The Canal Plus/Time Warner rivalry has an extra punch given the volatile nature of French-US relations when it comes to America's entertainment exports. It was the French who launched the crusade against "American cultural imperialism" fifteen years ago and pushed the European Union to impose the program quotas that are now at the center of the dispute. "This case is like the vet's horse," says Gabrielle Cseh, a media lawyer who has studied the case in detail, evoking an old Hungarian saying suggesting that there are so many important legal and political principles at stake that it is a sort of prize specimen in the stable.

As this comment implies, the dispute reveals the conflicting pressures faced by Poland and Hungary in navigating the competing US demands for a free media marketplace and the demands for a measure of cultural protectionism by the EU--which both countries hope to join. Uneasy at stepping into this political minefield, Poland's and Hungary's nascent media oversight bodies have for nearly three years been treating the case like a contagious disease.

Canal Plus first filed a complaint in 1997 with the ORTT and Poland's National Television and Radio Council (KRRiTV), which repeatedly refused to hear it on technical grounds inherent in delocated broadcasting: Since the company had neither a Polish license nor a downlink transmitter, the board had no legal basis to hear the case. Former KRRiTV commissioner Karol Jakubowicz told me that although the board was unable to act, he felt HBO's operation was an attempt "to use Poland and Hungary as a Trojan horse to lower our barriers [to US entertainment imports] before we join the EU, then to subvert them from within." The barriers he referred to are embodied in the Council of Europe's Convention on Transfrontier Television, which establishes minimum guidelines for European program content. The convention, which has been signed by both countries, took effect in 1997 over intense US objection.

The pressure is on, with lobbying intensifying from both sides. Attempting to counter HBO's considerable sway over Hungarian media law, Canal Plus invited Janos Timar and another member of the ORTT to Paris earlier this year, where they were treated to a full-court press on the case. That included meetings at the French Foreign Ministry, which was unambiguous in its support for the French company's position and expressed concern over the dispute's implications for Hungary's integration into the European Union.

In the meantime, Hungary is paying the price for what the European Union itself appears to consider HBO's outlaw television. The European Commission's Media Directorate--which will ultimately have the last say over the acceptability of Hungarian media law to the EU--appears to be jamming a door that Peter Molnar hoped would open. In a preliminary finding last year, the directorate determined that HBO Polska's transmissions to Poland "contradict the Convention [on Transfrontier Television] and, moreover, would imply that Hungary is in breach of its international obligations." The directorate also addressed the question of delocated satellite transmissions and HBO's registration in London, concluding that the deciding factor should be where "the satellite uplink is situated." One direct consequence of Hungary's failure to conform to European regulations has been a delay in its admission to the EU's Media II program, which could mean millions of dollars in subsidies to Hungarian film and TV productions.

"The central problem here is that the technology involved has outstripped the legislation," comments lawyer Gabrielle Cseh. Hungary's media law was written at a time when the idea of delocated broadcasting may indeed have been a live one inside the hallways of Time Warner, but it certainly didn't occur to anyone then debating the country's approach to governing what it hoped would be free and competitive television.

"On the political side," says ORTT official Janos Timar, "the situation is clear. But on the legal side, it is not so clear. Everybody knows that HBO produces programs. But how do we distinguish between a telephone message and a program message? The devil is in the details."

The "details" are down in the basement on Budafoki Street. As I stand with George Douglas in front of his seven television monitors and Little Miss Millions continues to evade her pursuers on screen number four, he raises his arms toward the bustle of Budapest above this vault of Americana and tells me that in spite of the Hollywood images that surround us, his product presents no threat to Poland or any other country's cultural identity. "Go outside. You have McDonald's here, you have Burger King. But look around you. It's not America." Douglas may be right; there is little chance that HBO is going to make Hungarians into Americans. But the company's first major investment in the post-Communist world has given a valuable lesson in the feints and dodges of the free market at work--there on the tube, around the clock, for all to see.

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