European Commission - Press release
State aid: Commission opens in-depth investigation on Spanish compensation for digital terrestrial broadcasters to free digital dividend
Brussels, 25 April 2012 - The European Commission has opened an in-depth investigation to examine whether a Spanish plan to compensate digital terrestrial broadcasters for the extra costs of parallel broadcasting, while services are re-allocated to another frequency to free the digital dividend, is in line with EU state aid rules. The Commission will investigate in particular whether the measure is proportionate and necessary. At this stage, the Commission also has concerns that the measure may favour terrestrial broadcasters over other available technologies. The opening of an in-depth investigation gives interested parties the possibility to comment on the proposed measure and increases legal certainty for the beneficiaries of aid. It does not prejudge the outcome of the investigation. At the same time, the Commission has approved aid to enable certain households to continue receiving free-to-air channels after the reallocation of frequencies.
Commission Vice-President in charge of competition policy, Joaquín Almunia, said: "The liberation of the digital dividend creates tremendous opportunities for a better use of spectrum, but we have to make sure that those opportunities are available fairly in compliance with EU State aid rules."
In Spain, broadcasting services need to be relocated, to free band space for the provision of enhanced electronic communication services. To ensure a continuity of broadcasting services, Spain requires broadcasters to send simultaneously on both frequencies for a transitional period of 6-24 months, while citizens adapt their reception infrastructure. This triggers extra costs for the broadcasters concerned. Spain notified a plan to compensate broadcasters for these extra costs.
At this stage, the Commission has not enough information, to determine whether the measure is necessary and proportionate. Moreover, the Commission has concerns that the measure could favour terrestrial broadcasting to the detriment of other technologies, such as satellite transmission, in breach of the principle of technological neutrality, which prescribes an equal treatment of all transmission platforms, independently of the technology used. Indeed, Spain proposes to reallocate only to digital terrestrial frequencies, without considering alternative platforms, which would also be available and suitable to free the digital dividend.
Spain also notified a scheme to support multi-household buildings for investments necessary to maintain the reception of free-to-air TV channels after the reallocation of frequencies. The Commission found that support was available independently from the transmission platform or technologies used and complied with the principle of technological neutrality. The Commission has therefore approved the measure.
The broadcasting sector has undergone in the past years major changes as a result of the introduction of digital technologies. The switch from analogue to digital broadcasting led to a more efficient use of radio frequencies and resulted in a partial release of radio frequency spectrum, the so-called “digital dividend”. The 790-862 MHz band ("800 MHz band") is particularly useful for electronic communication services due to inherent abilities to travel long distances and penetrate into buildings. The Commission fully supports the use of the digital dividend for providing advanced electronic communication services, which will foster innovation and growth in Europe. However, reaping the dividend requires making the 800 MHz band available for electronic communication services simultaneously by all Member States in the shortest possible timeframe (before 2015). To this end, countries where this band is used for other services, for example for broadcasting, like in Spain, have to reallocate these services to another frequency. To ensure the continuity of access to television services, Spain required broadcasters to broadcast simultaneously on both frequencies while citizens readjust their television sets (in average for 18 months). This triggers additional costs for the broadcasters concerned.
In past cases concerning the switch from analogue to digital broadcasting, the Commission has underlined the necessity to respect the principle of technological neutrality, which means that the State intervention does not discriminate against certain technologies and / or certain competitors. This has been confirmed by the EU General Court in its rulings on Mediaset (case T-177/07) and Berlin-Brandenburg (case T-21/06, see MEMO/11/605). In its Berlin Brandenburg decision of November 2005, the Commission gave indications on how the digital switchover could be supported without breaching the state aid rules (see IP/05/1394). Similar rules should apply for the liberation of the digital dividend. The onus is however on the Member State to demonstrate that the aid is well tailored, limited to the necessary amount and does not unduly distort competition.
The non-confidential version of the decision will be made available under the case number SA.32619 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News..