D.C.’s trust bust

With exemption, H'wood would police itself

WASHINGTON — Hollywood and its marketing practices once again consumed attention on Capitol Hill Wednesday, as key lawmakers promoted passage of an exemption to antitrust laws allowing the entertainment industry to come together and formulate a new, enforceable code of conduct.

Adopting an antitrust exemption would mean that Congress would not be taking on the First Amendment by dictating what is shown or sung. Rather it would give the movie, music and vidgame industries the room to fix alleged problems detailed in a FTC report released Sept. 11 charging that they wantonly sell violence to kids.

A limited antitrust exemption — the focus of a Senate Judiciary Committee hearing called by Sen. Orrin Hatch (R-Utah) — would let the entertainment industry work together without worry of being labeled a monopoly.

Hollywood isn’t keen on such an exemption, according to MPA topper Jack Valenti, who testified that its consideration is, at the very least, premature.

Only one building away from Hatch’s committee, the Senate Commerce Committee also was taking up Hollywood, passing controversial legislation potentially imposing a blanket prohibition on the airing of so-called “violent” programming on TV during those hours when children are most likely to be watching.

The “safe harbor” measure, sponsored by Sen. Fritz Hollings (D-S.C.) and passed in a 16-2 vote, first directs the FCC to see if the V-chip is protecting children from violence. If not, the FCC would determine what is violent under a new, blanket prohibition.

It’s highly unlikely, however, that the Hollings measure will reach the full Senate before lawmakers adjourn in early October, and if it does, its passage is given poor odds, considering that identical legislation has been routinely defeated over the years because of serious constitutional questions.

Not even Sen. John McCain (R-Ariz.), commerce committee chairman, or Sen. Sam Brownback (R-Kansas), another vocal Hollywood critic, voted in favor of Hollings’ proposal. Instead, Brownback got up from his commerce committee seat and walked the short distance to the judiciary committee, where he testified in support of an antitrust exemption. McCain said he likewise supports the antitrust exemption.

The chances of the exemption legislation being passed by the Senate this month, whether on its own or as an amendment to other legislation, is a real possibility according to Capitol Hill insiders. In fact, the Senate previously voted unanimously in favor of such a provision, but the bill it was attached to became stuck in conference.

Valenti and representatives of the music and vidgame industries were on hand to testify before the judiciary committee, but were not able to deliver their prepared remarks due to a technicality requiring an abrupt adjournment.

In his testimony, Valenti urged the judiciary committee to give Hollywood more time to digest the FTC report before rushing to action. Next week, Valenti said he and high-ranking execs from each of the seven major studios, as well as an exec from DreamWorks, will testify before the commerce committee in a command performance ordered by McCain after no studio execs showed up at a Sept. 13 hearing on the FTC report.

“While I cannot tell you at this moment precisely how we will act on the FTC’s recommendations, I can tell you that we will act,” Valenti wrote.

What Hatch and several members of the judiciary committee want is for the entertainment industry to police itself, with the aid of a new code of conduct made possible by the proposed antitrust exemption. He said he would not presume to dictate what such a code says, nor should anyone else in government, out of due deference to the First Amendment.

Other industries that have been granted antitrust exemptions include professional baseball and football.

Like Valenti, Recording Industry Assn. of America (RIAA) prexy Hilary Rosen said in her prepared testimony to the judiciary committee that Congress must tread carefully.

“Principally, I fear there may be an unstated expectation in the granting of this exemption that we develop a universal ratings system or create an ‘industry code’ to prohibit the sale or marketing or certain products,” Rosen stated.

“In such an expectation lies the greatest danger of all — that of restraining sales to and by retailers of certain products based on subjective analyses of the content of protected speech,” Rosen continued.

Rosen said the entertainment industry should be trusted to right any wrong that was rightly revealed in the FTC report. The RIAA and the vidgame industry assured McCain’s committee last week that they are strengthening existing policies prohibiting the sale of certain materials to kids.

Though not as impassioned as Rosen, FTC chairman Robert Pitofsky — who testified at Wednesday’s judiciary committee hearing — was nevertheless lukewarm about an antitrust exemption, saying the entertainment industry could most likely develop a new code of conduct without it. Where the industry would run into trouble, however, is in how such a code is enforced, Pitofsky said.

Antitrust laws could come into play if, for instance, studios boycotted or somehow punished a retailer for selling adult material to a child, Pitofsky said. In such a case, a limited antitrust exemption would be needed, he said.

At the same time, Pitofsky cautioned that Hollywood must not hide behind any exemption to justify monopolistic behavior.

Meanwhile, Hatch made clear he’s unhappy that everyone has rushed to attack all of Hollywood — in a none-to-veiled criticism of Demo presidential contender Al Gore and his running mate, Sen. Joseph Lieberman (D-Conn.), who said if elected, they would give Hollywood six months to put up or shut up.

“It is important to recognize that America’s entertainment industry can be a very positive force. For example, I have seen a number of films that convey ideas that I believe are beneficial to society. As a songwriter myself, I have experienced the first-hand ability of music to uplift and inspire,” Hatch said. “In short, it is not my intention at this hearing to heap further attacks.”

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