Commission Issues Ruling on Italian Digital TV Subsidies

BRUSSELS, January 25: The
European Commission has ruled that subsidies issued by the Italian government
for digital TV decoders in 2004 and 2005 violated European union rules and that
broadcasters who benefited have to repay the funds.

The Commission, however,
did clear subsidies granted last year, noting that those did not distort
competition among different platforms in the Italian market.

The Italian government
spent 200 million euros in 2004 and 2005 subsidizing decoders in order to
accelerate the rollout of digital TV. The investigation into the state aid was
initiated by a complaint from SKY Italia, which said that satellite decoders
were not included in the subsidies, therefore putting the DTH platform at a
disadvantage. The Commission said that the subsidies "created an undue
distortion of competition by excluding satellite technology." The 2006 aid
was cleared because it was "technology neutral and proportionate to the
objective of promoting the transition to digital TV."

Mediaset is said to be
appealing the decision. It is unclear what RAI’s course of action will be.

Competition Commissioner
Neelie Kroes noted: “These two decisions show once again that the Commission is
committed to help the transition to digital TV and to interoperability. State
support for these goals can be provided in line with the state aid rules. But
the Commission is not ready to accept state support that creates unnecessary
distortions of competition between transmission platforms.”