Spanish €260M scheme to finance terrestrial digital platform operators found incompatible with EU State aid rules

Brussels, 20-6-2013 — /europawire.eu/ — The European Commission has concluded that a Spanish €260 million scheme to finance the digitisation and extension of the terrestrial television network in remote areas of Spain was incompatible with EU State aid rules. The measure favours the terrestrial digital technology to the detriment of others. The operators of terrestrial platforms received a selective advantage over their competitors using other technologies and therefore have to pay it back to the Spanish taxpayer.

In 2005, Spain decided to subsidise the transition to digital terrestrial television (DTT) in remote areas of Spain, covering around 2.5% of the population. The public financing also encompasses aid for the operation and maintenance of the DTT infrastructure. However, those subsidies worth €260 million went exclusively to terrestrial operators. Spain did not notify this project to the Commission.

Following a complaint from a satellite platform operator, the Commission opened in 2010 an in-depth investigation into the public financing of the DTT infrastructure (case C23/2010)C23/2010. The investigation found that indeed the measure exclusively funded the digitisation of terrestrial transmission technology. By contrast, alternative transmission platforms like satellite, cable or the internet could not effectively benefit from those subsidies although, for instance, the satellite platform would be available and suitable to cover the territory. Today, many commercial TV channels are already transmitted via the satellite platform.

In Member States that supported the digital switch-over in a technologically neutral way, other platform operators have successfully participated in open tenders. The Spanish measure, on the contrary, unduly distorts competition between DTT players and operators using other technologies. The former have received an undue advantage over their competitors and therefore need to return those unfair subsidies to the Spanish taxpayer.

Background

During the period of 2005-2008 Spain adopted a series of regulatory measures to manage the switch from analogue to digital television. In the terrestrial network, this change requires upgrading of the existing and building of new transmission centres. The Spanish territory was divided in three distinct areas. In Area I, which includes the vast majority of the Spanish population, the costs of the switch-over were borne by the broadcasters. In the less urbanised Area II broadcasters had no commercial interest in providing the service. The Spanish authorities therefore established the investigated state aid scheme. Finally, the topography of Area III excludes terrestrial transmission and the satellite platform was chosen. The investigation concerned exclusively the measures taken for Area II.

In its decision on subsidies for the digital terrestrial TV in Berlin-Brandenburg, the Commission gave indications on how Member States could support the digital switchover in compliance with EU state aid rules (see IP/05/1394). The Commission’s decision in this case has been upheld by the EU General Court (cases T-8/06, T-21/06 and T-24/06). The principle of technological neutrality has furthermore been confirmed in the General Court ruling on the Commission’s decision in the Mediaset case (case T-177/07, see CJE/10/55).

Apart from this case, the Commission has opened an in-depth investigation also for two other digitisation cases in Spain. One concerns the implementation of the transition plan in the region of Castilla – La Mancha (JOCE C/213/2012), where, in addition to a possible technological discrimination, there are allegations of discrimination against regional and local terrestrial platform operators. The second case concerns aid granted to broadcasters for the change of bandwidth (JOCE C/213/2012). Both cases are still under investigation.

The non-confidential version of the decision will be made available under the case number SA.28599 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.