models would survive.

But what I find very interesting is that the debate has much been around the frustrations which you all seem to have, which I think the comment Chris was making about the frustrations you have with some of your own systems. And in the UK, things have developed quite a lot very recently. We have a new law, the Digital Economy Bill, which is effectively a way of rights holders getting Internet service providers to send letters to their customers saying first time, naughty naughty, you mustn’t exchange content which you don’t own. A second letter and a third letter, and then there’s this big fight about whether people will get cut off from the Internet.

Now, with my Internet sector hat on, I think begrudgingly, the ISPs are being forced into this action, but it actually won’t solve the problem because there’s lots of ways for people to get around using the technology to get around these letters, hide their IP address, use proxy servers.

The solution comes – and it’s not an easy one, and it’s a different solution for each sector. But let me give you just one example for the music industry, which is the one I’m most familiar with.

To get a single piece of music, a Lady Gaga track, for example, onto the Internet to be sold, whether it’s on iTunes or one of the other new services, takes dozens of separate contracts because of the licensing issue. And I’m sure it’s the same with books, and I’m sure it’s the same with films. There has to be a licensing contract with the publishers and with the owners and with the authors and with the performers. And this is so complicated and so expensive, not only for the ISPs, but also for the rights holders themselves, that there’s no money to be made.

In fact, while we always have these examples of millions of tracks being downloaded on iTunes, actually, no one’s making any money. The lawyers are doing quite well out of it, but the consumers are suffering. They’re not getting their content. There’s lots and lots of music that is not digitized. Same we’ve heard around the books.

So fundamentally, it is extremely difficult. But what we have in terms of the rights holders, the content communities, is, unfortunately, fundamental change to licensing, not necessarily to fundamental copyright law because I think that, sort of broadly speaking, works at the highest level, but it’s the licensing that’s the problem.

The next part of the solution is doing deals. It’s the rights holders – I’ve been talking about this for at least a decade. It’s the rights holders being able to work with the Internet service providers to do a deal. So whereas you had old distribution methods which are printing and distributing of CDs and DVDs and cassettes, the distribution is very clear. It’s called the Internet. It’s IP, it works, and it’s fast and it’s cheap. But the problem comes in getting those deals. And I know it’s painful because in the UK, we’ve been waiting for Virgin to do a deal with a couple of the record – with, actually, all the record companies, and it’s taken about four years, and we still haven’t had a launch date. And this is the same across the whole of Europe.

We do need it to be globalized. We’re going to be hearing from a chap of Yahoo!. I know Yahoo! had to pull out of music because the license they were forced to sign to put a bit of music to be streamed on their service cost them so much money, the more people that signed up to stream their music, the more it cost them. So they pulled out. And that’s licensing.

So we have some serious problems, but I believe they can be fixed. It just needs a big step into the dark and into the unknown and a little bit of the hope that you’re not going to do any worse, you’re not going to lose any more money by taking that big step into the digital world. And looking at some statistics, we have this statistic in the UK that the online music sales are going up slightly. But actually, there’s a huge potential out there. It just needs a very, very big, brave step into the dark.

>> Juan asked us about specific measures or what we should do, what we could do, and I would well, we have an experience, that’s GSM, and I would say let’s repeat the GSM philosophy, particularly in the publishing sector. We always think that we’re in second place or we’ve lost the battle against the U.S., but that’s not always true.

And secondly, we have intellectual property registers that can be public and open and that would give us a lot of peace of mind because the business models would take these registries as the basis, the groundwork of their legal security, and then we can set our sights on a European dominion.

I personally think that we’ll build on the pro-com, in other words, what’s all of ours. I think the future is going to have to be building on that common ground as opposed to individual property. So we need, in Europe – because this can make us strong. We have a lot of content that can be commonly shared that will make us strong.

Yes, I think that we had some questions that we received over the Internet.

>> Questions from the Armenian hub. The first one is concerning copyright, which is in some cases protecting copyright means ensuring that the state has a monopoly over content and Internet access. And what tools are in place it in order to ensure that there isn’t a monopoly but, nevertheless, there is copyright protection?

And the second one is concerning business models, and the Internet facilitates a new business model that can be called wide area telecommuting, which means that an individual lives in a country but works for a company that is registered in another country. And so that poses a lot of financial and legal problems. And how can the participants of this conference – do they have any experiences in that regard, and how can they ensure that there’s active debate on this issue?

>> I don’t know whether Rafael on the first question would like to field that, and the second one, there’s alleged supposed statement on management of intellectual property rights that we have in Europe.

Well, if we talk about intellectual property rights, we could be here for six hours more. What are we talking about if we talk about rights vis-a-vis authorization or other types of rights?

I think from the management entity standpoint, at least where I work, well, we have a plan for digitizing producer content, and we have agreements with Telefonica through Peacebox, and that’s being distributed. So the monopoly situation that we were referring to has to be determined not in terms of function but based on management entities, and this is all very complex to debate. It would take us a long, long time.

The management entities, in terms of managing rights, are a natural monopoly. There’s nothing bad about that intrinsically. What the system designates is that in order for users, television broadcasters, let’s say, in order for them to have legal protection when they broadcast, they need to contact television entities so they can contact the full universe of intellectual property holders.

This is absolutely necessary in order to be effective in our management. We’re talking about intellectual property rights, but we could be talking about authorization rights or rights to some sort of royalties. We’re not a monopoly in all of these areas. There are certain areas where the producers manage things themselves. In our case, because they couldn’t have a common product; in other words, if somebody just produces two works in his life or her life, they can’t produce a whole portal, well, we have an umbrella for them. And the management entity of the producers, what we did was decide to include all of the different works and have a catalog of works that would be significant enough so that users would want to consult it because they would find a whole ensemble, a whole lot of works.

However, in each one of these issues – on each one of these issues, we have to be very meticulous.

>> I think that question does pose a particular situation in Albania. None of us work or live in an environment where the state has a monopoly over the licensing of copyright. I don’t think anybody wants that. What we are talking about is how to move from a territorial concept of copyright and licensing to a higher level of European or international mutual recognition of copyright and licensing.

Finally – and this is the last thing I will say today – finally, if we look at the question that our workshop is addressing, the answer, of course, is very simple. There are millions of webpages, websites. There are thousands that are new business models that break even financially on the Internet. There are some of them which are making a great deal of money.

So the question is not really why or how there should be new business models. The question is why in the Spanish language publishing industry we do not yet have viable Internet-based business models. Let’s focus on the question that this room could actually answer.

>> Rafael, will you answer that question?

>> RAFAEL SANCHEZ: Well, it’s an easy question to answer. In Spain, 99% of the content distribution on the Internet is illegal, and the rights holders do not get their rights, their copyrights. So if you have a work, you have equity or however it is there, and you are afraid to make it available because you don’t want to lose control over your work, and that’s very different from what is occurring in the UK or in the U.S.

And the other day I was talking to somebody in the United States, and they said, well, what about peer to peer here? I said no, no, no. I would never download anything illegally because I wouldn’t want the police on my back. That doesn’t happen in Spain. That doesn’t mean that that’s what the Spanish model should turn into, but what’s very clear is that in the U.S., most of the market is legal, and here most of the market is illegal. And if we don’t want to use the words “legal” and “illegal,” okay, we can use other language. But here in Spain, if you have work and you put that work out on the Internet, you don’t see proper remuneration because of the use that’s made of that work. But in the UK or in other markets, either it’s a mind-set that users have or whether English speaking, common law has other values. That’s just not the way it is.

So the one who is entitled to operate receives compensation, and I don’t want to monopolize the microphone or the debate here either. I’ll just say that when you mentioned the price before, we sell over the Internet – we sell films at one euro 39 cents. In our companies, we have about a thousand such films at that price. One euro and 39 cents, and Telefonica takes 50% of that. So the handicap isn’t the low price, but it’s the fact that a click away, that user can not pay one euro 39 cents, they can pay nothing. That’s not criminalizing users. The users will do that. But in terms of education, we need to generate awareness in society that we need to seek a system so that you don’t pay directly, maybe through advertising, but somebody has to pay the cost.

Otherwise the system is unsustainable, and that is what happens in Spain in 95% of the cases. Nobody foot the bill.

>> I wouldn’t want us to wrap us this debate without putting out one last question, which is very broad, almost as broad as the ones brought out in these late questions that were read to us, and that is the debate over whether or not neutrality in Internet can affect the development of the content industry and everything hinging around it. This is an enormously pertinent question that has a lot to do with what we’ve been talking about thus far. It has a lot to do with our host here today because not too many weeks ago, its chairman opened this debate, and I’d like the panel members to let us know what your stance is in terms of neutrality on the Internet and whether it does and to what extent it is a conditioning factor for the content industry.

Miguel talked about audiovisuals. I think that this is highly sensitive issue, broadcast, telecommunications, all this comes into play. So I’ll just put this out on the table. We’ll see maybe – you’ll get the microphone first.

>> Well, I would almost prefer someone else to break the ice. Well, it’s not so much to break the ice, but we’re really oversimplifying things a lot, neutrality and the Internet. Well, there are a lot of types of neutrality. Neutrality can be seen through the lens of the user, the operator, or the regulator.

I’m not going to say which neutrality is good one because certain people come out ahead and others don’t depending on which you use, but that debate is not just whether or not those owners of the Internet can actually modify things, but whether or not there should be certain things that should be regulated European wide or what role users will have as consumers of the content that’s out on the Internet, how they’ll be affected by -neutrality – potential non-neutrality.

But we need to consider this not just from the operators’ perspective, but also from the regulators’ and the consumers’ perspectives.

Well, we heard before that two companies sat down together and they didn’t know whether they needed to collect or pay. And this is a bit similar, this situation.

On the debate on neutrality on the Internet, our principle is – well, our starting point is nobody is actually neutral, and because nobody can actually be neutral, the one who decides to use the service needs a certain type of guarantee of transparency so that he or she knows what type of non-neutrality that service is providing.

We could sum this up as something as simple as there being competition transparency and respect for rights. And if we understand that in order to safeguard certain rights, like property rights, one would need to invade privacy or other rights, well, long live neutrality. So if we have competition, transparency, and the respect for rights, then we would have a perfect market because people can decide whether they want the best video, go for the best video, if they want absolute neutrality or as close to perfect as possible, they’ll choose that.

And then so far as rights, I think that we’re regressing. The future looks a little bit bleak on that score.

>> I think that here, when you put out this issue of neutrality on the Internet, I think that this intentionally ties in with the law of sustainable economy, the bill that’s being debated now.

Well, of course I believe in neutrality. Nobody should have to dictate what type of content should be circulating. And nobody should be dictating content. But what is true is that we have to think that there should be some market rules on the Internet, and if somebody is swindling on the Internet, not in real life, it doesn’t mean that they shouldn’t be tracked down.

Neutrality on the Internet is necessary, but with the same rules on intellectual property as there are on industrial property. Internet does not enable me to rent Miguel Perez Subias’s house and charge for it. So we have to agree that that type of neutrality makes sense.

Now, in terms of the bill on sustainable economy, we’re not offsetting public and private rights, but in this case, we’re deciding whether we’re going to take measures against portals that have revenue, that have a business generating revenue based on work that is not owned by them and without the owner’s permission.

So I have to take measures, legislative measures, against those who are selling goods that are not theirs to sell, just as in real life, I need to intervene if somebody out in the square, in the marketplace, is selling goods that are not her own or his own.

So in order to favor intellectual property rights, we need to see whether users’ rights are going to be infringed upon. Well, no, that’s not the issue. We’re talking about taking action against people who are taping things illicitly, putting them out on the Internet, and then gaining revenue. They’re doing business with Internet addresses or they get premium because there’s greater Internet speed. We’re not talking about neutrality there. We’re talking about rules of play. Just as law takes action against cybercrime, well, why not crack down on illegal or illicit activity?

>> Yes, thank you very much. Well, we weren’t really referring expressly to the law of sustainability, which is a bill put out by the Spanish government to try to combat unemployment, where there’s express mention of combatting piracy.

Sergio asked for the floor. Sergio.

>> SERGIO: Just a point. We’re talking about not restricting platforms and restricting elements of communication. I’m just reading something I have here on a piece of paper. You have to look at things that are viable and achievable. Total net neutrality would be something in which you fit everything because the Net can be 100% neutral. Well, no, it can’t. There’s nothing completely neutral in this world. There have to be laws, and laws have to be respected, and for people to live within the law, then what we have to do is facilitate people with the ways in which they can live within the law.

It’s easily done. You just have to enable people to have access to Internet. We didn’t even have DSL until recently here. Give people ways of payment which are really secure in – to pay on Internet. Here only 10% of the people use electronic banking. If I put up a page for online banking and it’s only sent to the people who use it, what can I do?

And give quality content. That’s one of the most important factors. If you put up the same content that you have in other places online, then maybe that’s not going to be so attractive. You need to really give something which is differential and which is of quality.

iTunes is a good example. People buy there because it’s easy. You have an iPhone, which is easy to use and it’s got flat rates. Remember the WAP webpages, people didn’t use them, it was very expensive and it never became popular. So rather than this, things like iTunes and the iPhone have become popular because they’re easy to use and they’re not overly expensive. So this is something we have to focus on and not focus so much on neutrality. We have to focus on using – helping users, and it will come along on its own accord.

We can hear the noise in the background there of the coffee break. I’d say we have five minutes to sum up.

>> Just referring to your question, net neutrality, yes or no. Well, this is a question that’s topical not just here, of course, in other countries. There has been a model which has worked up till now, which has been the natural model for Internet in which contents flow freely through the Internet. And although there’s not 100% neutrality, the contents, in theory, are moving about in equal – under equal conditions.

So what’s being talked about now is if this model, which has been successful in developing the industry, in developing the digital world and having quick development of Internet because of the openness, what has to be asked is whether this model has to be closed off in terms of giving greater importance to certain content via paywalls, et cetera.

Also, looking at the questions which are on the table between the ISPs and the certain telecoms companies, et cetera. The problem we have here is that there are more and more contents. The contents providers are putting on to the telecoms networks more and more content. The companies which develop the telecoms networks have a higher cost for said rollout. So we’re really looking at the same thing. We have to find a sustainable model in which the investments which have to be undertaken so that the contents continue to flow freely, they have to receive some type of reward. The operators and the investors in the network have to receive some type of reward for their investment.

Just finish quickly with a quick summary of what’s been said here in our workshop. Reference during the debate will be provided by Lourdes Munoz, who is a deputy and member of the Spanish Parliament. Lourdes, you are going to do it from where you’re sitting? Okay. Remember, this is being webcast. Thank you to the speakers and to all of you who participated.

>> LOURDES MUNOZ SANTAMARIA: The main messages, I’ll just be as quick as possible, even though we will provide written minutes of this to the organization, and given that I haven’t had time to reflect, I’m sure I will have left one of the things out, and I won’t give all the nuances. Just quickly, then.

For a basic idea, simply which is longstanding, all the changes which Internet has brought about in the world and also in the contents companies, which means that we are now at a time in social terms but also in terms of the business model for contents, we’re now in a time of transition and change.

I think that there is a general commitment here. I wouldn’t say it’s necessarily a full consensus, but almost, almost for digitization. Yes to contents, yes to cultural assets, but also there are questions in terms of how we need to undertake everything to ensure that the creators and users all feel more secure.

There are other things in common, which are that the different voices speaking up from different points of view saying that there should be security. Contents providers, ISPs, and other places as well.

One of the key points behind this question – I would say this is also in common – I’ll mention some things which I don’t think there’s any agreement later on – how do we focus on an environment and – social and digital, in this case – which will allow for a sustainability sustainable model and will allow for a business model in terms of contents which can be profitable in order that this can generate opportunities, both for users who receive it and also for distributors and also for users and for intermediate services?

Now I’ll mention certain of challenges and visions where I believe there are more discrepancies.

Of course, we’ve all been working towards achieving consensus to ensure there is no big disagreement here. On the one hand, I can see there is commitment on sharing contents of the users. Also, there’s a need for legislation on a standardized basis throughout Europe and a clear demand for less red tape and less problems with multiple licenses which, for digital content, which may have been understandable for physical content but not for digital content because they act as red tape and act to block the business model. We may all win from a change in this case.

I can see that there was also demand here to stop old Europe being old Europe and that we generate new frameworks which allow for the development of business models for European companies in the digital world.

Also, there have been certain people saying that we should be able to have access to contents from anywhere in the world, and in this global world, there shouldn’t be restrictions of a territorial type. One of the points which have been counterposed, I believe, have been the rights holders or the IPR holders in Spain have – people have mentioned that there’s a certain fears about including their contents because they don’t believe there’s enough security. And on the other hand, there’s been a demand on the part of users in certain cases who want there to be more contents. And someone said in a couple months the party will be over, so we should really get down to work. That was what was said. Also, new possibilities have been spoken of.

I believe that there’s been a quick debate, but there hasn’t been enough space to fully go into everything. I just mention a couple of points, obviously, and point the way forward perhaps to the organizers. Maybe we needed a bit more content here about exactly what we meant by new models or new formuli.

Just a couple things. We are searching the business model based on a mixed model, not only in the digital world, but in the physical world in the same way.

There is an example of a television station which, just generalizing, could work towards agreements between creators and distributors and platforms in order to ensure that there’s a balance and a win-win situation for everyone.

I would like to finish as well saying that there’s a demand for more certainty from everywhere. And I would also add my voice and say that it’s difficult in this moment of transition for any government to give complete certainty, but in the public institutions, we do have to work towards that great aim.

In respect of net neutrality, just to say one thing because this is a personal opinion. There have been an unequal debate, people have been talking about different subjects. I’ll just mention the last contribution, which was talking about the fact that there’s more and more content in the telecoms networks, and this means that there is a higher cost for the telecoms companies to develop their own infrastructure, especially high-speed ones. So the point would be how do we develop a sustainable model so that the telecoms’ investments receive a return which would make them viable and, at the same time, we ensure that the Internet is still developed as a free space?

Thank you. I just tried to bring onboard the different points of view.

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