QUOTAS FIND BRUSSELS MUSCLE

The European Commission last week paved the way for months of acrimonious debate by proposing to tighten Europe’s controversial quota laws for the next 10 years in an attempt to protect the European television and film industries.

The Commission proposal is due to go to the European Council of Ministers on April 3, where Britain and Germany are expected to continue to oppose tougher quotas and France will continue to push for more protectionism.

If the proposals are eventually agreed upon – and few believe they will be in their current form – they would strengthen the mandate for European broadcasters to carry at least 51% European programming.

The current Television Without Frontiers directive calls for this to happen “where practicable” – a loophole that has allowed some countries to virtually ignore the requirement.

The new proposal closes the loophole by removing “where practicable” from the text. But in a compromise, Audiovisual Commissioner Marcelino Oreja, the architect of the plan, has included a commitment to scrap quotas after 10 years.

In addition, Oreja has suggested keeping some new multimedia services, such as video-on-demand, out of the grips of legislation and allowing thematic channels to choose between applying quotas or investing 25% of their programming budgets in European production.

Privately, Hollywood sources admit that tougher quotas would have little effect on the volume of U.S. program sales to European broadcasters. But start-up thematic channels, like Ted Turner’s TNT or Cartoon Network, might think twice about launching if they have to meet European programming or production investment targets within three years of opening.

Sources in Brussels insisted last week that the Commission’s proposals – part of the EU’s attempt to revise the 1989 Television Without Frontiers Directive – are not definitive, privately adding that just about everything could change during the next months..

“What was proposed by the Commission is one thing. What is eventually agreed upon may be completely different,” said one Brussels insider. The general opinion of those canvassed by Variety is that it will take all year before a proposition has a chance of European Union approval.

Even before last week’s announcement had sunk in, Germany’s constitutional court threw a monkey wrench into the proceedings by ruling that the German government had acted unconstitutionally in agreeing to the Television Without Frontiers directive in the first place.

Germany’s complicated broadcasting setup puts media regulation in the hands of German states. The constitutional court ruled that by agreeing to the 1989 directive, the federal government “infringed on the rights of the states” to run television. A nine-state coalition, headed by Bavaria, is strongly opposed to quotas and will now push Bonn to renew its opposition to them.

Bonn gleefully seized on the ruling, putting out a statement saying it intended to use the judgment as “an opportunity to continue its resistance on a European level against quotas.”

Although Brussels’ attempts to revise the Television Without Frontiers directive covers a vast range of media legislation, it is the quota issue which has whipped up the biggest storm.

Hollywood is radically opposed to any form of protectionism. The Motion Picture Assn. put out a statement last week saying that while it welcomed some parts of the proposal it also felt it regressed in some ways. “It (the proposal) keeps in place rigid protectionist barriers and makes them mandatory throughout the European Union,” lamented the MPA.

Contacted by Variety, U.S. ambassador to the European Union, Stuart Eizenstat, noted: “While we think that some of the revisions are positive, others reveal that the Commission has missed an historic opportunity to take a bold step toward a more open system that would benefit the European audiovisual industry.”

Similar disappointment was being voiced in London.

The quota-tightening suggestion took many European Union members by surprise. In February, a meeting of EU Culture Ministers in Bordeaux appeared to have ended in favor of relaxing quotas.

“This is unacceptable for us. We might agree to review the situation after five years, but not do away with quotas definitively within one decade,” said a veteran Paris lobbyist. Hollywood counters that in the rapidly changing media market, 10 years is an eternity.

While few people are hazarding a guess at how the Commission’s proposals will eventually turn out, the fireworks aren’t expected to begin until the fall.

The smart money is that a compromise will be reached. If it is not, Europe will continue to soldier on with the existing Television Without Frontiers directive which has the singular merit of being disliked by all EU members.

David Molner in Berlin contributed to this report.

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