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Cabinet orders royalty bill rewrite

Hotels defend exemption from fees on TVs, radios

By Victor Velek
Staff Writer, The Prague Post
August 22nd, 2007 issue

KURT VINION/THE PRAGUE POST
Petra Daliborová. Aria Hotel's marketing manager, is one opponent of the Culture Ministry's proposal.
The Culture Ministry’s efforts to repeal a controversial amendment to the copyright act hit a roadblock Aug. 13 when the Cabinet ordered the ministry’s proposal to be redone.
The proposal would have had hotel owners on the verge of losing their battle against paying royalties for the TVs and radios in their guest rooms. In violation of European Union regulations, hotels have been exempt from these fees since 2005.
The ministry must rewrite the amendment “so that we don’t handicap our hoteliers, while at the same time being in harmony with EU legislation,” Deputy Prime Minister Jiří Čunek (Christian Democrats) said after the Cabinet’s meeting.
The amendment came into effect February 2005 and soon drew the ire of the European Commission (EC), the EU’s executive branch, which said it was out of harmony with existing EU laws. The EC launched infringement proceedings against the Czech Republic in the same year, seeking to force the country to honor international authorship-protection treaties.
The Culture Ministry’s proposal would do just that, said ministry spokeswoman Marcela Žižková.
The Czech Association of Hotels and Restaurants (AHR), which lobbied heavily for the amendment, opposes the ministry’s attempts to cancel it. According to its secretary, Milan Rambousek, the danger of EC sanctions is exaggerated.
“The Culture Ministry says that we must unconditionally submit to the European Commission,” he said. “Well, it’s not that simple. For example, hoteliers in Austria and other EU countries don’t have to pay royalties on TVs and radios in guest rooms.
“Why is it that the governments of those countries aren’t afraid of EU sanctions, while the Czech authorities are?”
Copyright fight
Hotels pushed through the amendment in 2005 by appealing straight to the Chamber of Deputies, arguing that hotel rooms were private, not public, zones.
“Despite the government’s negative stance on it, the amendment was adopted on the grounds of a deputies’ initiative,” Žižková said.
Since the bill came into effect, it has caused fierce legal disputes between copyright-protection agencies and hotel owners.
Three domestic copyright organizations that collect royalties from hotels have joined forces in the fight against the hotels’ privilege.
“Since the bill’s adoption, we’ve cooperated closely to repeal it,” said Jiří Srstka, chairman of the Dilia agency. Dilia alone loses approximately 18 million Kč ($870,000) annually because of the amendment, he added.
“I kept on telling the deputies that once this bill was adopted it would cause big problems,” Srstka said. “But the hotel lobby was and still is very strong.”
In the end, the most important ruling in the dispute came from abroad. In 2006, the European Court of Justice (ECJ), the EU’s highest court, upheld a complaint by a Spanish copyright organization against the hotel chain Rafael Hoteles over similar royalties.
That ruling prompted the Culture Ministry to act against the amendment, as the resolution of the Rafael dispute freed the EC to act against the country, Žižková said.
The decision also influenced one domestic case when, at the start of the year, Prague’s regional court upheld the ECJ decision, ruling that a hotel owner had to pay royalty fees even while the amendment is in force.
“After I consulted the issue with the European court, European legislation took precedence,” Vojtěch Cepl, the judge deciding the case, told the Czech News Agency. The hotel owner has since appealed the verdict.
These defeats notwithstanding, hotel owners continue to say that royalty payments on TVs and radios are unfair.
“We agree with copyright fees paid for music and television in hotel lobbies or bars,” Rambousek said. “But not in hotel rooms. That isn’t a public space. It’s a guest’s second household.”
Owners are also enraged by the fees’ amount.
“An agency we are in a dispute with wants 47,000 Kč a month for our 84 rooms. That’s outrageous,” said a manager of a large hotel in Brno, south Moravia, who asked to remain anonymous.
Impossible compromise
Although the government’s determination to find a solution that satisfies the EU while not harming hotels sounds reasonable, AHR’s stance remains unchanged.
“I cannot imagine a compromise bill that would satisfy the EU and Czech hoteliers,” Rambousek said. “A solution based on a decrease in royalty payments is unacceptable for us. We will keep on claiming that the hotel room is not a public space.”
Copyright protection agencies are also skeptical.
“I don’t think there is a room for any compromise,” Srstka said. “The Czech Republic will either comply with EU legislation and international treaties’ provisions or satisfy the hotels. No other option is possible.”
The task of writing an impossible proposal now lies with the Culture Ministry. So far, it is unclear what shape the rewritten proposal will take.
“The fate of the modified version is unsettled,” Žižková said.

Victor Velek can be reached at vvelek@praguepost.com


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