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The European Union once again is looking at more restrictive rules for the audiovisual industry.

A proposal under consideration would tighten foreign programming quotas in Europe and possibly ban advertising from TV channels of the future.

Critics say the EU is misguided because it's threatening to over-regulate the information superhighway before it has even been built.

Since no one knows the potential for advertising on new media, it's premature to start making rules, critics say.

A package, introduced by the EU's outgoing Audiovisual Commissioner Joao de Deus Pinheiro in November, calls for tightening programming quotas in the EU's 1989 Television Without Frontiers directive. Although the earlier proposal set the quotas for non-European programming at 50%, the qualifying phrase "wherever possible" allowed countries disagreeing with the rule to violate the spirit of the law. The new proposal recommends dropping the "wherever possible" phrase.

"The biggest problem is with the section seeking to ban advertising from teleshopping channels on the grounds that viewers will not be able to distinguish ads from the programming," said Jacques Bille, president of the European Advertising Tripartite, a lobbying group representing agencies, media and advertisers. The ad ban could easily be extended to other televised interactive services that involve viewer payment, such as pay-per-view or movie-on-demand channels, he said.

The proposal has drawn criticism from groups and businesses hoping to be big players in interactive media, including tripartite supporters such as Time Warner, Procter & Gamble Co. and Chicago-based Leo Burnett Co. Such a ban, they argue, would threaten even the creation of new media.

"Banning ads means strangling revenues. When you strangle revenues, you cut both development incentive and potential," Mr. Bille said.

"What [also] worries us is that these restrictions will mean higher operating costs for channels and thus increase the cost of advertising time. Who does that really benefit?"

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