Carriage Fight in Amsterdam Boils Over

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Amsterdam, Netherlands -- A simmering dispute between Dutch
cable operator A2000 and channels negotiating new carriage deals reached a boiling point
when CNN International and MTV: Music Television pulled their services off the system,
rather than paying carriage fees that they considered unreasonable.

On Aug. 20, Turner Broadcasting System International Inc.
said it would not sign the carriage contract offered by A2000, which is jointly owned by
MediaOne International and United International Holdings Inc.'s United Pan-Europe
Communications NV. The move came two weeks after a similar decision by MTV.

Holland is one of the few remaining countries in Europe
where cable channels routinely must pay for carriage. An A2000 spokesman said the company
is forced to charge carriage fees because the contract terms of the 1995 sale of the
operator by the city of Amsterdam prohibit subscriber rate hikes until 2005.

The carriage contract for the year starting in September
had to be signed by Aug. 20. However, as of last Thursday, CNN International was no longer
available to about 500,000 subscribers in the Dutch capital after talks broke down.

TBS' Dutch representative, Mathijs Spits, said A2000
was seeking an annual carriage fee of 725,000 Dutch guilders ($US360,000). "We were
offered a contract for an exceptionally high amount," he said. "This was an
offer that we could not accept."

MTV also discontinued distribution on A2000 Aug. 4. MTV
Holland's general manager, Casper Keller, said there were two reasons to discontinue
carriage: a recommendation made by the A2000 programming board that MTV share its channel
with two other music channels, and the carriage fee.

"MTV Europe is a 24-hour programming concept,"
Keller said. "You can't just pick a few hours and not broadcast the rest."
Furthermore, Keller described A2000's carriage fee as "exorbitant."

While Turner was willing to pay a lesser fee for carriage
of CNNI, MTV has taken a firm stance over the past four years of not paying any carriage
fees.

However, the A2000 spokesman said, "Both channels have
signed contracts in the past for 250,000 guilders [$US122,500]" annually.

According to the A2000 spokesman, these disagreements with
channel providers are nothing new. "We have had disagreements with all broadcasters,
not just CNN and MTV," he said.

Programmers have challenged A2000's high rates before.
They have taken the cable operator to court on five occasions, but they have lost every
case.

In the current round of negotiations, all commercial
channels except CNNI and MTV have signed contracts for the coming year. However, some
channels signed under protest, hoping that Dutch telecommunications regulators will judge
the rates to be unreasonable when their jurisdiction is extended to the cable industry
toward the end of the year.

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