There were fine dinners, copious amounts of smooth Hungarian wine, screenings of top Hollywood films and a trip organized for Media Committee members to HBO's European headquarters in London. The US lobbyists, explains Molnar, tied their argument to Hungary's ambition to join the Organization for Economic Cooperation and Development, the Paris-based body comprising the world's major economic powers. For new members, the admission ticket into the OECD and its capitalist markets is free trade in all products, including entertainment (though long-established members within the European Union have been granted a "cultural exemption" for film and TV).

As the draft media statute was on its way to Parliament, a top official from the Ministry of Industry and Trade made an urgent appeal to the Media Committee. Says Molnar, "He told us, 'We are on the verge of joining the OECD, but we can't join with those quotas.' All of us knew that the OECD is the room from which we could get into the European Union. We also knew that the EU would later want us to have those quotas. But first we had to get into the room called OECD. So we threw out the quotas for cable.... Those quotas were dropped like glasses at the end of a party when all the drunk people are leaving."

Quotas were not the only provisions dropped like wine glasses. By the time the media law was enacted, restrictions against cross-ownership of production and delivery systems were also removed. The company made it clear that any such restrictions could be circumvented through the use of subsidiaries, recalls Haraszti. "HBO said to us that if the committee didn't drop those restrictions, 'we could produce independent companies galore.'" Kabelkom, which was sold last year to a Dutch telecommunications firm, was given a free hand to both provide programming and hardwire the country, a level of vertical integration not permitted in either the United States or most Western European countries.

HBO's success in blocking quotas or any antimonopoly provisions in the cable portion of the media law gave rise to a new term in Hungary's informal legal lexicon: Lex HBO--the HBO law. "They [HBO] had their own version of the law written, and put it into our hands--translated into Hungarian," recalls Haraszti. Thus, the very cables that Kabelkom laid were free to be inundated with its parent company's specialty: American films.

At a few minutes past 3 o'clock on a spring afternoon, in a gray granite building in a semi-industrial zone of Budapest, the results of Lex HBO can be seen on a bank of seven video monitors playing HBO fare destined for the television sets of Eastern Europe. Here in the basement of the Hungarian headquarters of HBO on Budafoki Street, I can watch the film Promise the Moon, sent via satellite to a Czech downlink. Next to that, the nuclear thriller The Peacekeeper is destined for Romania. In Hungary, they're being sent the shoot-'em-up film Bounty Hunters. And in Poland, where a precedent-setting legal challenge is being waged against HBO's domination of cable TV in the region, viewers are being offered a zany American comedy from 1993 called Little Miss Millions--resplendent in Technicolor on monitor number four.

But there is far more going on here than the mere export of cultural product. Lex HBO is at the center of the company's troubles in Poland, a country with four times the number of potential television viewers as Hungary. Unlike the other countries that are part of HBO's Eastern European footprint, HBO Polska's signal is downlinked not by a Polish transmitter but by one in Hungary, just inside the Hungary-Poland border--a method known in the television business as "delocated broadcasting." In translation, that means broadcasting from one country to another without the latter's permission or oversight. It's the television equivalent of establishing a factory in Mexico that does not meet US environmental standards to produce steel for the American market--a practice sure to expand in this era of high-tech communications, in which media signals can be transmitted quite literally from outer space.

Other than the two technicians overseeing the cooled, underground chamber on Budafoki Street, who do little more than monitor the automated consoles as they switch seamlessly from the end credits of one program to the beginning credits of the next, HBO Polska might as well be from outer space. Central European Uplink (CEU), a Time Warner subsidiary, is responsible for beaming digital signals from the wall of whirring videotapes to an Israeli satellite, which bounces them down to the viewers of Poland. But HBO Polska's programming is registered in London, where the company's European headquarters staff determines the menu for Poles a thousand miles away, and CEU is registered in Hungary as a telephone service, not a broadcast entity--evading even the mildest guidelines governing mass media. It is as stateless as a modern enterprise can be--suggesting the challenges ahead for governments' ability to regulate media originating from beyond their national soil.

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