WTO URGED TO REMOVE TRADE BARRIERS ON ENTERTAINMENT

Negotiators must see world “with digital glasses on” in next round of World Trade Organization (WTO) talks, AOL Time Warner International Public Policy Dir. Laura Lane said in session on AV services at Commerce Dept. conference on trade expansion objectives in service industries Feb. 5. World has changed since last round of talks 8 years ago in Uruguay as companies such as AOL Time Warner scramble to provide information, content and services to consumers via Internet, she said. To do that, many different kinds of companies now must work cooperatively in “merged” world marketplace without borders, fact that negotiators must take into account when creating trade regime: “We don’t need analog [trade] restrictions,” Lane said.

Since Uruguay round, many countries have come to realize that AV services such as filmed entertainment are exportable, said Bonnie Richardson, MPAA vp-trade & federal affairs. Moreover, she said, more countries now are interested in rules- based approach to solving their differences on issues such as dispute resolution.

What has changed is increased capacity of programmers, News Corp. Vp-Govt. Affairs Rick Lane said. With expanded capacity comes need for more content from around world, something that won’t happen without right regulatory atmosphere, he said. For AV industries to be successful, content must be safe from unauthorized releases. If something is on the Internet, “it’s gone,” Lane said. News Corp. also is concerned about lack of protection for keeping free over-air broadcasts from showing up online, Lane said. DVDs are copy-protected, as are cable and satellite transmissions, but Internet and digital TV aren’t, he said. Trade agreements are “critically important” in cutting piracy, but so is preventing countries from blocking other nations’ entertainment programs through high tariffs and taxes, which encourages content theft, Lane said.

Cable TV industry is in its infancy in Latin America, TV Assn. of Programmers (TAP) Pres. Sean Spencer said: Only 15-17% of households have cable TV, and very few have digital cable. Biggest challenges in region for TAP members are regulatory uncertainty and regulatory “aggression” against U.S. film producers in cable and TV industries, he said. For example, Mexico recently approved 10% tax on cable subscriptions, move that could adversely affect growth of industry in environment where cable still was luxury item, Spencer said. In Chile, classification rules have forced programmers to shift film lineups so any movies with rating of 18-years-and-older are shown after 10 p.m. He said that even before Argentina’s economic crisis, TAP members were facing predatory legislation aimed at limiting and setting fees on foreign advertising. And Brazil has created “diabolical plan” to create film agency that will levy fees on foreign films and TV programming, he said. Brazilian authorities consulted WTO lawyers to ensure that plan would fly, leaving TAP to try to negotiate more acceptable fee structure, Spencer said.

Advent of new technologies such as Internet means AV sector must be viewed more broadly in next round of WTO talks, Laura Lane said. She said new trade agreements should include: (1) Tariff reductions. (2) Liberalization of trade rules for services. (3) Tougher copyright protection. (4) Inclusion of financial services.