America's Nickelodeon Plays Hardball to Grab German Cable Viewers

Monday should be the day when the television world will find out whether the "Rug Rats" will be allowed under foot, and whether Clarissa will be able to "explain it all" in the ancient city of Bremen.

Nickelodeon International, one wing of the popular commercial children's cable television channel, has been seeking a place on cable TV in Bremen. But the Bremen Medienanstalt, the local authority regulating television and radio, has not yet granted it a license.

Nick has filed suit in the Bremen administrative court. Its concern is that Bremen is unfairly holding open one of its limited cable slots for a state-funded children's cable channel. The two state networks, ARD and ZDF, are planning to launch one Jan. 1 - if the contract is signed by then, and if the approvals by all 16 state governments come through.

The overarching issue here is how market forces and government regulatory regimes come to terms with each other in the rapidly evolving media world. The specific questions are:

*How open German media are to outside programming - and to the foreign investment such programming represents.

*What the appropriate role is for state-financed television during an austerity period.

*How effective Germany's decentralized media regulatory regime is in making programming decisions in the public interest.

The crux of Nick's argument in its lawsuit is that the Medienanstalt has violated a state law that forbids it from assigning a license to a cable service that does not yet exist, says Bruce Tuchman, vice-president and general business manager of Nickelodeon International.

Wolfgang Schneider, director of the Medienanstalt, says, "Our position is the same as Nickelodeon's: We can't give a license to a program that doesn't exist, and we haven't done that." He says the authority's 24-member board will meet Monday to decide on Nick's application for a slot. "There was no reason for them to go to the law court. It was an error on the side of Nickelodeon."

Nickelodeon, however, has received a letter from the Medienanstalt saying that the vacant channel Nick has its eye on "can be used for ... music ... until the ARD/ZDF children's channel starts." Mr. Tuchman and his colleagues take this to mean that a decision has been reached - hence the lawsuit. "Don't even think we're going to let them do this without hearing from us."

Tuchman is concerned about ripple effects elsewhere in Germany: If Bremen shuts Nick out, other states already carrying the service may do so too. Radio and television regulation is the constitutional responsibility of the 16 states: This provision is to prevent a dangerous concentration of media power like that which prevailed during the Hitler era.

The German-language Nickelodeon, with dubbed programs introduced by live German hosts, was launched last July and is available, by cable or by satellite, in 13 states. On cable, it appears early in the day in the slot occupied from 5 p.m. on by the Arte cultural channel. This is where Nick would like to be in Bremen.

But its availability throughout Germany, by far the Continent's biggest cable market, is somewhat precarious. Nick's agreements with different states generally run only through the end of this year. After that, Nick, owned by the media giant Viacom, must seek new license renewals or negotiate satellite transmission. The situation becomes even more challenging for Nick if the ARD/ZDF children's channel is granted "must carry" status.

Fritz Flissar, director of the Liberty Institute think tank in Bonn, charges that the launch of the children's channel is basically a fund-raising ruse by ARD and ZDF.

Dr. Flissar says the channel is being used as the justification for a planned increase in the license fees on radios and television sets, which is expected to yield 100 million deutsche marks ($65 million) a year. But the service simply won't cost that much to produce, he says.

He also worries about the effect that shutting Nick out of Bremen would have on potential foreign investors. "That's the type of signal that Germany can't afford to send."